This paper compares two voting methods commonly used in presidential elections: simple plurality voting and plurality runoff. In a situation in which a group of voters have common interests but do not agree on which candidate to support due to private information, information aggregation...

This article studies the fractional Dickey- Fuller (FDF) test for unit roots recently introduced by Dolado, Gonzalo and Mayoral (2002). Apart from the analogy with the Dickey-Fuller test, the main motivation for their method relies on simulations since these authors do not provide any...

We develop a unidimensional spatial model of two party competition in which parties are better informed than voters about the bliss point of voters. The announced positions of the two parties serve as signals to the voters concerning the parties' private information. Surprisingly, in all...

This paper introduces an approach to the study of optimal government policy in economies characterized by a coordination problem and multiple equilibria. Such models are often criticized as not being useful for policy analysis because they fail to assign a unique prediction to each possible...

We study the evolution of the distribution of assets in a deterministic version of the Neoclassical Growth Model with log-utility, a minimum consumption requirement, and Cobb-Douglas technology. Agents are heterogeneous in their initial endowment of assets only. The dynamics of the aggregate...

This paper shows how expectations-driven contagion of currency crises can arise even if the currency market has a unique equilibrium when viewed in isolation. The model of Morris and Shin (1998) is extended to allow speculators to trade in a second currency market. If speculators believe that a...

We use Mexican firm-level data to study the role of currency mismatches in exacerbating the negative effects of a devaluation in the corporate sector and to investigate what drives Mexican firms to borrow in foreign currency. Our results show that large firms and exporters tend to borrow more...

We formalize the concept of media slant as a relative emphasis on different issues of political interest by the media, and we illustrate the effects of the media choice of slant on political outcomes and economic decisions in a rational expectations model. In a two-candidate election, if the...

This paper investigates the stability of monetary exchange equilibria and the conditions necessary for an equilibrium of this type to emerge endogenously. Previous research on money as a medium of exchange has depended on either initial conditions or steady state conditions to pinpoint...

Economists have devoted substantial effort to understanding why some productive activities are organized under the same firm, with the majority of empirical studies focusing on product or capital markets. Using a unique data set that links occupational data from separate establishments to the...