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After brief remarks on the history of modeling and inference techniques in economics and econometrics , attention is focused on the emergence of economic science in the 20th century. First, the broad objectives of science and the Pearson-Jeffreys' "unity of science" principle will be reviewed....

Sustainability of fiscal policies is one of the major issues in macroeconomics. Recently, in the United States, both Congress and Administration have proposed budgets designed to reduce the deficit and reach a zero debt target by the years 2002 and 2015, respectively. At the same time, European...

We consider a very simple competitive economy with infinitesimal agents and asymmetric information. We define a Common Knowledge (CK hereafter) Equilibrium as a price distribution compatible with CK of market clearing and rationality. At equilibrium, expectational mistakes and incorrect...

Traditional microstructural theories of asset pricing emphasize the role of volume as a trend indicator. With the availability of large transaction data sets, one has started recently to incorporate more information of the trades, such as the time between trades, to describe the multivariate...

In repeated games with imperfect public monitoring, players can use public signals to coordinate their behavior perfectly, and thus support cooperative outcomes with the threat of punishments. But with even a small amount of private monitoring, players' private histories may lead them to have...

The federal government delegates various aspects of financial market regulation to self-regulatory organizations (SROs) such as the New York Stock Exchange and the National Association of Securities Dealers. We model one regulatory task of an SRO, the enforcement of rules designed to prevent the...

This paper analyzes how differences in the composition of wealth between human and physical capital among families affect fertility choices. These in turn influence the dynamics of wealth and income inequality across generations through a tradeoff between quantity and quality of children. Wealth...

This paper addresses the question of whether R&D should be carried out by an independent research unit or be produced in-house by the firm marketing the innovation. We define two contractual structures. In an independent structure, the firm that markets the innovation buys it from an independent...