This paper examines the role of heterogeneous beliefs in a cobweb model. We proceed in two stages. First, two groups of agents are distinguished. They are either fundamentalists, or chartists. The latter specify the expected price from an adaptive process, the former have a "rational behaviour"....

In this article a method for joint estimation of the number of stochastic trends and the deterministic processes in a multivariate error correction model is presented. This approach takes advantage of the Laplace method of approximating integrals and, the second important contribution of the...

In this paper, we use Weil's (1989) overlapping dynasties framework to analyse a microfounded version of the real balance effect envisaged by Pigou (1944). The effect is absent from representative agent models as then net monetary wealth is always zero. With population growth, however, net...

We study the endogenous relationship between health care, life expectancy and output in a modified neoclassical growth model. While health care competes resources away from goods production, it prolongs life expectancy which in turn leads to higher capital accumulation. We show that savings and...

We investigate the relationship between training and the likelihood of commercial survival over a 7-year period, using a survey of British establishments. We find that in stablishments of 200 or more employees, increased training of those in Professional, Sales, and Clerical and Secretarial...

If the distribution of industrial employment is uneven across regions, changes in patterns of production will require the reallocation of labour across regions as well as industries. In this paper we consider this aspect of the adjustment process. Specifically, we compare the geographical...

The paper studies the determinants of unemployment in a two-countrymodel, where real wages are the outcome of the strategic interaction between various institutional players (firms, unions, central banks). We show that: (i) the results derived in the recent literature on this topic are not...

We report results of an internet experiment designed to test the theory of informational cascades in financial markets. More than 6000 subjects, including a subsample of 267 consultants from an international consulting firm, participated in the experiment. As predicted by theory, we find that...

We explore the impact of non-collusive corruption on the wealth distribution. We show that the distributional consequences depend crucially on the degree of capital market imperfections. With perfect capital markets, corruption does not redistribute wealth within the private sector. However, if...

This paper proposes a new framework for studying the effects of monetary policy on business investment, modeling investment spending as a VAR. Based on a panel of financial statement data for 6,408 German firms (44,345 datapoints) supplemented with user costs of capital and confidential measures...