In the independent-private-value model, we allow resale among bidders following a first-price sealed-bid, second-price sealed-bid, or English auction with two bidders. We consider two regimes with regard to the disclosure of the sealed bids: full disclosure and no disclosure. Either the auction...

This paper provides an explanation for the choice of currency of invoice of exports to the U.S. We find an empirical relationship between the riskiness of the exchange rate and the fraction of imports invoiced in the importer¡¯s currency, the exporter¡¯s currency, and a third country...

This paper provides a simple, graphical review of the Keynes versus the classics debate. It focuses on four key issues: the roles of ¡ãexible wages and the velocity of money as well as the determination interest rates and the nominal price level. Its aim is to improve upon the rather bland...

This study tests whether changes in the short-term interest rate can best be modelled in a nonlinear fashion. We argue that there are good theoretical and empirical reasons for adopting this strategy. Using monthly data from several industrialized countries, namely Canada, Germany, Sweden,...

Low corporate taxes can help attract new firms. This is the main mechanism underpinning the standard race-to-the-bottom view of tax competition. A recent theoretical literature has qualified this view by formalizing the argument that agglomeration forces can reduce firms' sensitivity to tax...

Using the Health and Retirement Study, Goldman and Smith (2002) [“Can patient self-management help explain the SES health gradient?”, PNAS, 99(16), 10929-34] find that poor self-management of health has significant effects on health deterioration and that such poor behavior is less likely to...

The fiscal externality model is extended to an infinite horizon setting with stochastic technologies. With imperfect population mobility some gains from risk sharing are not exploited by the regional authorities. Nevertheless, regional authorities who care about their reputation may be able to...

The implications of different cash in advance (CIA) constraints for open economies are worked out. If CIA constraints are only for consumption expenditures, changes in the rate of growth of money will have no steady state effects. If all transactions, even those involving bonds, are subject to...

Motivated by the economic theory of cost functions, bivariate Bernstein polynomials are considered for approximating shape-restricted functions that are continuous, non-negative, monotone non-decreasing, concave, and homogeneous of degree one. We show the explicit rates of convergence of our...

Information on the expected changes in credit quality of obligors is contained in credit migration matrices which trace out the movements of firms across ratings categories in a given period of time and in a given group of bond issuers. The rating matrices provided by Moody’s, Standard...