This is a paper on the creation and evolution of conventions of behavior in "inter-generational games". In these games a sequence of nonoverlapping "generations" of players play a stage game for a finite number of periods and are then replaced by other agents who continue the game in their role...

A country's financial system is internationally illiquid if its potential short term obligations in foreign currency exceed the amount of foreign currency it can have access to in short notice. This condition may be crucial for the existence of financial crises and/or exchange rate collapses...

This paper argues that the imposition of financial discipline is not sufficient to remedy ownership and governance-related deficiencies of corporate performance. Using evidence from the postcommunist transition economies, the paper shows that a policy of hard budget constraints falters when...

This paper studies competitive equilibria in economies characterized by the presence of asymmetric information, where non-exclusive contracts with payoffs dependent on the agents' private information are traded on competitive markets. For such economies competitive equilibria may not exist with...

We consider a representative agent, infinite-horizon economy where production requires private and public capital. The supply of public capital is financed through distortionary taxation. The optimal (second best) tax policy of a benevolent government is time inconsistent. We therefore introduce...

The objective is to compare the effectiveness of financial markets and financial intermediaries in financing new industries and technologies in the presence of diversity of opinion. In markets, investors become informed about the details of the new industry or technology and make their own...

This paper, based on a study of mid-sized firms in the Czech Republic, Hungary, and Poland, seeks to explain the reasons behind the marked impact of ownership on firm performance which has been observed in a number of studies in Eastern Europe and other parts of the world. Focusing in particular...

Over the postwar, the U.S., Europe and Japan have experienced what may be thought of as medium frequency oscillations between persistent periods of robust growth and persistent periods of relative stagnation. These medium frequency movements, further, appear to bear some relation to the high...

Economic models of the household allocation have predicted that increased levels of education and wage rates of women would lead to increases in their labor supply and lower levels of fertility. In international comparisons, however, differences in this pattern appear which cannot easily be...