This paper uses a panel VAR model to improve upon the existing literature on interregional risk sharing channels (e.g. Asdrubali, Sorensen and Yosha, 1996) in several respects. First, it endogenizes the output process within a multi-equation framework, capturing the dynamic feedback between...

Despite wide recognition of their significant role in explaining sustained grwoth and economic development, uncompensated knowledge spillovers have not yet been fully modeled with a microeconomic foundation. The main purpose of this paper is to illustrate the creation of knowledge as well as its...

The earlier work on corruption reform often argues that a broader set of reforms be implemented. The main purpose of the paper is to examine the validity of this argument by formalizing the analysis of the interactions of procurement reforms. The model not only supports well-known interaction...

The dynamic price competition in a horizontally differentiated duopoly when consumers value previous market shares is analyzed. The conditions for the existence of stable Markov-Perfect Equilibrium(MPE) in linear strategies are established. When they exist, the optimal pricing policies suggest...

Financial crises are endogenized through institutions related to the corporate sector and the interbank market. Financial crises can emanate from financial institutions which determines the nature of equilibrium in the interbank market. In a pooling equilibrium all illiquid banks are treated in...

By using asymptotic expansion techniques approximation formulae are developed for the bias of ordinary and generalized Least Squares Dummy Variable (LSDV) estimators in dynamic panel data models. Earlier results on bias approximation in first-order stable dynamic panel data models are extended...

We develop a theoretical model that replicates three observed phenomena in securities markets: serial correlation in trades; serial correlation in squared price changes (conditional heteroskedasticity); and more persistent serial correlation in trades than in squared price changes. In the model...

This paper investigates under which conditions we can find a policy that can be made time-consistent in an economy with both private and public capital, and how far in terms of growth and welfare this policy would be with respect to the full-commitment policy. A benevolent government chooses...

We provide a proof of the consistency and asymptotic normality of the estimator suggested by Heckman (1990) for the intercept of a semiparametrically estimated sample selection model. The estimator is based on "identification at infinity" which leads to non-standard convergence rate. Andrews and...

We consider a multi-stage game of fund-raising to study the announcement strategy of a fund-raiser, who is privately informed about the number of potential contributors, with the objective of collecting maximal contributions for a public project. We show that whether the public project is convex...