The focus of the paper is on issue-by-issue bargaining procedures in which parties are allowed to differ not only in their valuations of the issues but also in their rates of time-preference. We show that the interplay of the forces in the bargaining game is complex and standard assumptions in...

It is well known that research and development (R&D) is an important engine for economic growth. Also, initial wealth inequality and subsequent economic growth are well known to be related. This paper links inequality and R&D-driven growth. It shows that in a class of economies where R&D is the...

CWe investigate how continental European unemployment can be reduced without reducing unemployment benefits and without reducing the net income of lowwage earners. Lower unemployment replacement rates reduce unemployment, the net wage and unemployment benefits. A lower tax on labour increases...

Existing empirical evidence suggests that the Uncovered Interest Rate Parity (UIRP) condition may not hold due to an exchange risk premium. For a panel data set of eleven emerging European economies we decompose this exchange risk premium into an idiosyncratic (country-specific) elements and a...

In models of economic geography, plant-level scale economies and trade costs create incentives for spatial agglomeration of production into a manufacturing core and agricultural periphery, creating regional income differentials. We examine tax competition between national governments to...

This paper compares the relative effectiveness of inflation contracts and inflation targets in the presence of uncertainty regarding the central bank’s preferences and the underlying output target. The model explains why discretion may be superior to a delegation solution. We also show that...

We estimate and compare two empirical measures of the weak sustainability of an economy for the first time: the change in augmented green net national product (GNNP), and the interest on augmented genuine savings (GS). Yearly calculations are given for each measure for Scotland during 1992-99....