Tobin (1958) has argued that in the face of potential capital losses on bonds it is reasonable to hold cash as a means to transfer wealth over time. It is shown that this assertion cannot be sustained taking into account the evolution of wealth of cash holders versus non cash holders. Cash...

Nominal-to-real data transformations are routinely used in empirical work. A common example is the transformation of nominal money and prices to real money and the rate of inflation. This paper establishes the necessary and sufficient condition for a transformation to reduce the order of...

This paper analyses wage formation in the Nordic countries at the regional level by the use of micro-data. Our results deviate systematically from the main conclusions drawn by Blanchflower and Oswald (1994). We find no stable negative relation between wages and unemployment across regions in...

We study the optimal regulation of banking groups (“banks”), taking both minimum capital requirements and legal structure into account. A bank can set up either as one legal unit facing limited liability jointly (branch structure) or as a bank holding company with subsidiaries (subsidiary...

This paper argues that the high historical excess returns to equity are1 a result of a severe ex post bias over the period from 1915 to circa 1960 because inflation surprises during this period drove a wedge between ex ante and ex post returns to bonds. Furthermore, it is shown that ex ante and...

This paper proposes a dynamic proportional hazard (PH) model with non-specified baseline hazard for the modelling of autoregressive duration processes. A categorization of the durations allows us to reformulate the PH model as an ordered response model based on extreme value distributed errors....

This article deals with macroeconomic transmission effects of the imposition of tariffs in large countries under different institutional arrangements of the world economy. We employ a symmetric two-country model and study the effects of a tariff on employment, consumer prices and real net income...

Core equivalence and shrinking of the core results are well known for economies. The present paper establishes counterparts for bargaining economies, a specific class of production economies (finite and infinite) representing standard two-person bargaining games and their continuum counterparts...

A multisectoral temporary general equilibrium macro model with wage bargaining is presented. In each sector agents are divided into capitalists and workers. The markets for produced goods and money are competitive, but the wage rate in a sector is determined by negotiation between an employers'...