The private and social efficiency of two "behavioral" coordination mechanisms is examined in this paper. In Cournot oligopoly, firms prefer immediate coordination on the Nash equilibrium (interpreted as a preplay communication) over the best-reply dynamics (and fictitious play) which converge to...

Can higher inflation diminish the government debt and contribute to financing the budget deficit? And how do these public finance concerns influence inflationary expectations?

By driving a wedge between the marginal returns to real and financial capital, inflation distorts production. The elimination of this distorsion increases both the level and the rate of growth of output. First, increased price stability improves the utilization of capital and thus increases the...

In an analysis of the risk-sharing properties of different types of pension systems, we show that only a fixed-fee pay-as-you-go (PAYG) pension systems can provide intergenerational risk sharing for living individuals. Under some circumstances, however, other PAYG pension systems can enhance the...

In conjunction with its tercentenary celebrations in 1968, Sveriges Riksbank (Bank of Sweden) instituted a new award, "The Central Bank of Sweden price in Economic Sciences in Memory of Alfred Nobel" on the basis of an economic commitment by the bank in perpetuity. Which criteria have guided the...

This paper analyses the incentives for collusion when an industry is regulated by means of yardstick competition. The central assumption is that firms must write collusive side contracts before the revelation of private information are unable to communicate later.