We model the two way interaction between education, corruption and the level of output. Corruption reduces income levels and hence educational attainment. Education in turn affects the incentives for corruption: more education increases output and thus the rents from corruption, but it also...

In this paper we consider the problem of making inference on a structural parameter in instrumental variables regression when the instruments are only weakly correlated with the endogenous explanatory variables.

The effects of open market operations and long versus short bond financing on risk in financial markets in a stochastically growing economy are studied. An increase in short bonds, resulting from exchanging long bonds, increases the riskiness of long bonds and raises their real rate of return....