We argue that one major cause of the U.S. postwar baby boom was the increased demand for female labor during World War II. We develop a quantitative dynamic general equilibrium model with endogenous fertility and female labor-force participation decisions. We use the model to assess the...

Public choice theory takes citizens as rationally ignorant about political issues, because the costs of being informed greatly exceed the utility individuals derive from it. The costs of information (supply side) as well as the utility of information (demand side), however, can vary...

We consider an economy where a finite set of agents can trade on one of two asset markets. Due to endogenous participation the markets may differ in the liquidity they provide. Moreover, traders have idiosyncratic preferences for the markets, e.g. due to differential time preferences for...

Using information on job changes and search behavior of workers and controlling for endogenous mobility we study firm-size wage differentials in Switzerland. We find that the observed cross-sectional firm size premium cannot be explained exclusively by worker heterogeneity. Almost 50 % of the...

The portfolio selection problem is traditionally modelled by two different approaches. The first one is based on an axiomatic model of risk-averse preferences, where decision makers are assumed to possess an expected utility function and the portfolio choice consists in maximizing the expected...

Temporary fluctuations of the U.S. consumption-wealth ratio, cay, predict excess returns on international stock markets at the business cycle frequency. This finding is the reflection of a common, temporary component in national stock markets. Exposure to this common component explains up to 60...

The burning of fossil fuels not only causes CO2 emissions but at the same time impairs local environmental quality such as ambient air quality. The present paper analyzes the possible distortion arising from international trade in CO2 emissions when local externalities persist. It is...

Traditionally, the virtue of democratic elections has been seen in their role as means of screening and sanctioning shirking public officials. This paper proposes a novel rationale for elections and political campaigns considering that candidates incur psychological costs of lying, in particular...

Peer reviews and rankings today are the backbone of research governance, but recently came under scrutiny. They take explicitly or implicitly agency theory as a theoretical basis. The emerging psychological economics opens a new perspective. As scholarly research is a mainly curiosity driven...

We study the short-run effect of involuntary job loss on comprehensive measures of public health costs. We focus on job loss induced by plant closure, thereby addressing the reverse causality problem of deteriorating health leading to job loss as job displacements due to plant closure are...