When agents are liquidity constrained, two options exist - sell assets or borrow. We compare the allocations arising in two economies: In one, agents can sell government bonds (outside bonds) and in the other they can borrow (issue inside bonds). All transactions are voluntary, implying no...

When agents are liquidity constrained, two options exist - borrow or sell assets. We compare the welfare properties of these options in two economies: in one, agents can borrow (issue inside bonds) and in the other they can sell government bonds (outside bonds). All transactions are voluntary,...

We study the degree of corruption in a hierarchical model of government. In particular, we explore the question of whether adding a layer of government simply increases the total amount of corruption or generates an organizational efficiency (via a principal-agent relationship between levels of...