Previous work on the property rights theory of the firm suggests that in the presence of outside options, ownership may be counter productive in motivating managers. This paper shows that this conclusion depends on the assumption that a manager's outside option only depends on her own...

Gains from trade policy reform are not distributed equally between countries, the variation in the distribution of welfare changes being particularly notable between developed and developing countries. This paper assesses , both theoretically and empirically, what factors determine the...

Fundamental Equilibrium Exchange Rates, or FEERs, are defined as the real exchange rate which would prevail if the economy were to be in internal and external equilibrium. As such they have been widely used both for policy purposes and as a method of calculating the level to which the real...

A general model of two-period duopoly is set up to show how inventories can serve a strategic purpose, enabling the firm to commit to raise its latter-period output. The strategic effect of inventories depends on the convexity of the cost function, on the cost of storage, and on the slopes of...

This paper presents a structural model of optimal fiscal policy in a multiparty system which allows the existence of coalition governments. The paper shows how political effects weaken stabilizing feedback rules from inherited public debt to the current poicy instruments of government...

This paper considers regression-based test criteria for the hypothesis of conditional variance nonstationary in the logarithmic family of GARCH processes. The tests are based on teh ARMA representations that appropriate nonlinear transformations of GARCH-type processes admit. Simulation...

This paper examines the intragenerational redistribution aspect of social security. The level of social security is determined by majority voting between individuals who differ (ex-ante) in their earning ability and life expectancy. Given incentive effects, the voting equilibrium depends on...

The expectations hypothesis of the term structure of interest rates implies that the spread between short and long bond yields should forecast next period's change in the long yield. Regression based tests have systematically rejected the expectations hypothesis, with estimated coefficients far...

A simple folk theorem of repeated games states that Pareto-efficient outcomes can be achieved in a perfect equilibrium where deviations are punished by a reversion to Nash equilibrium of the associated stage game (Nash threats equilibrium), provided that players are sufficiently patient. In a...