We present a dynamic two-country model in which military spending, geopolitical risk, and government bond prices are jointly determined. The model is consistent with three empirical facts: hegemons have a funding advantage, this advantage rises with geopolitical tensions, and war losers suffer...

We consider the optimal policy problem of a benevolent planner, who is uncertain about an individual's true preferences because of inconsistencies in revealed preferences across behavioral frames. We adapt theories of expected utility maximization and ambiguity aversion to characterize the...

This paper tests whether mutual funds on aggregate matter for the equilibrium stock returns due to (i) uncertain fund flows, which directly affect fund size and managers' income; and (ii) time-varying liquidity costs of assets. I find the aggregate shocks to fund flows enter the pricing kernel in...

1. The fault line of axiomatization : Walras' linkage of physics with economics -- 2. The mathematical turn in economics : Walras, the French mathematicians, and the road not take -- 3. The arrow of time in economics : from Robinson's critique to the new historical ecnomics -- 4. Of puzzles and...

Government plays a critical role in the development and adoption of new technology with social benefits. While there are many policies available under different forms and names, the two most popular subsidy policies are a technology-push policy, which awards manufacturers for R\&D efforts, and a...