Static oligopoly theories disagree on whether mergers are profitable. The Cournot model says that many potential mergers would be unprofitable whereas the Bertrand model says that all mergers are profitable. We show that, for economically sensible parameter values, mergers are profitable for...

By adopting a VAR framework in first differences, recent literature has confirmed previous results in testing the macro rational-expectations hypotheses of rationality and neutrality: rationality is corroborated, neutrality is rejected. However, this paper shows that, by correctly incorporating...

Mankiw (1982) shows that consumer durables expenditures should follow a linear ARMA(1,1) process, but the data analyzed supports an AR(1) process instead; thus, a puzzle. In this paper, we employ a more general utility function than Mankiw's quadratic one. Further, the disturbance and depreciation...

We show that the Gini coefficient is a simple linear transformation of the center of gravity of income distribution. The new derivation and inequality decomposition methods are applied to income data for Korea in order to analyze the distributional impact of the recent economic crisis. We also...

We show that Stiglitz's (1974) classic principal-agency theory of share tenancy does not imply, as alleged, that the optimal tenant share is less than one for risk-averse tenants nor that the share decreases monotonically with the tenant's inherent risk aversion. Tenants may self insure by...

This paper uses data from the PSID to investigate how selective migration affects the relationship between business cycles and health. We show that, among the healthy, migration is used to insure against macroeconomic fluctuations. However, among the unhealthy, there is no relationship between...