Vertical integration followed by quantity competition is studied. The downstream firms simultaneously decide whether to integrate with one of the upstream suppliers. If firms are not able to observe whether the vertically integrated competitor enters the intermediate good market, they are...

In this article the author, after a critical assessment of the main notions of services developed in economics, presents a revised definition of services based on process analysis. A corresponding distinction is made between material and non-material goods, on the one hand, and services, on the...

This paper analyzes the behavior of a central bank under strong (“Knightian”) uncertainty when the short run trade-off between output and infl‡ation is represented by the Sticky Information Phillips Curve recently proposed by Mankiw and Reis (2002). By solving the robust control...

Rapid population ageing has dramatically increased the social and economic cost of elderly care. Demand for care labour is increasing rapidly, and all countries are experiencing problems in recruiting enough workers to meet demand. In some countries, the shortage of care workers has been met by...

In this paper we analyze the intertemporal competitive equilibrium of a walrasian model of capital accumulation. We prove the existence of equilibria by generalizing a result of Todd (1979). We overcome the indeterminacy in savings allocation to multiple types of capital goods by introducing a...

By introducing search and matching frictions in both the labor and the credit markets into a cash in advance New Keynesian DSGE model, we provide a novel explanation of the incomplete pass-through from policy rates to loan rates. We show that this phenomenon is ineradicable if banks possess some...

We add some elements of prospect theory to an analytically tractable version of Lucas’s “islands†model and show that the inclusion of reference dependence, declining sensitivity and loss aversion into the agents’ utility function leads to three main results. First, the...

The paper assumes a continuum of two period-lived agents; agents are identical except for inherited income. Young agents allocate their inheritance between consumption and investment in human capital under uncertainty. In the second period they receive a wage proportional to the accumulated...

This paper characterizes the out-of-equilibrium dynamics of a symmetric, pure exchange economy with two goods and N agents with uniformly distributed preferences and identical endowments. Relaxing the auctioneer assumption, but maintaining a global price rule, sequentially random pairwise...

The Italian health care expenditures, HCE, have been basically explained with two main groups of theories. (1) Those explaining the peculiarity of the HCE growth as depending on demand and supply factors, such as ageing population, public finance share of health care, number of practising...