We investigate the financial implications of a multinational firm's choice between outsourcing and integration from the perspective of the supplier. Using a simple model, we explore the extent to which an integrated supplier's access to finance, as well as its sources of funding, change relative...

This paper complements research on how {\em love of wealth} bears on key variables in a Ramsey-Cass-Koopmans growth framework. It is shown that for an optimum the social planner cannot have an excessive {\em love of wealth}. If the planner has the `right' {\em love of wealth} an optimum exists...

In several empirical contributions researchers have found a gender gap in preferences for public spending. This paper analyzes the persistence of these gender gaps when income differences between individuals are taken into consideration. Using survey data from the years 1996 and 2006 of German...

The paper looks at the determinants of fiscal adjustments as reflected in the primary surplus of countries. Our conjecture is that governments will usually find it more attractive to pursue fiscal adjustments in a situation of relatively high growth, but based on a simple stylized model of...

This paper uncovers a novel mechanism by which bubbles crowd in capital investment. If capital is initially depressed by a binding credit constraint, injecting a bubble triggers a savings glut. Higher returns in a new bubbly equilibrium attract additional investors who expand investment at the...

That institutions matter is widely accepted among economists and so are social norms as an important category of informal institutions. Social norms matter in many economic situations, but in particular for markets. The economic literature has studied the interrelation between markets and social...

The Great Recession and the resulting European debt crisis revived a debate about deeper fiscal integration in the Eurozone. We discuss different alternatives how an unemployment insurance system for the euro area could be designed and run counterfactual simulations based on micro data to...

The assumptions that subjects hold beliefs and that the chosen actions are not altered by a proper elicitation of these beliefs are widely used in economics. In this paper I experimentally test whether the second assumption is correct. Especially controlling for different game properties, I nd...

For a repeated procurement problem, we compare two stylized negotiating cultures which differ in how the buyer uses an entrant to exert pressure on the incumbent resembling U.S. style and Japanese style procurement. In each period, the suppliers are privately informed about their production...

We study the effect of international trade and freeness of trade on interregional inequality within countries. We estimate a model derived from a structural economic geography approach where interregional inequality depends on weighted trade shares and trade costs and where we can derive an...