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Gersbach, Hans; Schneider, Maik T. - 2009

In this paper we examine the impact of tax contracts as a novel institution on elections, policies, and welfare. We consider a political game in which three parties compete to form the government. Parties have policy preferences about the level of public-good provision and benefit from perks...

Persistent link: https://www.econbiz.de/10011753187

Resource Wealth, Innovation and Growth in the Global Economy

Peretto, Pietro F.; Valente, Simone - 2010

We analyze the relative growth performance of open economies in a two-country model where different endowments of labor and a natural resource generate asymmetric trade. A resource-rich economy trades resource-based intermediates for final manufacturing goods produced by a resource-poor economy....

Persistent link: https://www.econbiz.de/10011753188

The Larger the Better? The Role of Interest-Group Size in Legislative Lobbying

Schneider, Maik T. - 2010

We develop a model of legislative lobbying where policy proposals are endogenous. We show that a policy proposer with preferences tilted towards one lobby may be induced by an increase in that interest group's size to propose policies geared towards the opposing lobby. Hence, a larger lobby size...

Persistent link: https://www.econbiz.de/10011753190

Trading Off Generations: Infinitely-Lived Agent Versus OLG

Schneider, Maik T.; Traeger, Christian; Winkler, Ralph - 2010

The prevailing literature discusses intergenerational trade-offs predominantly in infinitely-lived agent models despite the finite lifetime of individuals. We discuss these trade-offs in a continuous time OLG framework and relate the results to the infinitely-lived agent setting. We identify...

Persistent link: https://www.econbiz.de/10011753192

Default Risk in Stochastic Volatility Models

Gersbach, Hans; Surulescu, Nicolae - 2010

We consider a stochastic volatility model of the mean-reverting type to describe the evolution of a firm’s values instead of the classical approach by Merton with geometric Brownian motions. We develop an analytical expression for the default probability. Our simulation results indicate that...

Persistent link: https://www.econbiz.de/10011753195

Endogenous Growth, Asymmetric Trade and Resource Taxation

Bretschger, Lucas; Valente, Simone - 2010

Since 1980, the aggregate income of oil-exporting countries relative to that of oil- poor countries has been remarkably constant despite structural gaps in productivity growth rates. This stylized fact is analyzed in a two-country model where resource- poor (Home) and resource-rich (Foreign)...

Persistent link: https://www.econbiz.de/10011753196

Risk Aversion and the Value of Risk to Life

Bommier, Antoine; Villeneuve, Bertrand - 2010

risk neutrality with respect to life duration. To overpass this limitation, we extend the theory to a simple variety of …-saving programs: current practice, we estimate, puts too little weight on mortality risk reduction of the young. Our correction …

Persistent link: https://www.econbiz.de/10011753197

Comparative Risk Aversion: A Formal Approach with Applications to Saving Behaviors

Bommier, Antoine; Chassagnon, Arnold; Le Grand, François - 2010

We consider a formal approach to comparative risk aversion and applies it to intertemporal choice models. This allows …], Epstein and Zin [9] and Quiggin [24] are well-ordered in terms of risk aversion. Moreover, opting for this model-free approach … allows us to establish new general results on the impact of risk aversion on savings behaviors. In particular, we show that …

Persistent link: https://www.econbiz.de/10011753198

On the Public Economics of Annuities with Differential Mortality

Bommier, Antoine; Leroux, Marie-Louise; Lozachmeur, … - 2010

. Individual preferences are represented by a generalized life-cycle utility function which can exhibit temporal risk aversion. We … successively compare utilitarian allocations when individuals exhibit temporal risk neutrality and temporal risk aversion. This …

Persistent link: https://www.econbiz.de/10011753199

Sequential Aggregation of Verifiable Information

Hahn, Volker - 2010

We introduce the notion of verifiable information into a model of sequential debate among experts who are motivated by career concerns. We show that self-censorship may hamper the efficiency of information aggregation, as experts withhold evidence contradicting the conventional wisdom. In this...

Persistent link: https://www.econbiz.de/10011753200