We study interfirm price competition in the presence of horizontal and vertical intrafirm conflicts in each firm. Intrafirm conflicts are captured by a principal-agent framework with firms employing more than one agent and implementing a tournament incentive scheme. The principals offer premium...

This paper identifies parameters responsible for welfare reversals when the basic New Keynesian model is approximated. In our setting, a reversal occurs when the Ramsey policy under timeless perspective commitment ceases to be dominant against the Taylor rule after approximating the model. We...

The paper presents a simple model of banking behavior where portfolio, liquidity, and liability management determine simultaneously the demand and supply of borrowed reserves on the interbank market. As the central bank is one player in this market due to its refinancing policy, it is able to...

We demonstrate the existence of an intergenerational equity-efficiency tradeoff in policy-making that aims at Pareto-efficiency across generations and sustainability, i.e. non-decreasing utility over time. Our model includes two salient characteristics of sustainability problems and policy: (i)...

We develop and formalize a utilitarian notion of responsibility for sustainability which is inspired by Singer's (1972) principle and the Brundtland Commission's notion ofsustainability (WCED 1987). We relate this notion of responsibility to established criteria forthe assessment of...

This note investigates the suitability of unilateral consumption taxes for alleviating climate change in a two-period two-country general equilibrium model with a finite stock of fossil fuel. We analyze the incidence of a unilateral consumption tax in the first period on world carbon emissions....

This paper analyses the influence of the exchange rate regime of a country on the level of tolerated corruption with a special focus on the interdependency of monetary and fiscal policies. Using a simple theoretical framework based on Barro-Gordon-Model I compare independent monetary policy with...