We present a spot price model for wholesale electricity prices which incorporates forward looking information that is available to all market players. We focus on information that measures the extent to which the capacity of the England and Wales generation park will be constrained over the next...

We show how vicious circles in countries’ credit histories arise in a model where output persistence is coupled with asymmetric information between borrowers and lenders about the nature of output shocks. In such an environment, default creates a pessimistic outlook about the borrower’s...

Whether pension reforms lead to an improvement in macroeconomic performance is a controversial question. Some countries, which have implemented reforms, claim better economic performance while in others a positive result has yet to be seen. This paper explores two aspects of this issue further:...

We propose an additional solution to the comovement puzzle by developing a two-sector monetary model with housing production and an input-output structure. The model generates comovement between consumption and residential investment for large range of shocks hitting the economy. Consistent with...

This paper examines whether partisan politics and opportunistic government behavior generate political cycles in a small open economy, and, if so, whether such effects survive under increased economic integration. We discuss evidence drawn from Cyprus for the period 1978-2006. The empirical...

This article analyses promotion tournaments where candidates engage in multiple tasks. We consider a promotion rule where the winner of the promotion tournament is randomly selected from the best performers at each task. The promotion tournament can achieve an efficient outcome for any...

This paper studies the form of certain expected delay costs as a function of the arrival rate for customers who pass through a service facility that allows for reneging and retrials. We show that, under certain light traffic conditions, these costs are continuously increasing and convex...

We run a laboratory experiment were "friendship" networks are generated endogenously within an anonymous group. Our experiment builds on two phases in sequence: a network formation game and a trust game. We find that in those sessions where the trust game is played before the network formation...

We show how vicious circles in countries' credit histories arise in a model where output persistence is coupled with asymmetric information between borrowers and lenders about the nature of output shocks. In such an environment, default creates a pessimistic outlook about the borrower's output...