The paper considers the estimation of the coefficients of a single equation in the presence of dummy intruments. We derive pseudo ML and GMM estimators based on moment restrictions induced either by the structural form or by the reduced form of the model. The performance of the estimators is...

We extend the citizen candidate framework by allowing for endogenous party formation. When a party is formed, any member of that party that wants to be a candidate in the election, first has to run in the primary election of her party. We show that in equilibrium one left-wing and one right-wing...

Most industrialized countries entered the 1980s with their public finances in disarray. At the time, persistent deficits pushed up public debt-to-GDP ratios. Despite such similarities, deficit spending varies substantially between countries and within countries over time. Recent theoretical and...

Belgium and The Netherlands share a lot of common characteristics in historical development, geographical location, political and institutional structure and in the size and degree of the openness of their economies. However, detailed comparisons of economic development of Belgium and The...

A dynamic overlapping-generations model of a small open economy with imperfect competition in the goods market is constructed. A tariff increase reduces output and employment and leads to an appreciation of the real exchange rate both in the impact period and in the new steady state. The tariff...

The literature on international transfers largely ignores the fact that transfers are often given in the form of money. We analyze both the welfare consequences of financial transfers for the donor and the recipient, and their impact on the current account. Under normal circumstances transfer...

We study the role of takeover threats as a corporate control mechanism using Aghion and Tirole's (1997) model of formal and real authority. Shareholders do not monitor the manager's actions, since ownership is widely dispersed. A corporate raider may monitor, and steps in if a profit opportunity...

The effectiveness of policies to reduce the use of energy depend on the elasticity of substitution between the various inputs and on the rate of technological progress. This paper presents a theoretical model emphasising energy investments\' characteristics of uncertainty and irreversibility...

This paper attempts to explain the growth of labour productivity by (inter)national spillovers from R&D and patenting. We develop a model that is tested for Germany, France, the United Kingdom and the United States of America using a new set of panel data for the period 1955 until 1991. The...

This paper investigates the effect of uncertainty on economic growth. We construct measures of export uncertainty, government policy uncertainty and price uncertainty to augment a growth model, and using econometric techniques we test for robustness of the effects of these measure on economic...