We investigate a general parametric model of adaptive learning. The model spans most of the adaptive learning procedures proposed in the literature where agents optimize given their ranking over actions, perhaps allowing for experimentation. It provides a convenient parametric framework to...

Unit root tests for time series with level shifts of general form are considered when the timing of the shift is unknown. It is proposed to estimate the nuisance parameters of the data generation process including the shift date in a first step and apply standard unit root tests to the...

The paper studies the effects of tax policy on entrepreneurship and venture capital activity. Entrepreneurs pursue a single high risk project each but have no own resources. Financiers provide equity finance. They must structure the entrepreneur's profit share and base salary to assure their...

We analyze the behaviour of prices using a large disaggregated data set for Poland during transition from a planned to a market economy. The size of price changes and the frequency of adjustment both fall as the inflation rate declines. Price setters follow a mixture of state- and...

Assessing the demand for products with characteristics that are unobservable or difficult to measure is becoming increasingly important with the growing proliferation and value of such products. Analyzing industry performance and firm competition in these sectors is hindered by the failure of...

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This paper provides a complete analytical characterization of the positive and normative effects of alternative exchange rate regimes in a simple two-country sticky-price dynamic general equilibrium model with money, technology, and government spending shocks. A central question addressed is...

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We study a vertical relationship between two firms, and we show that the extent of the downstream firm's borrowing affects the contract offered by the upstream firm. We establish a negative relationship between the level of debt and the downstream firm's probability of bankruptcy. We also show...

Tax competition among countries generally leads to inefficiently low tax rates on mobile tax bases like capital income. This should call for cooperative tax policies to be implemented, but as long as some countries do not take part in the cooperation the incentives for a subset of countries to...