Recent work shows that a low correlation between the instruments and the included variables leads to serious inference problems. We extend the local-to-zero analysis of models with weak instruments to models with estimated instruments and regressors and with higher-order dependence between...

This study investigates an incomplete markets economy in which the saving behavior of a continuum of infinitely lived agents is influenced by precautionary saving motives and borrowing constraints. Two types of assets (interest bearing IOUs and money) enhance the liquidity of agents by providing...

In this paper we study 2-state Markov switching VAR models of monthly unemployment and inflation for three countries: Sweden, United Kingdom, and the United States. We find that such models seem to provide a better description of the data than single regime VARs and need fewer lags to account...

We estimate a structural model of financing choices in presence of managerial moral hazard, financial distress costs and taxes. In the theoretical model, firms with low cost of managerial effort, and high financial distress costs and non--debt tax shields, find it optimal to issue equity....

This paper addresses the question of how to model individual behavior in the face of changes in the set of rules that govern the social welfare system in Sweden. To this end, the Swedish sickness insurance provides an excellent study object, since the system has often been changed during the...

The role of the computer at the workplace is examined in determining the wage structure in Germany. It is shown that the wage premium attributed to using a computer at work using cross-sectional results for 1997 is 7%. To control for unmeasured individual effects, we use a random effects and...

This paper establishes new existence and welfare results for the Kiyotaki-Wright model [1989] considering mixed strategies that do not restrict agents to play a unique strategy for each opportunity set. For a general version of the model, I construct many stable equilibria in which goods with...

The market mechanisms built into the Kyoto Protocol have the potential of significantly reducing costs of limiting greenhouse gases. But if trading proceeds on a bilateral project-by-project basis rather than on a frictionless market, the total cost saving potential of trading is unclear. This...

This paper uses spatial econometric methods to investigate property-tax competition among local governments. The theoretical model is drawn from the literature on tax competition, in which local jurisdictions choose property-tax rates taking into account the migration of mobile capital in...

We present theoretical and empirical results on consumption during an unemployment spell. The theory model extends the conventional intertemporal allocation model to take explicit account of the fact that households buy clothing and small durable goods (such as pillows and plates) that are...