Technological progress as a major source of economic development stems from the interaction of two types of innovations, drastic and incremental. While the former sets the fundamental pace of economic progress by redefining production possibilities as Schumpeter strongly emphasized, the latter...

We relate the phenomena of sluggish interregional labour reallocation and in-kind compensation in Russia to 'attachment' strategies of firms: Paying wages in non- monetary forms makes it hard for workers to raise the cash needed for quitting their region in order to find better jobs in more...

By offering or choosing a contract the informed agent might reveal information to the principal which could be used for immediate renegotiation. This is discussed in an axiomatic approach. <br> We show that if, given the revealed information, there exists a contract which is preferred by everyone,...

This paper proposes a new approach to modeling volatility changes and clustering. In particular, we use a parsimonious high-order Markov chain which allows for duration dependence. As in the standard 1st-order Markov-switching model, this structure can capture turning points and shifts in...

We show that information sharing among banks may serve as a collusive device. An informational sharing agreement is an a-priori commitment to reduce informational asymmetry between banks in future lending. Hence, information sharing agreements tend to increase the intensity of competition in...

This paper considers tests for a unit root when the innovations follow a near-integrated GARCH process. We compare the asymptotic properties of the likelihood ratio statistic with that of the least-squares based Dickey-Fuller statistic. We first use asymptotics where the GARCH variance process...

The purpose of this paper is to prove the second fundamental theorem of welfare economics and the existence of competitive equilibrium in production economies over an infinite horizon with general consumption sets. In the literature of the studies for an economy of infinite dimmentional...

Recent geography and trade empirical studies based on monopolistic competition [Hummels, 1998; Hanson, 1999; Head and Ries, 1999] suggest high levels of trade price-elasticities (between 3 and 11). However, direct estimations of price-elasticities in trade equations, using price indexes at the aggregate...

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A one-shot market with two sides is considered where everybody can be matched with at most one person. Individuals have to find trading partners on their own. Whether searching or waiting is the optimal strategy is the central question of this paper. In a market where searching and waiting are...