We analyze a model where foreign banks finance local long-term projects by short-term credits that are denominated in foreign currency. The foreign banks face two kinds of risk: the macro-economic risk of a currency crisis, and the micro-economic risk of project failure. There are no bailout...

We study markets where the characteristics or decisions of certain agents are relevant but not known to their trading partners. Assuming exclusive transactions, the environment is described as a continuum economy with indivisible commodities. We characterize incentive constrained efficient...

In this paper we specify and estimate a structural model of multiproduct firms for the semiconductor industry. In addition, we explicitly consider dynamics over the product life cycle. We find that these two aspects have important implications and provide evidence that (i) Learning by Doing,...

Posted offer markets with costly buyer search are investigated in 18 laboratory sessions. Each period sellers simultaneously post prices. Then each buyer costlessly observes one or (with probability 1-q) two of the posted prices, and either accepts an observed price, drops out, or pays a cost to...

In this paper we propose a new multivariate GARCH model with time-varying correlations. We adopt the vech representation based on the conditional variances and the conditional correlations. While each conditional-variance term is assumed to follow a univariate GARCH formulation, the...

This paper attempts to account for current huge international income disparities by considering the fact that countries enter into modern growth at different points in time. The mechanism for the transition from stagnation to modern growth is taken from Hansen and Prescott (1999). Countries in...

In this paper we present a new approach to the specification of dynamic factor models. Our model has three advantages over existing work. Firstly, it is based on a minimal-dimension state-space representation giving some gain in computational efficiency over existing methods. Secondly, it easily...

No abstract.

We analyse empirically the effect of uncertainty on the investment decisions of a sample of quoted German firms. The uncertainty measures are constructed by employing two procedures: the conventional formula of standard deviation, and the GARCH methodology. We find that uncertainty exerts a...

We examine the effect of the number of candidates and the impact of ideology on the efficiency of the electoral process. We show that the tendency to focus on policies that provide particularistic benefits increases with the number of candidates to the expense of policies that benefit the...