This paper analyzes the effects of technological risk on long-run growth when labor supply is elastic and production gives rise to a pollution externality. We show that the randomness of production, as well as the endogeneity of labor supply, affects the equilibrium solutions for the social...

There is a general presumption that social preferences can be ignored if markets are competitive. Market experiments (Smith 1962) and recent theoretical results (Dufwenberg et al. Forthcoming) suggest that competition forces people to behave as if they were purely self-interested. We qualify...

Traditionally, aggregate liquidity shocks are modeled as exogenous events. This paper analyzes the adequate policy response to endogenous exposure to systemic liquidity risk. We analyze the feedback between lender-of-last-resort policy and incentives of private banks, determining the aggregate...

This paper examines whether government ideology has influenced the allocation of public expenditures in OECD countries. I analyze two datasets that report different expenditure categories and cover the time periods 1970-1997 and 1990-2006, respectively. The results suggest that government...

In this paper we study the role of absolute versus relative income using functional magnetic resonance imaging (fMRI). While being scanned in two adjacent MRI scanners, pairs of subjects had to simultaneously perform a simple estimation task that entailed monetary rewards for correct answers. We...

We exploit the German separation and later reunification to investigate whether political regimes can shape attitudes about appropriate roles for women in the family and the labor market. During the divided years, East German institutions encouraged female employment, while the West German...

The observation that some immigrants choose not to integrate into the host society has caused political controversies across European states. This paper hypothesizes that immigrants can exploit social networks of different scales in order to substitute for costly integration. Using a novel...