This paper proposes and analyzes a model of how the behavior of voters and that of potential party activists together determine party membership and the ideological characteristics of party platforms. Membership decisions are based on expressive motivations, whereas platforms are chosen...

This paper investigates the relative small sample performance of several robust unit root tests by means of a simulation study. It is confirmed that the traditional least-squares based Dickey-Fuller test has substantially lower power than several robust alternatives if the error distribution is...

We test for the influence of government strength and dispersion of power among the parties of coalition governments on the size of annual debt accumulation through budget deficits in OECD-countries from 1970 to 1999. Government strength and power dispersion in coalition governments are measured...

An important aspect of household surveys is the design of consumption questions. A controlled experiment shows that a single question on total monthly nondurables expenditure and a design with 35 disaggregated categories produce different results. These differences vary with household...

This paper proposes a model of the term structure with nonstationary term premia which exhibit a factor structure. This explains the common empirical finding of a cointegrating rank smaller than the one predicted by the rational expectations hypothesis of the term structure. An application to...

The aim of this paper is two-fold. First, we analyze the role of wage rigidities in labor market adjustments to international trade and biased technological progress in a small open economy. We introduce efficiency wages into a neoclassical trade model and show that changes in relative wages are...

The privatization process in Eastern Europe has not been a success everywhere. The opinion or experts about the optimal privatization strategy has changed over the last decade. This article first presents the theoretical foundation for privatizing state-owned enterprises. It then discusses the...

An impending demographic crisis in Germany calls for fundamental reforms of the pension system. In a democracy, however, reforms require the support of the majority of the electorate. To determine whether the majority is in favour of reforms of the pension system, we calculate for each year the...