Empirical foundations for the view that high inflation impairs GDP growth are <p> examined using annual data for 115 countries over the period 1960-1995. <p> Taking into account country heterogeneity and time-specific symmetric shocks, <p> as well as endogeneity of inflation and dynamics of GDP growth we...</p></p></p>

Due to underlying technological and organizational differences, industries differ <p> in their need for external finance. Since services provided by the financial sector <p> are largely immobile across countries, the pattern of industrial specialization <p> should be influenced by the degree of financial...</p></p></p>

This paper models a two-period media contest between two political <p> candidates campaigning to win an election. Two main cases <p> are examined. In the first case voters behave as unbiased Bayesian <p> updaters when assessing political information. The second case considers <p> voters suffering from...</p></p></p></p>

We report the results from a representative survey of human resource managers in 885 Swedish firms. We estimate that during the severe recession of the 1990s, only 1.1 percent of workers took a cut in regular nominal pay. We trace the lack of wage moderation to a combination of exogenous...

A potential source of instability of many economic models is that agents have little incentive to stick with the equilibrium. We show experimentally that this may matter with price competition. The control variable is a price floor, which increases the cost of deviating from equilibrium....

The standard race-to-the-bottom result is curious in one respect. If a nation wants to attract foreign capital, providing the optimal level of public amenities (and thus charging the optimal tax rate) would seem optimal. This conjecture fails in the standard tax competition model since foreign...

The large differences among advanced OECD countries in the shares of workers that are employed by the government can probably only to a small part be explained by factors that are in the center of modern organization theory explanations for public vs. private ownership. This paper explores a new...

The aim of this paper is to highlight the role of parameter uncertainty in optimal open-economy monetary policy. Parameter uncertainty is introduced by assuming that the coefficients of the model are random, but with known stochastic properties. The results indicate that the Taylor rule is a...