Six years after the Revolution and despite half a century of sacrifices for a better future Romania remains impoverished and much further behind Western Europe in terms of economic development than it was before the Second World War. Against this backdrop the study takes stock of the situation...

This paper studies the strategic interaction on oligopolistic markets where firms have debt obligations. For sufficiently high (low) quantities (prices) of the competitors there exists no unique strategy that maximise equity holders payoff, since whatever quantity (price) an indebted firms sets,...

The paper considers the pricing decision by a seller who has private information about quality. It is shown that, contrary to widespread belief, high quality products may be sold with positive probability even when buyers have no private information. The separating equilibria have a very simple...

Vietnam has opened up towards the rest of the world and made considerable progress towards a market economy. The process challenges the institutional capacity of the country. In this context the reorganization of the banking system is central. The paper discusses banking in Vietnam as it appears...

Corruption is a widespread phenomenon around the world. Yet, models of hierarchical agency relationships tend not to predict collusion. The paper demonstrates that allowing collusion may be optimal if the principal cannot commit to an incentive scheme once and for all. The optimal extent of...

Empirical evidence shows that a weak currency attracts foreign direct investment. Current conventional wisdom says that all firms, regardless of their nationality, should be affected equally by changes in the exchange rate, and hence that there is no simple explanation for this regularity. I...

A recent legislative directive from the Commission of the European Community proposes and enactment of a Mandatory Bid Rule (MBR): a bidder trying to acquire control of a firm should be required to extend the offer for all shares of the firm. This paper analyzes how adoption of such a rule...

We study the long-run behavior of an economy where agents who are heterogeneous with respect to risk attitudes can either earn a certain income or enter a risky rent seeking contest. In contrast with standard evolutionary game theory, we distinguish between utility and material payoffs, and...

In this note the value of parametric changes in hazard rates is analyzed. Two different kinds of changes, sudden or 'blip' changes and persistent changes, respectively, are considered within a model in which both the marginal rate of time preference and the survival probability are...

A bivariate second-order VAR model of money growth and inflation is specified and estimatedby means of least squares. The bias of the parameter estimates is approximated in three ways and new, bias-reduced estimates are computed using the approximations. The effects of bias reduction on...