This book offers original economic analyses on the economy-environment relationship in Eastern and Central Europe. Drawing on the Hungarian experience, it provides empirical evidence on the reform of environmental policy which can be applicable to similar problems in other transition economies....

This article analyzes the impact of stochastic skill-biased technological change on earnings inequality in a general equilibrium OLG model. Wage dispersion is determined by the heterogeneity of skills by allowing for productivity differences due to education, ability, and age. The model performs...

In this paper, we describe the properties of the optimal allocation of consumption in a world with moral hazard and hidden borrowing and lending. We discuss how and under what conditions the efficient allocation can be distinguished from that of the permanent income (self-insurance) model. We...

This paper endogenizes the borrowing constraints on capital in a production economy with incomplete markets. We find that these limits get looser with income, a property that is consistent with US data on credit limits. The framework with endogenous limits is then used to study the effects of a...

We provide sufficient conditions for the validity of the first-order approach for two-period dynamic moral hazard problems where the agent can save and borrow secretly. The first-order approach is valid if the following conditions hold: (i) the agent has non-increasing absolute risk aversion...