This article analyzes the implications of money illusion for investor behavior and asset prices in a securities market economy with inflationary fluctuations. We provide a belief-based formulation of money illusion which accounts for the systematic mistakes in evaluating real and nominal...

This paper studies the potential impact on securities settlement systems (SSSs) of a major market disruption, caused by the default of the largest player. A multi-period, multi-security model with intraday credit is used to simulate direct and second round settlement failures triggered by the...

Price discrepancies, although at odds with mainstream finance, are persistent phenomena in financial markets. These apparent mispricings lead to the presence of ‘arbitrageurs’, who aim to exploit the resulting profit opportunities, but whose role remains controversial. This article...

This paper offers a unique quantitative evaluation of the distribution of the welfare of a water privatization experience in Mali among labor, investors, intermediate input providers, users and taxpayers. The assessment is based on indicator duality and production theory. The paper shows that...

This paper is an empirical study of the motives for charitable donations, based on a unique data set of the English National Opera. Merging all their box office and fundraising data, our data set not only contains individuals’ donations, but also their opera attendance and all the fringe...

This paper uses mortgage data to construct a measure of terms on which households access to external finance, and relates it to consumption at both the aggregate and cohort levels. The Household External Finance (HEF) index is based on the spread paid by risky borrowers in the mortgage market....

This paper documents a strong positive relationship between individual reported trust levels (obtained from the US General Social Survey) and the competitiveness of the sector in which an individual works (obtained from the US census of firms). This correlation is robust to the inclusion of all...

This paper provides evidence on household responses to the relaxation of one barrier constraining adoption of health practices - lack of information - in a resource constrained setting. It examines the effects of a randomized intervention in Malawi which provides mothers with information on...

We ask how much the advent of the `one child policy' can explain the sharp rise in China's household saving rate. In a life-cycle model with endogenous fertility, intergenerational transfers and human capital accumulation, we show a macroeconomic and a microeconomic channel through which...

We develop a theory of intergenerational transmission of preferences that rationalizes the choice between alternative parenting styles (as set out in Baumrind 1967). Parents maximize an objective function that combines Beckerian altruism and paternalism towards children. They can affect their...