The authors present a model in which a government's current capital-control policy signals future policies. Controls on capital outflows evolve in response to news on technology, conditional on government attitudes toward taxation of capital. When there is uncertainty over governmental types, a...

Recent contributions emphasize that the presence of exchange-rate target zones has important effects on the within-band behavior of exchange rates when agents are forward-looking. The authors find that the implications of available models are inconsistent with European exchange-rate data, and...

The authors propose and solve an optimizing model that explains counterintuitive effects of fiscal policy in terms of expectations. If government spending follows an upward-trending stochastic process that the public believes may fall sharply when it reaches specific "trigger" points, then...

In models of steady investment-driven growth, an individual's propensity to save depends on how much of his income is drawn from accumulated factors of production ('capital') rather than from nonaccumulated factors. When agents are heterogeneous in this respect, growth-oriented policies have...