The authors develop and estimate an equilibrium-based model of the Canadian term structure of interest rates. The proposed model incorporates a vector-autoregression description of key macroeconomic dynamics and links them to those of the term structure, where identifying restrictions are based...

This paper surveys recent developments in the theory of option pricing. The emphasis is on the interplay between option prices and investors' impatience and their aversion to risk. The traditional view, steeped in the risk-neutral approach to derivative pricing, has been that these preferences...

We extend the macroeconomic literature on -type rules by introducing infrequent information in a kinked adjustment-cost model. We first show that optimal individual decision rules are both state and time dependent. We then develop an aggregation framework to study the macroeconomic implications...

In this paper we examine the setting of optimal legal standards to simultaneously induce parties to invest in care and to motivate law enforcers to detect violators of the law. The strategic interaction between care providers and law enforcers determines the degree of efficiency achieved by the...

The author first presents three different facets of leader-follower structures that could be introduced in formal theoretical growth models to make explicit the process by which followers may be able to catch up with leaders. He then stresses the need for models with multiple final goods,...

The use of false regular prices is a major case of misleading advertisement in what seems to be quite competitive markets. The authors construct a competitive model with rational expectations in which such misleading advertising emerges. They assume that there is competition locally, but that...

The authors analyze the strategic pricing and informative advertising decisions made by firms in duopolistic contexts. They show that, whether the products are substitutes or complements, there exist strategic settings in which firms keep potential consumers uninformed about their products even...