A politico-economic model is developed in which rationally-formed forecasts are available to all traders. Systematic government policy is neutral, but a large majority of the electorate, those who adopt rationally formed forecasts, but do not know the model, hold the government responsible for...

This paper extends M. L. Weitzman's analysis of share contracts. Firstly, a second variable input is introduced into a firm's production technology. Some share contracts give the firm an incentive to reduce worker compensation by manipulating the second variable input. This implies that...