The paper analyzes a political accountability game with an electorate of 'partisan' and 'independent' voters. It is shown that politicians have a strategic incentive to engage in 'divisive politics', that is, to force some independent voters to take sides, even if the direct electoral benefits...

An agreement about a lower bound for admissible tax rates can reduce the equilibrium tax rate (and thus welfare) in tax competition among fully symmetric countries. This is shown in an infinitely repeated game where the stage game describes the standard tax competition model with source-based...

Regional unemployment and non-participation rates are higher, more disperse, and more stable in Europe than in the U.S. This paper helps understand what may cause this phenomenon. Specifically, it looks at the role of migration in regional differences. I analyze the adjustment mechanisms of...

The transformed-data maximum likelihood estimation (MLE) method for struc- tural credit risk models developed by Duan (1994) is extended to account for the fact that observed equity prices may have been contaminated by trading noises. With the presence of trading noises, the likelihood function...

Emerging economies in the CEE/NIS region – faced with a number of similar or same challenges when trying to find their new role in the changing international settings, while still characterised by their own distinct level of socio-economic development, set of institutions, culture and norms...

This paper explores the evolution of rural policies in EU, making some comparisons with CEE rurality. In the first chapter I explore some theoretical concepts on how policies are transferred from one country to another, what a policy paradigm means and how it might change over time with special...

This case study is a part of a research project dealing with the post socialist market evolution. Companies with majority foreign ownership are very rare on the market of foreign language services in Hungary. Import competition is negligible on this market as well. One curious feature of this...

The current downturn in the American and Western European economies, combined with increasing regulatory pressure on private equity throughout the developed world, made emerging markets an attractive destination for private equity. As part of the emerging markets, Central and Eastern Europe's...

The paper presents an endogenous growth economy with a representation of the tax rate system in the Baltic countries. Assuming that government spending is a given fraction of output, the papershows how a flat tax system balanced between labor and corporate tax rates can be second best optimal....

We show the importance of a dynamic aggregation bias in accounting for the PPP puzzle. We prove that established time series and panel methods substantially exaggerate the persistence of real exchange rates because of heterogeneity in the dynamics of disaggregated relative prices. When...