Conventional economic analyses have not been successful in explaining differences in living arrangements and particularly the dramatic increase in the fraction of young adults living with their parents in Mediterranean Europe. This paper presents a cultural interpretation. I argue that the...

Borders are a man-made institution, and as such their shape cannot be taken as part of the physical landscape. The size of countries is endogenous to politico-economic forces. This paper discusses recent efforts by economists to study three related questions: What determines the evolution of the...

Fiscal policy is procyclical in many developing countries. We explain this policy failure with a political agency problem. Procyclicality is driven by voters who seek to "starve the Leviathan" to reduce political rents. Voters observe the state of the economy but not the rents appropriated by...

We use data on announced and actual exchange rate arrangements to ask which countries follow de facto regimes different from their de iure ones, that is, do not do what they say. Our results suggest that countries with poor institutional quality have difficulty in maintaining pegging and abandon...