It has been suggested that interest-rate smoothing may be partly explained by an omitted variable that relates to conditions in financial markets. We propose an alternative interpretation that suggests that it relates to measurement errors in the output gap

Licensing is a widely used technique applied to impose regulations. Firms inducing harm must hold a license issued by a regulatory agency on a case-by-case basis. A firm may also be subject to liability. This paper studies the implications on social welfare of combining licensing with strict...

Regulation of waters to generate electricity contributes to two different, but related flood risks. A dam may break resulting in a catastrophic accident. “High flow” floods are less costly and occur when there are large amounts of rain falls in combination with filled reservoirs. Here, the...