Economic evaluation has an important role in helping to make decisionsabout the use of scarce resources in an explicit and rational manner, yeteconomic evaluation is not well-developed in many areas of socialwelfare. This paper looks at the reasons for this, focusing on whateconomists could do...

Following the implementation of the government’s fuel poverty strategy in 2001, Warm Front is expected to make a substantial contribution to reducing the number of fuel poor households – those unable to afford to heat their homes adequately1. This report focuses on the targeting of the...

It is increasingly recognised that improving the quality and quantity of children’s services isan essential part of any long-term strategy to tackle poverty and social exclusion amongchildren. As part of its wider programme to address child poverty in England, Save TheChildren commissioned...

A striking fact about pricing is the prevalence of \sales": large temporary price cuts followedby prices returning exactly to their former levels. This paper builds a macroeconomic modelwith a rationale for sales based on firms facing customers with different price sensitivities.Even if firms...

Market participants' risk attitudes, wealth and portfolio composition influence their positions in apegged foreign currency and, therefore, may have important effects on the sustainability of currencypegs. We analyze such effects in a global game model of currency crises with continuous...

This paper studies a dynamic model of crises with timing frictions that combines the mainaspects of Morris and Shin (1998) and Frankel and Pauzner (2000). The usual arguments forexistence and uniqueness of equilibrium cannot be applied. It is shown that the model has aunique equilibrium within...

This paper analyzes the trade-off between official liquidity provision and debtor moral hazard ininternational financial crises. In the model, crises are caused by the interaction of bad fundamentals,self-fulfilling runs and policies by three classes of optimizing agents: international...

In order to understand inefficient institutions, one needs to understand what mightcause the breakdown of a political version of the Coase Theorem. This paper considersan environment populated by ex-ante identical agents and develops a model of powerand distribution where institutions (the...

We empirically analyse the appropriateness of indexing emerging market sovereign debt to USreal interest rates. We find that policy-induced exogenous increases in US rates raise default riskin emerging market economies, as hypothesised in the theoretical literature. However, we also findevidence...

This paper analyses predictions of a simple model of currency crises in which the peg will beabandoned when the currency overvaluation hits a certain threshold, unknown to the agents. Due tolearning about the threshold, some features usually observed in the data and identified with modelswith...