This paper reviews the evidence on the effects of recessions on potential output. In contrast to the assumption in mainstream macroeconomic models that economic °uctuations do not change potential output paths, the evidence is that they do in the case of recessions. A model is proposed to...

This paper reviews the evidence on the effects of recessions on potential output. In contrast to the assumption in mainstream macroeconomic models that economic fluctuations do not change potential output paths, the evidence is that they do in the case of recessions. A model is proposed to...

Two fundamental problems in economic analysis concern the deter mination of aggregate output, and the determination of market prices and quantities. The way economic adjustments are made at the micro level suggests that the history of shocks to the economic environment matters. This paper...

This paper develops a typology of different behaviors that might be viewed as outrageous by a jury and subjected to punitive damages. The paper derives the level of punitive damages for achieving economic efficiency in four different situation - malice and three settings where a jury might find...