This paper considers an overlapping generations model in which capital investment is financed in a credit market with adverse selection. Lenders’ inability to commit ex-ante not to bailout ex-post, together with a wealthy position of entrepreneurs gives rise to the soft budget constraint...

This paper proposes a political economy explanation of bailouts to declining industries. A model of probabilistic voting is developed, in which two candidates compete for the vote of two groups of the society through tactical redistribution. We allow politicians to have core support groups they...

In parallel with the increasing availability of multiregional input-output (MRIO) tables, there has been a growing concern on IO modelling at lower levels of spatial disaggregation, to reflect the particular features of cities better. The urbanization process is one of the salient...