We augment the canonical neoclassical model of trade to allow for interstate disputes over land, oil, water, or other resources. Different trade regimes imply different costs of such disputes in terms of arming. Depending on world prices, free trade can intensify arming to such an extent that...

This paper investigates the information content of the federal funds rate relative to other market interest rates. The empirical results indicate that the federal funds rate is not informationally superior to the overnight repurchase rate or the three-month T-bill rate. Unanticipated changes in...

This paper analyzes a multiperiod monetary targeting procedure as a possible resolution to the credibility problem in pol icy when the monetary authority has some private information. By limitin g the degree of flexibility permitted in policy, this procedure mitiga tes the credibility problem....

This paper explores the interactions between domestic politics and international conflict. The analysis shows that electoral uncertainty associated with competition between political parties, each representing a specific group of the electorate, imparts a negative 'bias' on the nation's military...

To develop a positive, economic theory of military spending, this analysis focuses on a game-theoretic, general equilibrium model of international conflict, in which consumption, peaceful investment, and military spending are endogenously determined. The analysis illustrates that when there is...