We analyze development trajectories of early civilizations where population size and technology are endogenous, and derive conditions under which such societies optimally “switch” from anarchy to hierarchy – when it is optimal to elect and support a ruler. The ruler provides an efficient...

The choice facing an entrepreneur between issuing A-shares or B-shares to outside investors is studied. If the entrepreneur issues A-shares, control goes to the outside investors, whereas if the entrepreneur issues B-shares, he remains in control. Assuming no renegotiation at the point in time...

We analyze the effects of simple stylized economic policy rules, or stabilization principles, when fluctuations in economic activity are created endogenously by self_fulfilling volatile expectations. We study a simple monetary competitive model with intertemporally optimizing agents and a...

Wages in traditional agrarian societies are often observed to be above reservation wages even in the slack season when markets are in a state of excess labour supply. Models of non-cooperative wage setting by landlords which explicitly take account of the costs of supervising hired labour and...

The principal distinction between classical inference and Bayesian inference lies in terms of the definitions of probability. The classical inference is based on the notion of 'objective' probability, i.e. probability with reference to repetitive phenomena or relative frequencies in repeated...

The paper is concerned with the implications of imperfect competition and endogenous determination of the number of firms for endogenous fluctuations in the simple overlapping generations model. If firms have market power on output markets and there is free entry, such that the number of firms...

Data from a recent Tanzanian household survey are used to investigate households’ connectedness to market economy i.e. commercialisation. The study puts emphasis on facilitating access to the nearest markets and market information as means to enhance commercialisation. Commercialisation and...

In this paper we consider a model where agents optimize intertemporally and in which there is imperfect competition in the market for consumer goods. The labor market is one of perfect competition and there is exogenous labor supply. In other factor markets there may or may not be imperfect...

We develop a simple model of short- and long-term unemployment to study how labor market institutions interact with labor market conditions and personal characteristics of the unemployed. We analyze how the decision to exit unemployment and to mitigate human capital degradation by retraining...