We develop a model where workers both choose their residential location (geographical space) and social interactions (social space). In equilibrium, we show under which condition the majority group resides close to the job center while the minority group lives far away from it. Even though the...

While most of the literature on the determination of real exchange rates is focused on the role of standard macroeconomic variables, there exists how- ever a few papers that are more concerned by the impact of factors which are usually considered to play a key role in the process of economic...

We build a workable game of common-property resource extraction under rational Bayesian learning about the reproduction prospects of a resource. We focus on Markov-perfect strate- gies under truthful revelation of beliefs. For reasonable initial conditions, exogenously shif- ting the prior...

We study how excessive debt-GDP ratios affect political sustainability of prudent fiscal policy in country members of a monetary union. We develop a model with free choice of distinct rent-seeking groups to cooperate (or not) in providing public goods, in seeking rents, and in austere debt...

This paper explores the role played by product variety and quality in a real business cycle model. Firms are heterogeneous in terms of their specific quality as well as pro- ductivity levels. Firms which have costly technology enter in a period of high aggregated demand and produce high quality...

Does population aging and the associated increase in the old-age dependency ratio affect economic growth ? The answer is given in a novel analytical framework that allows for population aging to affect endogenous capital- and labor-saving technical change. The short-run analysis reveals that...

Grade inflation or soft grading is acommon feature of the educational systems of many countries. In this paper I analyse grade inflation in a setting where students differ in social background, a firm decides its hiring strategy and the schools grading policy can be targeted according to student...

In this article we study the implication of thresholds in preferences. To model this we extend the basic model of John and Pecchenino (1994) by allowing the current level of environmental quality to have a discrete impact on how an agent trades off future consumption and environmental quality....

In our paper we show that when countries compete in taxes and infrastructures, coordination through a uniform tax rate or a minimum rate does not necessarily create the welfare effects observed under pure tax competition. The divergence is even worse when the competing jurisdictions differ in...

We provide empirical support and a theoretical explanation for the vicious circle of political corruption and tax evasion in which countries often fall into. We address this issue in the context of a model with two distinct groups of agents: citizens and politicians. Citizens decide the fraction...