I study long-term financial contracts between lenders and borrowers in the absence of perfect enforceability and when both parties are credit constrained. Borrowers repeatedly have projects to undertake and need external financing. Lenders can commit to contractual agreements whereas borrowers...

We instillate rational cognition and learning in "seemingly riskless" choices and judgments. Preferences and possibilities are given in a stochastic sense and based on revisable expectations. The theory predicts experimental preference reversals and passes a sharp econometric test of the status...

This paper develops a bargaining model of wage and employment determination for the public sector. The solution to the model generates structural wage and employment equations that are estimated using data from New York State teacher-school district collective bargaining agreements.

This paper studies the proposition that an inflation bias can arise in a setup where a central banker with asymmetric preferences targets the natural unemloyment rate.

Evidence of falling wages in Catholic cities and rising wages in Protestant cities between 1500 and 1750, during the spread of literady and the vernacular, is inconsistent with most theorretical models of economic growth. In the Protestant Ethic, Weber suggested an alternative explanation based...