The Lisbon strategy of the year 2000 failed: the share of R&D spending in Europe remains below the 3 percent of GDP target, far behind that of the US and China. EU companies spend much less on R&D than their US peers and concentrate their innovation activities on midtech instead high-tech...

Traditional banking is built on four pillars: SME lending, insured deposit taking, access to lender of last resort, and prudential supervision. This paper unveils the logic of the quadrilogy by showing that it emerges naturally as an equilibrium outcome in a game between banks and the...

Undoubtedly one of the best economists of his generation, Emmanuel Farhi transformed the theories of taxation, macroeconomics, and international finance. This essay describes his itinerary and his research style and attempts to pay tribute to his immense contribution to economics

This paper develops a theory of the allocation of formal and real authority within organizations. Real authority is determined by the structure of information, which in turn depends on the allocation of formal authority. An increase in an agent's real authority promotes initiative but results in...

The paper's main contribution is to provide a rationale for advocacy. After observing that many organizations (corporations, judiciary, and the executive and legislative branches of government) use competition among enfranchised advocates of special interests to improve policy making, it argues...