This paper analyzes the design of optimal unemployment insurance in a search equilibrium framework where search effort among the unemployed is not perfectly observable. We examine to what extent the optimal policy involves monitoring of search effort and benefit sanctions if observed search is...

A set of necessary and sufficient conditions for convexity of a transferable utility game in terms of its decomposition into unanimity games is shown to be minimal: none of the conditions is redundant. The result is used to provide an axiomatization of the Shapley value on the set of convex games.

This paper studies a model of how political parties use resources for campaigning to inform voters. We show existence of equilibrium under mild assumptions for an arbitrary number of parties. The main result is that if the parties are more extreme, then they spend less resources on campaigning...

In this paper I investigate to what extent firm-specific uncertainty affects the gain from indexation. Earlier studies have tried to explain wage rigidity by arguing that insiders face little layoff risk due to employment fluctuations caused by aggregate shocks. However, this analysis abstracts...

This paper addresses transboundary environmental problems in the context of an optimal tax problem, when part of the labor force is mobile across countries. The policy instruments include both commodity taxation and nonlinear income taxation. We show how the tax policy in a noncooperative...

While examining the macroeconomic effects of increased government control of the informal sector, this paper develops a two-sector general equilibrium model featuring matching frictions, and heterogeneous workers in terms of moral. This facilitates an analysis of how wage setting and...

The paper examines policy externalities between imperfectly competitive open economies where unemployment prevails in general equilibrium. We develop a two-country and two-sector model with monopolistic competition in the goods market and wage bargaining in the labor market. Policy externalities...

This is a theoretical study of human-capital accumulation, where parental, as well as public investments are essential. Policy influence rich and poor parents differently when they make educational decisions. Rich parents allocate resources efficiently between physical bequests and educational...

Micro simulation involves modeling the behavior of individuals and other decision units taking into account the effects of policy parameters such as tax rates, eligibility rules for benefits and subsidies and compensation rates in the social security system. The model is simulated to analyze the...

This paper addresses optimal taxation, when the relationship between consumption and environmental damage is uncertain and treated as a random variable by policy makers. The main purpose is to analyze how additional uncertainty about this relationship affects the optimal unit tax on the...