This paper investigates, in a simplified macro context, the joint determination of the (incorrect) perceived model and the equilibrium. I assume that the model is designed by a self-interested economist who knows the true structural model, but reports a distorted one so as to influence outcomes....

The contemporary approach to political economy is built around vested interests -- elites, lobbies, and rent-seeking groups which get their way at the expense of the general public. The role of ideas in shaping those interests is typically ignored or downplayed. Yet each of the three components...

This paper develops the building blocks for a legal theory of finance. LTF holds that financial markets are legally constructed and as such occupy an essentially hybrid place between state and market, public and private. At the same time, financial markets exhibit dynamics that frequently put...

Despite restrictive migration policies, large numbers of undocumented migrants reside in many destination countries. If official migration targets are not enforced, why are they devised? To address this puzzle, we develop a political agency model with uncertainty on the migrants' supply, where...

This paper studies the trade-offs that an expert with ideological biases faces in designing his model. I assume the perceived model must be autocoherent, in that its use by all agents delivers a self-concerming equilibrium. The exercise is carried in the context of a simplified AS-AD model,...

This paper analyses the pattern of state aids to the manufacturing sector in ten EC countries for the period 1981--90. It focuses on determinants suggested by the political economy of state aids. We estimate a regression model where the intensity of state aids is accounted for by the weakness of...

We develop a model in which special interest groups make political contributions in order to influence an incumbent government's choice of trade policy. In the political equilibrium, the interest groups bid for protection, and each group's offer is optimal given the offers of the others. The...

The Maastricht transition strategy towards monetary union is based on the idea that the transition strategy should be gradual, and that entry into the union should be conditional on the fulfilment of convergence criteria. It is argued in this paper that this approach is not based on an economic...

This paper uses a country-level panel dataset to test the hypothesis that the United States biases its human rights reports of countries based on the latters’ strategic value. We use the difference between the U.S. State Department’s and Amnesty International’s reports as a measure of U.S....

This paper addresses two questions: (1) Is a twelve-country monetary union in Europe feasible? (2) Can monetary union be achieved in stages, i.e. with an initial group of countries going first, and later admitting the others? After examining several politico-economic arguments concerning...