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Scholars have called for the Carnegie School to revisit fundamental ideas such as decision, behavioral plausibility (Gavetti, Levinthal, & Ocasio, 2007, p. 531), and the individual (Cohen, 2007). In essence, these calls urge greater realism, beyond the School’s founding concepts such as...
Persistent link: https://www.econbiz.de/10011039734
The concept of bounded rationality has been at the forefront of a recent empiricist program in economics which under the heading of ‘behavioral economics ‘ seeks to broaden the rational choice paradigm in the direction of psychology, to the neglect of a similar broadening in the direction of...
Persistent link: https://www.econbiz.de/10005418889
Building on Blinder and Wyplosz (2005) this paper presents a formal mechanism which potentially explains how autocratically collegiate, genuinely collegiate and individualistic monetary policy committees (MPCs) are able to reach a consensus. Drawing on the theory of Markov chains, I adopt a...
Persistent link: https://www.econbiz.de/10005748064
It is well known that the standard search and matching model with Rational Expectations (RE) is unable to generate amplification in unemployment and vacancies. We show that relaxing the RE assumption has the potential to provide a solution to this well known unemployment volatility puzzle. A...
Persistent link: https://www.econbiz.de/10010894330
Persistent link: https://www.econbiz.de/10005674351
Longevity risk has become a major challenge for governments, individuals, and annuity providers in most countries, and especially its aggregate form, i.e. the risk of unsystematic changes to general mortality patterns, bears a large potential for accumulative losses for insurers. As obvious risk...
Persistent link: https://www.econbiz.de/10005077852
The optimal reaction to a pending climate catastrophe is to accumulate capital to be better prepared for the disaster and levy a carbon tax to reduce the risk of the hazard by curbing global warming. The optimal carbon tax consists of the present value of marginal damages, the non-marginal...
Persistent link: https://www.econbiz.de/10010720427
The optimal reaction to a pending climate catastrophe is to accumulate capital to be better prepared for the disaster and levy a carbon tax to reduce the risk of the hazard by curbing global warming. The optimal carbon tax consists of the present value of marginal damages, the non-marginal...
Persistent link: https://www.econbiz.de/10011161252
The optimal reaction to a productivity shock which becomes more imminent with global warming is to price carbon (proportional to the marginal hazard of a catastrophe) to curb the risk of climate change, but also to accumulate precautionary capital to facilitate smoothing of consumption and curb...
Persistent link: https://www.econbiz.de/10011196453
The optimal reaction to a pending productivity shock of which the expected arrival time increases with global warming is to accumulate more precautionary capital to smooth consumption and to levy a carbon tax, proportional to the marginal hazard of a catastrophe, to curb the risk of climate...
Persistent link: https://www.econbiz.de/10011084431