Standard target zone exchange rate models are based on nonlinear functions of an unobserved economic fundamental, which is assumed to be bounded, similarly to the target zone exchange rates themselves. A violation of this key assumption is a basic...

attention in the literature. This paper provides a Hicks-Slutsky decomposition of the effect of Rothschild-Stiglitz increases in risk on the optimal decision. Two measures of aversion to additional risk are introduced. Their behavior is shown to control...

We show under very parsimonious assumptions that FGLS and GLS are asymptotically equivalent when errors follow an invertible MA(1) process. Although the linear regression model with MA errors has been studied for many ...

Jeremy I. Bulow and Paul D. Klemperer (AER, 1996) argue that the usual concerns of auction design miss the big picture, and show that a simple English auction without a reserve price and N + 1 bidders attains expected ...

informationally-demanding way to ensure efficient make-or-buy decisions is to price inputs at marginal cost. The extent to which input prices can depart from marginal cost while still inducing efficient make-or-buy decisions depends on the relative efficiency...

Recent empirical research has established that the distributions of a wide range of economic variables are kurtotic in that they have higher peak(s) in the neighborhood of the mean and greater elongation in the tails than the normal distribution...

Conditional Markov chain models of observed aggregate share-type data have been used by economic researchers for several years, but the classes of models commonly used in practice are often criticized as being purely ad ...

Recent papers suggest that when intermediation is analyzed seriously, the Friedman rule does not maximize social welfare in overlapping generations model in which money is valued because of spatial separation and limited communication. These papers...

We propose a new explanation for the observed difference in the cost of intraday and overnight liquidity. We argue that the low cost of intraday liquidity is an application of the Friedman rule in an environment where a ...

The adverse-selection literature has only considered the case in which competing sellers' costs of supply are independent and privately known by the individual sellers. In contrast, the auction literature has ignored adverse ...

clustered standard errors as a more straightforward, feasible approach, especially when working with large datasets or many cross-level interactions, our purpose in this Practical Researcher piece is to draw attention to the issue of clustering in state...

There is substantial research effort devoted to identifying a sufficient statistic for monetary policy. The purpose of this paper is to broaden the scope of the on-going investigation along three dimensions. First, we follow up the Rudebusch...

We exploit the existence of substantial variation in state policies toward public health insurance for children between 1990 and 2002 to estimate the economic and political determinants of state eligibility levels. Controlling for state and year...

We test whether religious affiliation and participation in religious services are associated with behavior in public goods and trust games. Overall, religious affiliation is unrelated to individual behavior. However, we ...

. In this paper, I extend the analysis of panic-based runs to include an asymmetric-information, extrinsic randomizing device. Depositors observe different, but correlated, signals on the stability of the bank. I find that if the signals that depositors obtain...

Parametric stochastic frontier models have a long history in applied production economics, but the class of tractible parametric models is relatively small. Consequently, researchers have recently considered non-parametric alternatives...

If a inflation tax base has been created via a fixed reserve requirement, will a benevolent government use the inflation tax as a (partial) source of revenue even though a non-distortionary revenue source is available? ...

Although the Internet reduces market frictions by making it easier for consumers to obtain information about prices and product offerings, goods sold by electronic firms are not perfect substitutes for otherwise identical ...

Several non-experimental studies report that income inequality and other forms of population-based heterogeneity reduce levels of trust in society. However, recent work by Glaeser et al. (2000) calls into question the reliability of widely used...

We test the conventional wisdom that political ideology is associated with generosity or compassion by comparing the behavior of experimental subjects in public goods or trust games. We find that self-described liberals ...