Fiscal consolidation in the euro area: Long-run benefits and short-run costs

In this paper, we examine the macroeconomic effects of alternative fiscal consolidation policies in the New Area-Wide Model (NAWM), a two-country open-economy model of the euro area developed at the European Central Bank (cf. [Coenen, G., McAdam, P., Straub, R., in press. Tax reform and labour-market performance in the euro area: a simulation-based analysis using the New Area-Wide Model. Forthcoming in the Journal of Economic Dynamics and Control]). We model fiscal consolidation as a permanent reduction in the targeted government debt-to-output ratio and analyse both expenditure and revenue-based policies that are implemented by means of simple fiscal feedback rules. We find that fiscal consolidation has positive long-run effects on key macroeconomic aggregates such as output and consumption, notably when the resulting improvement in the budgetary position is used to lower distortionary taxes. At the same time, fiscal consolidation gives rise to noticeable short-run adjustment costs in contrast to what the literature on expansionary fiscal consolidations suggests. Moreover, depending on the fiscal instrument used, fiscal consolidation may have pronounced distributional effects.     

Cooperation,stability and social welfare under majority rule

We resolve collective irrationality in the stability set, a solution concept for voting games proposed by Rubinstein (J Econ Theory 23:150–159, 1980) to resolve the well-known paradox of voting in the core. A lack of cooperation within winning coalitions prevents their members from eliminating an alternative globally less preferred to another one when they observe the rational behavior defining the stability set. Allowing for the possibility of accompanying a coalitional vote with a binding solidarity agreement is a natural response to this cooperation failure. This leads to a new standard of behavior and a new solution concept called stability set with binding solidarity agreement or S _c -stability set. It is shown that the S _c -stability set and a newly defined version of the Mas-Colell bargaining set for simple games are not comparable with respect to set inclusion. The S _c -stability set includes the core, is included in the stability set and contains only Pareto-optimal alternatives. When individual preferences are complete linear orders, the S _c -stability set is always non-empty.      

Persuasion,binary choice,and the costs of dishonesty

We study the strategic interaction between a decision maker who needs to take a binary decision but is uncertain about relevant facts and an informed expert who can send a message to the decision maker but has a preference over the decision. We show that the probability that the expert can persuade the decision maker to take the expert’s preferred decision is a hump-shaped function of his costs of sending dishonest messages.     

Manufactured regional crises: The Middle East and North Africa under global food regimes

The current agrarian and food crisis in the Middle East and North Africa (MENA) has been interpreted through a number of tropes. Within the dominant mainstream discourse, the MENA region is often depicted as a homogenous geographical area characterized by dryness, infertile lands and poor water resources. How did imperialism, colonialism and the Cold War influence the MENA food systems? What were the effects of trade liberalization and neoliberalism on the agricultural systems in the region? These are some questions that this paper will try to answer using a geographical and historical-comparative analysis, through a food regimes lens. Understanding contemporary social relations dynamics cannot be limited to the recent period. Agriculture and food in the MENA region are anchored in the history of power relations ruled by flows of capital and the shaping of ecological transformations during the longue durée of capitalism and its corresponding modes of control and regulation.     

Aggregate Information and Organizational Structures*

We study information flows in an organization with a top management (principal) and multiple subunits (agents) with private information that determines the organization's overall efficiency. Under centralized communication, eliciting the agents' information may induce the principal to manipulate aggregate information, which obstructs an effective use of information. Under hierarchical communication, the principal concedes more information rent due to loss of control, but is able to use the agents' information more effectively. The trade-off between the organizational structures depends on the likelihood that the agents are efficient. Centralized communication is optimal when such likelihood is low. Hierarchical communication, by contrast, is optimal when it is high.     

Technological changes in the era of digitalization: What do collective agreements tell us?

Unionized organizations are implementing more than ever technological changes to cope with an increasingly changing and highly digital environment. Despite the extensive literature on union responses to changes, there is not much evidence on how unions and employers draft provisions pertaining to technological changes in collective agreements. Therefore, this paper aims to conduct an in-depth analysis of these provisions in over 500 collective agreements signed between 2000 and 2020. Specifically, this study focuses on office workers in two of the most important Canadian industries, namely, the healthcare and manufacturing sectors. The findings indicate that within the examined provisions, the regulation of technological change varies along a continuum that extends from no obligations to stringent obligations on the part of the employer. Moreover, the results show that these provisions have remained stable over the past two decades.     

Group cooperation of village officials in Chinese rural resettlement: A lab in the field

We examine decisions made by village officials in a public goods game and their impact on villagers' attitudes toward a resettlement project in seven rural villages in China. The data comes from two sources: (i) a laboratory experiment with village officials, and (ii) a survey of villagers. Villages whose officials exhibited more cooperative behavior in the laboratory reported higher support levels from the villagers. We find that teams with higher average contribution levels in the PGG game relayed the resettlement news to their villagers earlier than other teams and also possess greater altruistic preferences.     

Feature-weighted categorized play across symmetric games

Experimental Economics - Experimental game theory studies the behavior of agents who face a stream of one-shot games as a form of learning. Most literature focuses on a single recurring identical...