This paper investigates the social preferences over labor market exibility, in a general equilibrium model of dynamic labor demand. We demonstrate that how the economy responds to productivity shocks depends on the power of labor to extract rents and on the status quo level of the firing cost....

This paper examines the structures behind competitive transformation in telecommunications. The analysis is based on qualitative evidence from Telefonica’s transformation since the mid-1980s and comparisons with BT, Orange, and Deutsche Telekom. Telecommunications is a critical industry...

We investigate how nondemocratic regimes use the military and how this can lead to the emergence of military dictatorships. Nondemocratic regimes need the use of force in order to remain in power, but this creates a political moral hazard problem; a strong military may not simply work as an...