Economic policies rely on demographic projections. Yet in making these projections, researchers often ignore the aspect of household formation�despite sustained trends in many industrialized countries towards smaller household units with fewer members. Over the long term, this trend is likely to reduce the benefits of sharing goods/ services within households (household economies of scale)…

This article examines whether access to modern information technologies, in particular the Internet, has an impact on individual positionality�the degree to which subjective well-being is affected by concerns about relative status and material aspirations. We provide empirical evidence that positionality and Internet access are intertwined. Exploiting variation over time in a panel of Euro…

This article provides new evidence on heterogeneity in the impact of health shocks by using register-based data on the entire population of Swedish workers. We formulate a difference-in-difference design, where we compare the change in labour earnings across matched workers with a high and low level of education who experience the same type of health shocks. Our results suggest major heterogene…

We show that armed conflict in Uganda affects social capital as measured by trust and associational membership. Relying on three rounds of nationally representative individual-level data bracketing a large number of violent events, we find that selfreported generalized trust and associational membership decreased during the conflict in districts in which violent events took place. But we also …

In this article we analyse the relationship between uncertainty and economic activity. For this purpose, we use a firm-level panel data set from Turkey to form proxies for uncertainty by using expectation errors of firms about their production volumes. The identifying assumption is that the probability of making an expectation error increases when the uncertainty faced increases. An analysis o…

This article employs a Bayesian methodology to measure the uncertainty involved in the long-run holding of the purchasing power parity (PPP) and in the half-life (HL) of deviations from it. Our Bayesian approach combines estimates obtained from ARMA, ARFIMA, and ARIMA specifications so that it is able to take into account model uncertainty. Exact posterior distributions corresponding to all the…

Has inflation targeting (IT) conferred benefits in terms of economic growth on countries that followed this particular monetary policy strategy during the crisis period 2007�13? We answer this question in the affirmative. Countries with an IT monetary regime weathered the crisis much better than did countries with other monetary regimes, particularly countries with fixed exchange rates.

This article explores the optimal privatization policy for industries with network externalities in consumption, such as the telecommunications industry. The optimal degree of privatization depends crucially on the scale of network externality, the degree of compatibility (which, in the telecommunications industry, corresponds to the level of standardization that facilitates compatibility acro…

This article clarifies the reasons for the recent rapid growth of foreign direct investment (FDI) in developing countries, particularly Asian countries. For this purpose, we theoretically and empirically examine the mechanics of both horizontal FDI and vertical FDI (VFDI) to shed light on the role of trade costs. Our empirical analysis using a logit or multinomial logit model of Japanese firms�…

This article incorporates tax evasion and sales tax rebates to consumers into Ramsey�s optimal taxation problem. Consumers may act as tax enforcers by requesting sales receipts, forcing firms to remit taxes to the government. Consumer auditing is costly, and the government offers buyers a tax rebate. This policy modifies the traditional �Ramsey equation� due to a non-trivial inco…