“rules of the game”) are set to maximize payoffs of those individuals in power. They are constrained by the threat of rebellion, where any rebels would be similarly constrained by further threats. Equilibrium institutions are the fixed point of this constrained maximization problem. This model can

, such as the ongoing restructuring from manufacturing to the service industry, adoption of new information technologies and a rapidly changing international economy. We use a general equilibrium search model where workers accumulate skills on the job and lose skills during unemployment. Ljungqvist: Stockholm School

;critical junctures" and on "policy feedbacks," the article proposes a way of thinking about institutional evolution and path dependency that provides an alternative to equilibrium and other approaches that separate the analysis of institutional stability from that of institutional change.

section of interest rates at any given time but neglects time-series dynamics, nor the equilibrium approach, which focuses on time-series dynamics (primarily those of the instantaneous rate) but pays comparatively little attention to fitting the entire cross section at any given time and has been shown

price with institutional investors and with naive traders

cannot be illiquid. This paper provides a possible theoretical foundation for rescuing Bagehot’s view. Our theory does not rely on the multiplicity of equilibria that arises in classical models of bank runs. We build a model of banks’ liquidity crises that possesses a unique Bayesian equilibrium

These notes are based on the expository lectures given at the Indian Institute of

ABSTRACT What Makes Investors Trade? A unique data set allows us to monitor the buys, sells, and holds of individuals and institutions in the Finnish stock market on a daily basis. With this data set, we employ Logit regressions to identify the determinants of buying and selling activity over a

Ashlea Rundlett, Kelly Senters, and Wei Zhong for editorial and research assistance.

In the area of legislative choice, social choice theorists have focused on the equilibrium properties of pure majority rule (PMR), operating according to the implicit belief that whatever is true about the PMR mechanism also applies to institutions based upon it. This view has encouraged the study