Making Subsidies Work: Rules vs. Discretion

Rules Versus Discretion : Making a Monetary Rule Operational

The auesllon of whether monetary pollcy should be conducled by mles known In advance lo all w by potlcymaker dlscrerm IS an endurlng debate This Daoer traces the evolul~on of rule advocacy from the time of the Federal Reserve Act and examlnes the problems asscc~ated w ~ l h mak~ng a rule operat~onal The author cmcludes that some degree of dlscrellon may be necessary and lhal 11 IS uselul to ana...

Discretion, Rules, and Volatility

E conomic models with multiple equilib-ria, such as Diamond and Dybvig (1983), have become increasingly useful in analyzing volatility in financial markets and in business cycles. In many of these models, indeterminacy is a result of incomplete financial markets or technological nonconvexities. Here we identify economic policy discretion to be another distinct cause of indeterminate equilibrium...

Simple rules for making alliances work.

Corporate alliances are growing in number--by about 25% a year--and account for up to a third of revenues and value at many companies. Yet some 60% to 70% of them fail. What is going wrong? Because alliances involve interdependence between companies that may be competitors and may also have vastly different operating styles and cultures, they demand more care and handling than other business ar...

Discretion, Productivity and Work Satisfaction

In Bartling, Fehr and Schmidt (2012) we show theoretically and experimentally that it is optimal to grant discretion to workers if (i) discretion increases productivity, (ii) workers can be screened by past performance, (iii) some workers reciprocate high wages with high effort and (iv) employers pay high wages leaving rents to their workers. In this paper we show experimentally that the produc...

Rules vs. Discretion: Public and Private Funding in Zambian Basic Education Part I: Funding Equity