Bassetto, Marco;
Huo, Zhen;
Ríos-Rull, José-Víctor;
(2024)
Institution Building without Commitment.
American Economic Review
, 114
(11)
pp. 3427-3468.
10.1257/aer.20201365.
Preview |
Text
manuscript_Dec_31_2023.pdf - Accepted Version Download (1MB) | Preview |
Abstract
We propose a theory of gradualism in the implementation of good policies, suitable for environments featuring time consistency. We downplay the role of the initial period by allowing agents both to wait for future agents to start equilibrium play and to restart the equilibrium by ignoring past history. The allocation gradually transits toward one that weighs both short- and long-term concerns, stopping short of the Ramsey outcome but greatly improving upon Markovian equilibria. We use the theory to account for the slow emergence of both climate policies and the reduction of global tariff rates. (JEL C73, E21, E61, F13, H30)
| Type: | Article |
|---|---|
| Title: | Institution Building without Commitment |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1257/aer.20201365 |
| Publisher version: | https://doi.org/10.1257/aer.20201365 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher's terms and conditions. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10213867 |
Archive Staff Only
 |
View Item |
