An Equilibrium Model of Lawmaking

This paper embeds a model of lawmaking in an equilibrium framework in which the demand for trials is rationed by court delay. The lawmaking process depends on a combination of selective litigation, judicial bias, and precedent. The steady state equilibrium of the model determines both the length of delay and the distribution of legal rules. Comparative statics show that an increase in the supply of trials reduces delay but may or may not increase the proportion of efficient rules. An increase in the fraction of judges biased in favor of the efficient rule, however, will likely improve efficiency on both counts.

Existence and Uniqueness of Equilibrium in Nonoptimal Unbounded Infinite Horizon Economies

In applied work in macroeconomics and finance, nonoptimal infinite horizon economies are often studied in the the state space is unbounded. Important examples of such economies are single vector growth models with production externalities, valued fiat money, monopolistic competition, and/or distortionary government taxation. Although sufficient conditions for existence and uniqueness of Markovian equilibrium are well known for the compact state space case, no similar sufficient conditions exist for unbounded growth. This paper provides such a set of sufficient conditions, and also present a computational algorithm that will prove asymptotically consistent when computing Markovian equilibrium.