VIENNA JOINT ECONOMICS SEMINAR	INVITATION
R E M I N D E R The University of Vienna and the Department of Economics and Finance at the Institute for Advanced Studies cordially invite you to the following Vienna Joint Economics Seminar Thursday, December 10, 2015 Attention – New Address Institute for Advanced Studies Josefstädter Straße 39, 1080 Vienna Lecture Room E02, ground floor 4:00 pm Bård Harstad and                 Zeno Enders U Oslo                                                        University of Heidelberg The political economy of weak treaties (Bård Harstad ) Abstract: Democratic countries sign a large number of international treaties, but most of them are weakly enforced and without explicit sanctions on noncompliers. This paper analyses a simple model where a political incumbent can negotiate an international treaty before a new election. The treaty is also specifying the sanction that will be executed if the next election winner does not comply with the agreement (e.g., to cut emissions). In the model, the first best is always either no treaty or a strong treaty (with an effective sanction). Nevertheless, every incumbent maximizes the reelection probability by signing a weak treaty, i.e., a treaty that will be complied to if and only if the next policymaker is relatively "green". If the incumbent is green, the equilibrium treaty will specify the largest sanction such that the "brown" party will not comply; if the incumbent is brown, the treaty will specify the smallest sanction such that the green party will comply. Furthermore, countries will rely too much on green technology, and the treaties tend to be too large in scope. paper jointly with Marco Battaglini and Growth expectations, undue optimism, and short-run fluctuations (Zeno Enders) Abstract: We assess the contribution of "undue optimism" (Pigou) to business-cycle fluctuations. In our analysis, optimism (or pessimism) pertains to total factor productivity which determines long-run economic activity. We develop a new strategy to estimate the effects of optimism shocks|autonomous, but fundamentally unwarranted changes in the assessment of productivity. Specifically, we show that by including survey-based nowcast errors regarding current output growth in a VAR model, it is possible to identify optimism shocks. These shocks, in line with theory, generate negative nowcast errors, but raise economic activity in the short run. They account for about 20 percent of short-run fluctuations. paper jointly with Michael Kleemann and Gernot J. Müller We are looking forward to seeing you! Institute for Advanced Studies Department of Economics and Finance Josefstädter Straße 39, 1080 Vienna, Austria Tel.: +43 1 599 91 145 e-Mail: economics@ihs.ac.at http://economics.ihs.ac.at		LINKS DIRECTIONS TO IHS on Google maps VIENNA JOINT ECONOMICS SEMINAR on Google calendar ECONOMICS SEMINARS IN VIENNA on Google calendar
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