Leo Hurwicz is the father of mechanism design theory and has inspired much of my work, and Roger Myerson is an old friend and collaborator and a tremendous economist.
A contingent bailout policy - implicit or explicit - must be coupled with some regulation of what banks can and cannot do. For example, a ban on lending to uncreditworthy customers might well make sense.
I choose questions to work on according to how much they excite me.
There are some things that we value as a public good that the markets can't deliver, like clean air.
There is universal consensus among experts that the earth's atmosphere is heating up - and that we are responsible for it by putting carbon dioxide in the atmosphere. We also know that the consequences of global warming are catastrophic. But how do we make sure that all countries reduce greenhouse gases?
What we mean by an outcome will naturally depend on the context. Thus, for a government charged with delivering public goods, an outcome will consist of the quantities provided of such goods as intercity highways, national defense and security, environmental protection, and public education together with the arrangements by which they are financed.