This paper develops a model where voters trade-off two different motives when deciding how to vote: they care about current decision-making (they are “strategic”), but they also care about communicating their views about their most-preferred candidate so as to influence future elections, by influencing other voters' opinion and/or party positioning. In effect, voters in this model are intermediate between “strategic” and “sincere” voters of conventional models in elections with more than 2 candidates. This allows us to better investigate the relative efficiency of various electoral systems: our main conclusion is that since voting is used as a communication device electoral systems should be designed to facilitate efficient communication, e.g. by opting for 2-round systems rather than 1-round systems.

With decreasing returns and first-best credit, the long-run interest rate and aggregate output are uniquely determined, and wealth dispersion among individuals or firms is irrelevant. Introducing credit rationing into the Solow model modifies these conclusions. Multiple stationary interest rates and wealth distributions can exist because higher initial rates can be self-reinforcing through higher credit rationing and lower capital accumulation. The wealth accumulation process is ergodic in every steady state, but wealth mobility is lower with higher steady-state interest rates. Aggregate output is higher in steady states with lower interest rates because credit is better allocated. Short-run interest rate or distribution shocks can be self-sustaining and can have long-run effects on output through the induced dynamics of the wealth distribution and credit rationing.