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Financial repression entails an implicit taxation on savings. When effective income-tax rates are very uneven, as common in developing countries, raising some government revenue through mild financial repression can be more efficient than collecting income tax only.

A model is build to study when the firm will share the information (open the books) regarding the true state of its profit with the workers. It is shown that when book-opening is allowed, strikes cannot be an equilibrium outcome. It is argued that the pure strategy of always opening the books is adopted only because the firm fails to credibly commit itself to a mixed strategy.

This paper introduces liquidation decisions into the standard principal-agent model. The problem is formulated and the optimal compensation and liquidation rules are characterized. It is also shown that, under an assumption about the distribution function of the output, debt can be used to implement the optimal liquidation rule.