We examine the effect of regional favoritism on firms’ access to credit. Using firm-level data on a large sample of 29,000 firms covering 48 countries, we investigate the hypothesis that access to credit of firms is higher in the birth regions of national political leaders. We find evidence...

We introduce shocks to the availability of US dollar funding for non-US financial intermediaries in a two-country New Keynesian model with financial frictions. Such dollar shortages lead to uncovered interest rate parity deviations and have a significant negative effects on the macroeconomy....

This paper investigates how monetary expansion affects household consumption and savings through household debts. Using monetary policy cuts in China in the end of 2008 as an experiment, we find that the resulted increase in indebted households’ disposable income leads to increasing...

We build a tractable two-agent New Keynesian (TANK) model to jointly study four types of policy: conventional monetary policy, quantitative easing (QE), government expenditures, and lump-sum transfers. We find QE, transfers, and government spending can have the same effects on the aggregate...

Nauro Campos (University College London) will present his research co-authored with Fabrizio Coricelli (University of Siena, Paris School of Economics and CEPR) and Marco Frigerio (University of Siena) entitled The Political U: New Evidence on Democracy and Income. Jarko Fidrmuc (Zeppelin...

We investigate whether the occurrence of elections affect access to credit for firms. We perform an investigation using firm-level data covering 44 developed and developing countries. We find that elections have a detrimental influence on access to credit: firms are more credit-constrained in...

Governments around the world have gone on a massive fiscal expansion in response to the Covid crisis, increasing government debt to levels not seen in 75 years. How will this debt be repaid? What role do conventional and unconventional monetary policy play? We investigate debt sustainability in...

The literature on institutions and development has often cast societies in a light that contrasts the more inclusive, open-access, and equal ones with other less inclusive ones, but the scholarship comparing Imperial China and Premodern Europe does not fit easily in this framework. We provide a...

We welcome economic or econometric contributions on the following and related issues: - National safety as a public good - Strategic behavior and credible commitments (initiated by Thomas Schelling) - The theory of conflicts (initiated by Gordon Tullock, Jack Hirshleifer and Kai Konrad) - Theory...

Behavioural political economy uses behavioural concepts in explaining decisions of politicians, candidates for political office, voters, lobbyists, and others in the political and policymaking arena. Decision-makers may be subject to bounded rationality. Utility maximisation may be based on...