The recent increase of interest rate spreads in Europe and their apparent detachment from underlying fundamental variables has generated a debate on multiple equilibria in the sovereign bond market (see De Grauwe and Ji (2012)). We critically evaluate this hypothesis, by pointing towards an...

The determinants of portfolio choice have been studied extensively in the field of household finance. In this paper we study the determinants of the decision to hold risky assets based on a novel dataset of German bank data. Our primary focus is the question whether East Germans differ in their...