The enforcement of social norms is considered as a main motivation for third-party intervention. We provide direct evidence for this theory in a cross-country experimental trust game with a sender, a receiver, and a third party who can punish or reward the receiver at own cost. As a novelty we...

This paper investigates whether in OECD-countries the negative relation between central bank independence and inflation is related to culture, in the sense of common values and norms. It appears that inflation is lower in countries where people dislike uncertainty. The tolerance in a society...

We use Bulgarian firm level data to investigate the impact of liquidity constraints on investment performance. Internal funds are an important determinant of investment in most industrialized countries. We test whether internal funds are important for firm investment during the current...

Although during the last decades the importance of stock markets has increased in all OECD countries, the cross-country differences appear to be remarkably stable. In this paper we relate the factors determining cross-country differences in stock market activity to deeply rooted norms and values...

Sovereign default is the switching state between successful and unsuccessful Fund catalysis. We find the IMF to be effective in mobilising private capital flows to middle-income countries that participate in a Fund program, but do not restructure their debt. A debt restructuring is a clear...

This paper reviews the recent literature on economics and culture to investigate whether and how it considers the context. It first describes how culture reentered the economic literature from 1990s onwards. It then presents empirical studies on the relation between culture, institutions and...

The authors use firm level data on Bulgaria to investigate the impact of liquidity constraints on firms investment performance. Internal funds are a important determinant of investment in most industrial economies. The authors use a simple accelerator model of investment to test whether...

Sovereign default is the switching state between successful and unsuccessful Fund catalysis. We find the IMF to be effective in mobilising private capital flows to middle-income countries that participate in a Fund program, but do not restructure their debt. A debt restructuring is a clear...

In this paper we develop and estimate a heterogeneous agents model with three different types of agents, switching beliefs, and two equity markets, Hong Kong and Thailand, in the period surrounding the Asian crisis. We find that investors are heterogeneous in their expectation formation...