We propose a simple model of the sovereign-bank diabolic loop, and establish four results. First, the diabolic loop can be avoided by restricting banks' domestic sovereign exposures relative to their equity. Second, equity requirements can be lowered if banks only hold senior domestic sovereign...

This timely book deals with the problem of pricing passenger and freight transportation within Europe. The contributors argue that current legislation affecting pricing and regulation is increasingly less successful in dealing with market failures and externalities such as congestion, air...

Among economists and policy makers more general, the fuel efficiency standard for cars and the fuel tax have been the subject of extensive debate. The major benefits of stricter fuel efficiency standards and higher fuel taxes are the reduction of Greenhouse gas emissions and the reduced oil...