This paper assesses the merits of countercyclical bank balance sheet regulation for the stabilization of financial and economic cycles and examines its interaction with monetary policy. The framework used is a dynamic stochastic general equilibrium model with banks and bank capital, in which...

Road safety policies and automobile insurance contracts often use incentive mechanisms based on traffic violations and accidents to promote safe driving. Can these mechanisms improve road safety efficiently? Do they reduce asymmetric information between drivers and insurers and regulators? In...