In the aftermath of the global financial crisis, a new policy paradigm has emerged in which old-fashioned policies such as capital controls and other government distortions have become part of the standard policy toolkit (the so-called macro-prudential policies). On the wave of this seemingly...

In this paper we study whether policy makers should wait to intervene until a financial crisis strikes or rather act in a preemptive manner. We study this question in a relatively simple dynamic stochastic general equilibrium model in which crises are endogenous events induced by the presence of...

In the debate concerning a country’s structural weaknesses there is an obvious neglect of space issues, an important component of which is regional imbalances. Yet, the persistence of such imbalances within countries has dictated the continuous investigation of their causes and of the required...