Governments often issue bonds in foreign jurisdictions, which can provide additional legal protection vis-à-vis domestic bonds. This paper studies the effect of this jurisdiction choice on bond prices. We test whether foreign-law bonds trade at a premium compared to domestic-law bonds. We use...

This paper applies the Phillips and Sul (2007) method to test for convergence in stock returns to an extensive dataset including monthly stock price indices for five EU countries (Germany, France, the Netherlands, Ireland and the UK) as well as the US over the period 1973-2008. We carry out the...

Whether observed differences in redistributive policies across countries are the result of differences in social preferences or efficiency constraints is an important question that paves the debate about the optimality of welfare regimes. To shed new light on this question, we estimate labor...

The EU Directive on Free Movement of 2004 extended free movement within the EU to Union citizens who are inactive and gave them access to the welfare benefits of host countries. The paper examines the extent to which these measures provoke migration to those countries with the highest levels of...

Distance related variables typically vary in a cross-section dimension but less so in a time dimension across cities, regions, or countries. The enlargement of the EU or the introduction of the euro, however, can be looked upon as integration shocks that are informative of the consequences of...

This paper presents a review of the most significant fiscal rules policymakers can choose from. The insights from this review are then applied to the current budgetary situation of the European Union. In the European Union, the supranational Stability and Growth Pact (SGP) should provide the...

In this paper, we study the aggregate and distributional implications of a smaller public sector in the euro area. By a smaller public sector, we mean a reduction in public debt and/or cuts in public spending, when such changes in fiscal policy are accommodated by adjustment in various taxes....

We estimate spillover effects of a fiscal shock in one member country in the euro area on outputs of the rest of the members, using a Global Vector Autoregression (GVAR) model. We compare the effects of a domestic fiscal shock with those of a similar size area-wide shock expressed as a weighted...

The paper compares the boom-and-bust cycles in Japan and Europe with respect to the reasons for excessive booms, the characteristics of the crises, and the (potential) effects of the crisis therapies. As in Japan the consequence of expansionary monetary and fiscal policies is the hysteresis of...