We assess the nature of the European sovereign crisis in the light of a model borrowed from the second generation of currency crises. We bring the theory to the data to empirically test the presence of self-fulfilling dynamics and to identify what may have driven the market sentiment during this...

This paper traces R. G. Hawtrey’s main contributions to the theory of the lender of last resort national both (LLR) and international (ILLR). This theory is a continuation of one of the traditions of the classical period, started by Henry Thornton (1802) , that differs in important points from...

Differences between domestic financial systems can lead to international trade. A country with relatively developed or decentralized financial systems will export innovative commodities while a country with less developed and centralized financial systems will export traditional commodities....

For well over a decade many observers had warned that the European Union was ill-prepared in case of a financial storm because its market integration far outpaced its policy integration. This situation was well known to policy-makers but it was hoped that financial crises would wait until policy...

For well over a decade many observers had warned that the European Union was ill-prepared in case of a financial storm because its market integration far outpaced its policy integration. This situation was well known to policy-makers but it was hoped that financial crises would wait until policy...

Financial crisis are often associated with an endogenous credit reversal fol- lowed by a fall in asset prices and failures of financial institutions. To account for this sequence of events, this paper constructs a model where the excess risk-taking of portfolio investors leads to a bubble in...

This article questions the role of the fair value approach in the worsening of the present financial crisis by testing its impact on the performance on the Stock Exchange of the CAC 40 companies for which the application of the IAS 39 standard is compulsory. To that end, the authors propose...