This paper analyzes the impact of international trade on the quality of institutions, such as contract enforcement, property rights, or investor protection. It presents a model in which imperfect institutions create rents for some parties within the economy, and are a source of comparative...

The paper introduces a framework for studying the hierarchy of growth factors, from deep to more immediate. The specific setting we examine is 18th and 19th century Germany, when institutional changes introduced by reforms and transportation improvements converged to create city growth. We...

We study the importance of technology and institutions in determining the size of markets in five different countries and fifteen different German states. The setting of 19th century Europe presents a unique opportunity to address this issue, since it witnessed fundamental change in both...

Can patent protection and product market competition complement each other in enhancing incentives to innovate? In this paper, we address this question by investigating how innovation responses to a substantial policy initiative increasing product market competition interact with the strength of...

The internal market in Europe will greatly increase the international mobility of resources. How will this affect fiscal policy in different countries? The first part of the paper considers taxation of capital in a two country model, where a democratically chosen government in each country...

Most observers have concluded that while money markets and government bond markets are rapidly integrating following the introduction of the common currency in the euro area, there is little evidence that a similar integration process is taking place for retail banking. Data on cross-border...

In the last two decades the European financial markets have become more market oriented. We analyze the economic and political forces that have triggered these changes as well as their likely welfare implications. We also try to assess whether this trend will continue. Based on our analysis, we...

This paper documents a set of stylized facts about recent trends in cross-border M&A (CBMA) activity around the world. The facts focus on key features of CBMA such as (i) the magnitude; (ii) how it varies across industries and locations; (iii) how it compares to levels of greenfield FDI over time;...

Employing a wide range of individual-level surveys, we study the extent of cultural and institutional heterogeneity within the EU and how this changed between 1980 and 2008. We present several novel empirical regularities that paint a complex picture. While Europe has experienced both systematic...

We identify a new set of stylized facts on the 2008-2009 trade collapse that we hope can be used to shed light on the importance of demand and supply-side factors in explaining the fall in trade. In particular, we decompose the fall in international trade into product entry and exit, price...