Given the magnitude of “global imbalances” in the run-up to the subprime crisis, we test for an impact of the current account balance on the probability of banking crises in OECD countries since 1980. This variable has been neglected in most early warning models to date, despite its...

Simple time series models looking for the effect of financial crises on output generally find that they reduce the sustainable level of output permanently. However, not all crises are the same, with some being caused by recessions and others causing or preceding recessions. Using a common...

In the wake of the subprime crisis, there has been widespread discussion of the disproportionate risks posed to the financial system by large banks that may consider themselves “too big to fail”. This has led in turn to suggestions that radical policies with the effect of reducing bank size...

Simple time series models looking for the effect of financial crises on output generally find that they reduce the sustainable level of output permanently. However, not all crises are the same, with some being caused by recessions and others causing or preceding recessions. Using a common...

Policy proposals on the new international standards for bank capital and liquidity are being debated without any methodical evaluation of their effects on both crisis probabilities and concurrent social costs.

This paper explores the impact of openness, as measured by import penetration, on the size and duration of fiscal multipliers and spillovers across European Union members. The analysis is embedded in a macroeconomic model, NiGEM, to capture structural differences across countries, time and...

Abstract Liberalisation of the trading environment, through regional integration and the formation of WTO, is shown to increase trade growth relative to GDP. The impact of trade liberalisation compounded over time and added about 1.5 per cent per annum to world trade growth during the last...

Output growth in the Euro Area has been disappointing since the formation of EMU. This may be the consequence of the new monetary and exchange rate arrangements, but it is necessary to remove the effects of other factors such as the growth of labour input, skills, knowledge and risk premia. This...

Abstract Liberalisation of the trading environment, through regional integration and the formation of WTO, is shown to increase trade growth relative to GDP. The impact of trade liberalisation compounded over time and added about 1.5 per cent per annum to world trade growth during the last...