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Failing Institutions Are at the Core of the Euro Crisis

Nowak, Alojzy Z. - 2012

The European Union was created to promote economic, cultural, and regional prosperity. However, the Global Financial Crisis demonstrates that its economic institutions are flawed. While each sovereign state in the Eurozone forfeits the control of its money supply, the lack of a common fiscal...

Persistent link: https://www.econbiz.de/10013099006

How Central Banks End Crises

Gorton, Gary B. - 2014

To end a financial crisis, the central bank is to lend freely, against good collateral, at a high rate, according to Bagehot's Rule. We argue that in theory and in practice there is a missing ingredient to Bagehot's Rule: secrecy. Re-creating confidence requires that the central bank lend in...

Persistent link: https://www.econbiz.de/10013048087

An Historical Walk Through Recent Financial Crises

Kowalski, Tad; Shachmurove, Yochanan - 2011

This paper analyzes the causes and implications of recent financial crises. Financial crises in general lead to changes in both theory and practice of economics. The paper takes an historical overview. The global consensus of economic theory during the 20th century is discussed. The paper...

Persistent link: https://www.econbiz.de/10014180395

Political Booms, Financial Crises

Ordoñez, Guillermo - 2014

We show that political booms, measured by the rise in governments' popularity, predict financial crises above and beyond other better-known early warning indicators, such as credit booms. This predictive power, however, only holds in emerging economies. We show that governments in emerging...

Persistent link: https://www.econbiz.de/10013050233

Select the Valid and Relevant Moments : An Information-Based LASSO for GMM with Many Moments

Cheng, Xu - 2013

This paper studies the selection of valid and relevant moments for the generalized method of moments (GMM) estimation …-selection estimation. The new method performs moment selection and efficient estimation simultaneously via an information-based adaptive … GMM shrinkage estimation, where an appropriate penalty is attached to the standard GMM criterion to link moment selection …

Persistent link: https://www.econbiz.de/10013074163

Select the Valid and Relevant Moments : A One-Step Procedure for GMM with Many Moments

Cheng, Xu - 2013

This paper considers the selection of valid and relevant moments for the generalized method of moments (GMM) estimation …-selection estimation. The new moment selection method is achieved via an information-based adaptive GMM shrinkage estimation, where an … appropriate penalty is attached to the standard GMM criterion to link moment selection to shrinkage estimation. The penalty is …

Persistent link: https://www.econbiz.de/10013089571

Comparing Predictive Accuracy, Twenty Years Later : A Personal Perspective on the Use and Abuse of Diebold-Mariano Tests

Diebold, Francis X. - 2012

The Diebold-Mariano (DM) test was intended for comparing forecasts; it has been, and remains, useful in that regard. The DM test was not intended for comparing models. Unfortunately, however, much of the large subsequent literature uses DM-type tests for comparing models, in (pseudo-)...

Persistent link: https://www.econbiz.de/10013100935

Testing Predictive Ability and Power Robustification

Song, Kyungchul - 2009

One of the approaches to compare forecasts is to test whether the loss from a benchmark prediction is smaller than the others. The test can be embedded into the general problem of testing functional inequalities using a one-sided Kolmogorov-Smirnov functional. This paper shows that such a test...

Persistent link: https://www.econbiz.de/10014202841

Buy, Keep or Sell : Economic Growth and the Market for Ideas

Akcigit, Ufuk - 2015

An endogenous growth model is developed where each period firms invest in researching and developing new ideas. An idea increases a firm's productivity. By how much depends on how central the idea is to a firm's activity. Ideas can be bought and sold on a market for patents. A firm can sell an...

Persistent link: https://www.econbiz.de/10013034553

Pricing in Matching Markets

Mailath, George J. - 2010

Different markets are cleared by different types of prices --- a universal price for all buyers and sellers in some markets, seller-specific prices that are uniform across buyers in others, and personalized prices tailored to both the buyer and the seller in yet others. We introduce the notion...

Persistent link: https://www.econbiz.de/10013148527