Using a number of theoretical considerations, we define distinct periods of anxiety for key economic agents that are involved in lending decisions; namely, consumers, CEOs, and banks. The main characteristic of anxious periods is that the perceptions and expectations about economic conditions...

Using a novel global data set with bank-year estimates of market power, we examine the impact of (i) the ownership status (foreign or domestic) of individual banks and (ii) the country-level trends in foreign bank presence on our market power estimates. We find that the ownership status of...

This study investigates whether regulations have an independent effect on bank risk-taking or whether their effect is channeled through the market power possessed by banks. Given a well-established set of theoretical priors, the regulations considered are capital requirements, restrictions on...

In this paper we seek a robust methodology to measure the relative public spending efficiency of 19 OECD countries over the period 1980-2000. Based on the functional classification of government expenditure, we decompose total public spending into its separate accounts and we employ a...

Abstract Following their EU15 counterparts, the banking systems of Central and Eastern European (CEE) countries underwent extensive reform since the 1990s. In this paper we estimate the degree of bank market power during the periods of financial reform in each European country, and subsequently...

This paper explores the relationship between public sector efficiency (PSE) and the level of democracy, both theoretically and empirically. At the theoretical level a simple model of elections with two time periods is presented, which takes into account whether the political regime is democratic...

This paper empirically examines the relationship between fiscal decentralization and public sector efficiency. A country-level dataset is used to measure public sector efficiency in delivering education and health services and the new indices are regressed on well-established decentralization...

The three-equation New-Keynesian model advocated by Woodford (2003) as a self-contained system on which to base monetary policy analysis is shown to be inconsistent in the sense that its long-run static equilibrium solution implies that the interest rate is determined from two of the system’s...

There is a growing consensus that a prolonged period of low interest rates can exert a negative impact on financial stability through the risk-taking incentives of banks. Using micro-level datasets from the US banking sector, this paper finds evidence of a highly significant negative...

In this paper we reconsider the formal estimation of the risk of financial intermediaries. Risk is modeled as the variability of the profit function of a representative intermediary, here bank, as formally considered in finance theory. In turn, banking theory suggests that risk is determined...