We examine financial intermediation when banks can offer deposit or loan contracts contingent on macroeconomic shocks. We show that the risk allocation is efficient if there is no workout of banking crises. In this case, banks will shift part of the risk to depositors. In contrast, under a...

In this paper we examine how individuals should be treated with respect to taxes, subsidies and agenda setting in constitutions in order to obtain efficient allocations of public goods and to limit tax distortions. We show that if public goods are socially desirable, the simple majority rule as...

In this paper we study how promoting product market competition by reducing mark-ups or by increasing productivity are able to complement labor market reforms. We use a simple general equilibrium model with different types of labor. The bottom-line of the paper is that product market reforms...