In this article we examine one potential explanation for the cross-country differences in the importance of banks and capital market financing of investment. We provide both an equilibrium model predicting and empirical evidence showing that countries with explicit deposit insurance and a high...

Price stability is now the paramount objective for the vast majority of modern central bankers. Combined with changes in central bank structure, this policy framework has yielded low and stable inflation that has brought with it high and stable growth. Taking recent successes as a starting...

Over the past 20 years, macroeconomic performance has improved in industrialised and developing countries alike. In a broad cross-section of countries inflation volatility has fallen markedly while output variability has either fallen or risen only slightly. This increased stability can be...