This paper presents a simple framework in which the location and the growth rate of economic activities are endogenous and interact. We show that the nature of the equilibrium and of the relation between growth and location depends fundamentally on whether capital is assumed to be mobile (in...

Despite the liberalisation of capital flows among OECD countries, equity home bias remains sizable. We depart from the two familiar explanation of equity home bias: transaction costs that impede international diversification, and terms of trade responses to supply shocks that provide risk...

European policy makers may have asked too much from regional policies: to decrease inequalities between regions, to increase efficiency at the national and European levels and to decrease inequalities between countries. This paper argues that these policies face a trade-off between equity and...

Spatial concentration of economic activities is one of the most salient features of economic development. The almost parallel urge by policymakers to counteract such a trend through public polices is also striking. This is not only reserved to those countries, especially in Europe, which have a...

Spillovers from national industrial policies can cause helpful or harmful competition among policy makers and helpful or harmful interactions among the targeted industries. As a result, it is not in general possible to say whether industrial policy coordination is good or bad. However, reaching...

In the COVID-19 pandemic, governments have, among other measures, mandated the use of COVID certificates to prove vaccination, recovery or a recent negative test, and have required individuals to show certificates to access shops, restaurants, and education or workplaces. While arguments for and...

The great financial crisis and the euro area crisis led to a substantial reform of financial safety nets across Europe and - critically - to the introduction of supranational elements. Specifically, a supranational supervisor was established for the euro area, with discrete arrangements for...

The European Union's banking union project started in mid-2012 in response to the euro-area crisis, with the goal of breaking the bank-sovereign vicious circle. The objective was also to restore private liability in banking and to move towards an integrated supranational market for banking...

The multilateral trading system is seriously threatened by the country which has been its main inspirer, the United States. The US position is focused on bilateral trade imbalances presumably resulting from unbalanced trade policies, but it is flawed. Not only does it make little sense given the...

This paper takes a step towards formalizing the theoretical interconnections among four post-Industrial Revolution phenomena - the industrialization and growth take-off of rich 'northern' nations, massive global income divergence, and rapid trade expansion. Specifically, we present a stages-of...