Recent empirical studies criticize the sluggish financial integration in the euro area and find that only interbank money markets are fully integrated so far. This paper studies the optimal regional and/or sectoral integration of financial systems given that integration is restricted to the...

Heterogenous banking supervision and regulation is often considered as the most important impediment for Pan-European Bank mergers. In this paper we identify other more fundamental reasons for a limited degree of cross-country integration in retail banking. We argue that the distribution of...

This paper compares four forms of inter-regional financial risk sharing: (i) segmentation, (ii) integration trough the secured interbank market, (iii) integration trough the unsecured interbank market, (iv) integration of retail markets. The secured interbank market is an optimal risk-sharing...

This paper studies the implications of cross-border financial integration for financial stability when banks' loan portfolios adjust endogenously. Banks can be subject to sectoral and aggregate domestic shocks. After integration they can share these risks in a complete interbank market. When...

Eine Politik der Verringerung der Arbeitslosigkeit über mehr Flexibilität des Arbeitsmarktes stößt auf den Widerstand der Arbeitsplatzbesitzer als Verlierer entsprechender Maßnahmen. Wie könnten die Interessen der Insider in ein Reformpaket einbezogen werden?

Reformen haben – auch wenn sie sich langfristig positiv auf die Mehrheit der Bevölkerung auswirken – nicht immer den Rückhalt bei den Wählern, der bei rein ökonomischer Betrachtungsweise wünschenswert wäre. Wie lassen sich „unliebsame“ Reformen besser „verkaufen“? Was sollten...

In this paper I show that central bank flexibility may not be desirable when it encourages trade unions to behave more aggressively. The argument is based on a model where risk averse trade unions interact with a central bank. A flexible central bank stabilizes economic shocks and reduces output...

Some committees convene behind closed doors while others publicly discuss issues and make their decisions. This paper studies the role of open and closed committee decision making in presence of external influence. We show that restricting the information of interest groups may reduce the bias...

Recent theoretical research has studied extensively the link between wage setting and monetary policymaking in unionized economies. This paper addresses the question of the role of monetary uncertainty from both an empirical and theoretical point of view. Our analysis is based on a simple model...