Over the past decades, cross-border financial flows have increased in importance and have in many occasions exceeded the underlying current account positions. This phenomenon has been accompanied by an increase in the volume of international equity transactions that accentuate the role of...

This paper considers the role of foreign investors in developed-country equity markets. It presents a quantitative model of trading that is built around two new assumptions: (i) both the foreign and domestic investor populations contain investors of different sophistication, and (ii) investor...

Within a two-step GARCH framework we explore the linkages between equity returns of ten sectors in the euro area, the United States and Japan, respectively. Our estimation framework allows a distinction to be made between spillover effects originating from one of the three currency areas and...

Four years after the introduction of the euro, this paper provides an overview of the current structure and integration of the euro area financial systems and related policy initiatives. We first compare the euro area financial structure with that of the United States and Japan. Using new and...

The harmonisation of fiscal and economic policy within the European Monetary Union (EMU) has had a considerable impact on the economies of member countries in the past decade. In particular, several studies indicate that the proceeding economic integration among euro area countries has important...

This Country Focus discusses the relation between public investment and economic growth in Poland. Theoretical and empirical work has shown that improvements in the quantity and quality of public infrastructure have a positive impact on growth in the medium and, possibly, in the long run. The...

Following several years of low growth Germany is presently enjoying a relatively strong recovery. With unemployment falling at record speed and fiscal consolidation progressing, the upswing is set to continue in spite of uncertainties surrounding the VAT increase of January 2007. This Country...

The Czech financial sector has changed dramatically since transition. In fifteen years, it has developed from a state-owned mono-bank into a privatised bank-based financial system with developing capital and private equity markets. This country focus analyses the development of the financial...

Since 1995 Germany has barely managed to grow by 1.2% annually, with growth over the last four years averaging only 0.6%. In 2005, growth will again be below1%. With these low growth rates Germany has clearly fallen behind all the other European countries. The German economy is suffering from a...