This paper deals with the issue of how the market structure in banking affects the choice of means of payment. In particular, the demand for cash is analysed from this point of view. The analysis is based on a simple spatial transactions model in which the banks’ optimization problem is...

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Modern economic theory underlines the importance of expectations. However, it is less obvious how expectations are formed and how they should be measured. This paper analyses the role of inflation and output growth expectations in the US, the euro area and Japan. On the one hand, the question is...

We present a macro variable-based empirical model for corporate bank loans’ credit risk. The model captures the well-known positive relationship between probability of default (PD) and loss given default (LGD; i.e., the inverse of recovery) and their counter-cyclical movement with the business...

This paper deals with the fiscal behaviour of governments in the 1920s and 1930s. The intention is to see whether there were the same features in government behaviour as in the post-World War II era. In par-ticular, attention is paid to asymmetric fiscal policies, ie the question of whether...

Using a simple model of the euro area economy, we explore whether EMU has been associated with changes in behaviour both in the run up to Stage 3 and since it started operating. We find that some behaviour has indeed changed; expectations formation, inflation, country dispersion of behaviour,...

This paper provides some further tests for the proposition that a larger public sector leads to smaller output volatility. Both Gali and Fatas & Mihov have provided some evidence which appears to support this proposition. Their evidence is, however, based on a relatively small sample of...

An obvious answer to this question is the capital-skill complementarity hypothesis originally proposed by Zwi Griliches (1969). But the relatively poor performance of this hypothesis suggests that other explanations are needed. Here we consider the labour union behaviour in the wage bargaining...