Politicians face a trade-off between the policies that maximize their chances of reelection and their most preferred policies (or the policies most preferred by the constituency which they represent). This paper analyzes this trade-off in a dynamic electoral model in which the voters are not...

This paper develops a micro-founded general equilibrium model of the financial system composed of ultimate borrowers, ultimate lenders and financial intermediaries. The model is used to investigate the impact of uncertainty about the likelihood of governmental bailouts on leverage, interest...

On June 4-5, 2014, SUERF and Baffi Finlawmetrics jointly organised a Colloquium/Conference “Money, Regulation and Growth: Financing New Growth in Europe” at Bocconi University, Milan. The present SUERF Study includes a selection of papers based on the authors’ contributions to the Milan...

Recent literature on the interactions between labor unions and monetary institutions features either a supply or a demand channel of monetary policy, but not both. This leads to two opposing views about the effects of central bank conservativeness. We evaluate the relative merits of those...

This paper probes the limits of transparency in monetary policymaking along two dimensions: feasibility and desirability. It argues that even central banks that are considered champions of openness are not very clear about their measures of the output gap and about their beliefs regarding the...

Monetary policy usually enables policymakers to quickly but temporarily, achieve various real goals like high employment, financing of the budget deficit, attainment of balance of payments objectives and low interest rates. In the process, high powered mo