This paper presents a DSGE model with banks that face moral hazard in management. Banks receive demand deposits and fund investment projects. Banks are subject to potential withdrawals by depositors which may force them into early liquidation of their investments. The likelihood of this...

In the present paper through an empirical analysis it will be pointed out that e-shopping improves income distribution, while economic and financial crisis worsen it. Data are taken from Eurostat. The elaboration of these panel data is made feasible by means of the Eviews software package

This paper studies an economy where agents can spend resources on consuming a private good and on funding a public good. There is asymmetric information regarding agents' relative preference for private versus public good consumption. I show how private good consumption should be coordinated...

This paper endeavours to illustrate the consequences of a credit squeeze by inserting a standard model of retail banks into some familiar macroeconomic models. Some possible policy conclusions are drawn about the benefits of incentives to increase lending at these times, and to reduce it in much...

Structured finance is often mentioned as the main cause of the latest financial crisis. We argue that structured finance per se did not trigger the last financial crisis. The crisis was propagated around the world because of poor risk management such as agency problems in the securitization...

The questions of whether there ever existed excessive risk-taking incentives from executive compensation in the financial industry, and whether top executives of financial services firms actually responded to such excessive incentives that eventually led to the crisis remain unanswered. The...

I study central supervision of local financial regulators in an economic union. Regulators each privately observe benefits from lenient local macroprudential policies. Separate deposit insurance funds allow no discretion to set policies because, with integrated financial markets, regulators...

Diversification through a financial intermediary has the benefit of transforming loans that need costly monitoring into bank deposits that do not. We show, however, that financial intermediation in a costly state verification model has a cost not yet analyzed: it allows for the existence of...

We propose a simple model of borrower optimism in competitive lending markets with asymmetric information. Borrowers in our model engage in self-deception to arrive at a belief that optimally trades off the anticipatory utility benefits and material costs of optimism. Lenders' contract design...

We propose a simple model of borrower optimism in competitive lending markets with asymmetric information. Borrowers in our model engage in self-deception to arrive at a belief that optimally trades off the anticipatory utility benefits and material costs of optimism. Lenders' contract design...