This paper studies the cyclical pattern of ex post markups in the banking system using balance-sheet data for a large set of countries. Markups are strongly countercyclical even after controlling for financial development, banking concentration, operational costs, inflation, and simultaneity or...

This paper empirically investigates whether donor countries punish sovereign defaults by reducing foreign aid ows. Our findings reject the hypothesis formulated in the theoretical literature that a default leads to a loss of foreign aid for the defaulting country. Creditor countries directly...

Political risk represents an important hidden transaction cost that reduces international trade. This paper investigates the claim that German public export credit guarantees (Hermes guarantees) mitigate this friction to trade flows and hence promote exports. We employ an empirical trade gravity...

In this paper we revisit medium- to long-run exchange rate determination, focusing on the role of international investment positions. To do so, we develop a new econometric framework accounting for conditional long-run homogeneity in heterogeneous dynamic panel data models. In particular, in our...

Using a fixed-effects panel data approach, FDI flows of 22 OECD countries are explained by gravity equations over the period 1991-2001. It is distinguished between all available observations, Intra-EU25 observations only, and observations not belonging to the EU25 area in order to control for...

What does the saving-investment (SI) relation really measure and how should the (SI) relation be measured? These are two of the most discussed issues triggered by the so called Feldstein-Horioka puzzle. Based on panel data we introduce a new variant of functional coefficient models that allow to...

Several empirical studies are concerned with measuring the effect of currency and current account crises on economic growth. Using different empirical models this paper serves two aspects. It provides an explicit assessment of country specific factors influencing the costs of crises in terms of...

The paper focuses on the impact of business related R&D spending on input factor productivity (IFP) using international patent applications as a technology diffusion channel. Considering the relationship between research and productivity, international patent pattern reflects the link between...

In this paper we revisit medium- to long-run exchange rate determination, focusing on the role of international investment positions. To do so, we develop a new econometric framework accounting for conditional long-run homogeneity in heterogeneous dynamic panel data models. In particular, in our...

Applied general and partial equilibrium models are widely used tools for ex ante analysis of trade policy changes. However, simulation results seem to exhibit significant variation across publications, and the often criticised ‘black box’ character of applied trade models makes meaningful...