The Great Financial Crisis of 2007-09 confirmed the vital importance of advancing our understanding of macrofinancial linkages, the two-way interactions between the real economy and the financial sector. The crisis was a bitter reminder of how sharp fluctuations in asset prices, credit and...

This paper studies a dynamic version of the Holmstrom-Tirole model of intermediated finance. I show that competitive equilibria are not constrained efficient when the economy experiences a financial crisis. A pecuniary externality entails that banks' desire to accumulate capital over time...

We argue that the present crisis and stalling economy continuing since 2007 have clear origins, namely in the delusionary belief in the merits of policies based on a “perpetual money machine” type of thinking. Indeed, we document strong evidence that, since the early 1980s, consumption has...

We examine the long-run relationships and short-run dynamic linkages among 9 major cross-currency swap spreads, with specific emphasis on how crisis periods have impacted the long-run relationships and short-run dynamic transmissions. The results show that the long-run relationships were...

We examine the long-run relationships and short-run dynamic linkages among 9 major cross-currency swap spreads, with specific emphasis on how crisis periods have impacted the long-run relationships and short-run dynamic transmissions. The results show that the long-run relationships were...

In a one of its kind study on the subject, weak form efficient market hypothesis (EMH) and Samuelson's dictum has been analyzed for seven major developed (Australia, Canada, France, Germany, Japan, UK and USA) and developing markets (Argentina, Brazil, China, India, Mexico, Russia and South...

This Policy Analysis explains the antecedents of the current global financial crisis and critically examines the reasoning behind the U.S. Treasury and Federal Reserve's actions to prop up the financial sector. It argues that recovery from the financial crisis is likely to be slow with or...

The life satisfaction literature has boomed in the last decades since economists have access to more accurate databases allowing to test the impact of alternative variables on subjective well-being. A still unexplored issue is the relationship between financial crises and life satisfaction, due...

Die Frage nach der Kausalität fällt in die Methodologie. Methodologie ist in den Wirtschaftswissenschaften ein Bereich, der sowohl bei Ökonomen als auch bei Philosophen kaum Beachtung findet. Ökonomik hat sich ursprünglich als eine kausal erklärende Wissenschaft verstanden. Sie wollte für...