The analysis of external shocks of real nature, such as the oil shock, requires an intertemporal framework to properly investigate through saving and investment decision the outcome of the balance of trade. By now there are quite few works replying on such an approach, M. Obstfeld (1980), J....

The remarkable increase in the real rate of interest all over the world and the appreciation of the dollar real exchange rate, toghether with the large fiscal stimulus from President Reagan's program has brought government deficits and their effects on the economy back to the foreground of the...

Does the removal of intra-state entry barriers increase welfare? Will all banks survive? Will it lead to a consolidation of the banking industry? The experience of credit market deregulation has not been always successful. Credit market liberalisation, via the removal of entry barriers, of...

This paper studies moral hazard in banking due to delegated monitoring in an environment of aggregate risk and examines its implications for credit market equilibrium and regulation, in a model where banks are price competitors for loans and deposits. It provides a rationale for an...

Within a setting where an established firm (incumbent) and a new venture engage in research and development (R&D) and compete in the product market, we analyze R&D cooperation and the optimum financing mode. We show that if an equilibrium is one where firms cooperate, then financing is provided...

This paper constructs a simple general equilibrium model to analyse the interactions between the financial and the real sector in an environment where liquidity holdings is an input of the credit/investment process. The supply of liquidity is constrained in that income pledgeability limits...

ecuritization performs two functions. One refers to the risk allocation between the bank and outside investors; the other consists of creating transferable/liquid securities. A key ingredient of liquid/claimtransferability is bankruptcy remoteness - the insolvency of the sponsor (the loan...

This paper develops a theoretical model as a foundation of empirical analysis of the transmission channel of non-performing loans (NPLs) on bank cost of capital, credit and liquidity creation in the Eurozone. Empirical results confirm the model's predictions and suggest that holding...

The Euro area has a unique monetary authority that governs money creation, but several individual countries' sovereign debts that differ in terms of safety. We analyse: i) the interactions between the financial and real sector in such an environment; ii) the role of government bonds as liquidity...

Stock market capitalization in developed countries grew while massive privatization plans were in progress. It is however possible that stock market development would have occurred anyway. Below we identify features that are specific to share-issue privatizations (SIPs) and should a priori...