We study the effects of permanent and temporary income shocks on precautionary saving and investment in a "store-or-sow" model of growth. High volatility of permanent shocks results in high precautionary saving in the safe asset and low investment, or a "volatility trap." Namely, big savers...

Europe's power system is still marked by a distinct national component, and despite some regions with strongly integrated power systems, electricity supply today still has a largely national basis. Policies to decarbonise the power sector may fundamentally alter this situation, because power...

In my view, globalization is a process that has taken place episodically since approximately the beginning of the 16th century. Previously, there were a number of attemps at globalization, which however failed to attain the precondition of regular commercial and communicative relationships among...

This paper analyzes five Productive Development Policies (PDPs) implemented in Costa Rica, finding that they are not optimally addressing market failures. Moreover, government failures rather than market failures represent the main justification for PDPs. Even in the presence of market failures,...

Since the beginning of transition in 1990 from a centrally planned to a market oriented economy, the performance of Poland's economy has been outstanding if we take GDP growth as our measure. It is not specific reforms that can explain this performance but the radical ("big bang") reforms at the...

Who pays for immigration control? According to the Lisbon Treaty the cost of enforcing the European border against illegal immigration shall be shared among the EU members. Nonetheless, the Treaty is vague with respect to the 'appropriate measures' to adopt in order to distribute the financial...