An error correction specification which nests the linear-quadratic production smoothing and stock-adjustment models of inventories is estimated on U.S. seasonally adjusted two-digit SIC data. The restrictions of the general model to the production smoothing specification is accepted for four out...

This paper examines both the objectives and the available instruments for new macroprudential policy-making bodies. It argues that the objective--financial stability--is best understood as avoiding widespread disruption of financial flows. Achieving this objective requires that policy-makers...

The Basel committee proposes making regulatory capital requirements more risk sensitive. Cost‐benefit assessment suggests that this yields greater efficiency in the use of regulatory capital, but has substantial enforcement and compliance costs and may well increase the severity of banking...

This book provides a comprehensive review of the prospects for financial markets in the face of rapid technological development and international integration. It offers a revolutionary perspective, exploring the challenges for regulators and demonstrating a network economics approach to explain...