There is a significant literature related to the causes of the recent financial crisis, but the costs and measures that it involved are still under discussion. The recent turmoil has proved to be more costly in terms of GDP growth and public debt. The smaller fiscal costs were due, in part, to...

Using industry data from Eurostat and applying the Rajan-Zingales methodology, we investigate the real growth effects of banking sector integration in the European Union. Our sample stretches from 2000 until 2012 and includes the phase of rapid financial integration before the crisis as well as...

Foreign Direct Investment (FDI) bring an essential contribution to economic growth. They create jobs, optimize the allocation of resources, technology transfer and stimulate trade. Doing business in Romania needs friendly taxation and economic freedom for entrepreneurs, including to foreign...

This paper estimates a two-country model with a global bank, using US and Euro Area (EA) data, and Bayesian methods. The estimated model matches key US and EA business cycle statistics. Empirically, a model version with a bank capital requirement outperforms a structure without such a...

We examine the impact of the global financial crisis on the degree of international income and consumption risk-sharing among industrial economies using returns on cross-border portfolio holdings (e.g., debt, equity, FDI). We split the returns from the net foreign holdings as receipts (inflows)...

In general, incentive pay is not desirable for two main reasons: it puts the worker or employee at risk of fluctuations in his/her wages and it is costly to run. Incentive pay may be explained and justified by four phenomena, which may have important effects on the net benefits of an...

Tracing the SEC ban on the short selling of financial stocks in September 2008, this paper investigates whether such selling activity before the 2008 short ban reflected financial companies’ risk exposures in the subprime crisis. The evidence suggests that short sellers sold short stocks that...

The aim of this paper is to examine the impact of US macroeconomic conditions—namely, exchange rate and short-term interest rate—on the stock markets of seven Asian countries (China, India, the Philippines, Malaysia, Singapore, Thailand, and South Korea). We use daily data for the period...

Beyond the severe economic impact, another consequence of the 2008 financial crisis is the worldwide indignation felt toward the finance industry for its direct involvement in creating this crisis. It is now a befitting question to ask: What, if any, is the noble purpose of finance? I apply the...