This paper analyzes the interaction between legal shareholder protection, managerial incentives, and outside ownership concentration. Legal protection a¤ects both the expropriation of shareholders and the blockholder's incentives to monitor. Because of this latter e¤ect and its repercussion on...

According to Paul Krugman, “the European unemployment problem and the US inequality problem are two sides of the same coin”. In other words, both continents have had the same shift in demand towards skill; in the US relative wages have adjusted and in Europe not. The implication of this...

Research on the impact of innovation on regional economic performance in Europe has fundamentally followed three approaches: (1) the analysis of the link between investment in research and development (R&D), patents, and economic growth; (2) the study of the existence and efficiency of regional...

We present a model of the maturity of a bank’s uninsured debt. The bank borrows funds and chooses afterwards the riskiness of its assets. This moral hazard problem leads to an excessive level of risk. Short-term debt may have a disciplining effect on the bank’s risk-shifting incentives, but...

The experience from the global financial crisis has raised serious concerns about the accuracy of standard risk measures as tools for the quantification of extreme downward risk. A key reason for this is that risk measures are subject to model risk due, e.g., to specification and estimation...

Classical dimensional analysis in its original form starts by expressing the units for derived quantities, such as force, in terms of power products of basic units etc. This suggests the use of toric ideal theory from algebraic geometry. Within this the Graver basis provides a unique primitive...

In this paper, we extend the literature on crash prediction models in three main respects. First, we relate explicitly crash prediction measures and asset pricing models. Second, we present a simple, effective statistical significance test for crash prediction models. Finally, we propose a...

This new SSATP discussion paper reviews the experience of an apparently successful corridor to help understand optimal mix and trade-offs in reviving historical trade route. The Maputo Corridor, which had fallen in disuse during the troubled period in Mozambique, is widely regarded as one the...

We live in an urban age. Over half the world’s population now lives in urban areas, while the urban population is expected to reach 60% by 2030. At the same time, the importance of cities for national economic growth and climate change continues to increase. Three groups of cities will be...

This paper explains the nonneutrality of money from two assumptions: (1) consumers dislike paying prices that exceed some fair markup on firms’ marginal costs; and (2) consumers under infer marginal costs from available information. After an increase in money supply, consumers underappreciate...