Financial capital is considered as a precondition of forming an integral market system. Based on financial capital a vertical market model is taking shape. It includes the following leading markets: strategic markets of financial capital, finance and money markets, markets of physical (cluster)...

The TARGET2-system impedes economic recovery within the EMU. Hard budget constraints are a key to kick-start structural reforms in some EMU-member countries. However, the TARGET2-system is not only aggravating real misalignments but also softening budget constraints. The authors argue that the...

The sovereign debt restructuring before 2008 was considered as an infrequent economic sequel based on the assumption that a „sovereign borrower couldn't become bankrupt”. In Argentina, on the other hand, the repeating waves of populism, misconducted economic governance of the 1990's and the...

The paper employs cointegration, Fully-Modified Ordinary Least Squares (FMOLS), Error Correction and the Generalized Method of Moments (GMM) techniques to investigate the relationship between economic growth and financial development using annual time series data (1971-2010) from Ghana. Three...

The sovereign debt restructuring before 2008 was considered as an infrequent economic sequel based on the assumption that a „sovereign borrower couldn't become bankrupt”. In Argentina, on the other hand, the repeating waves of populism, misconducted economic governance of the 1990's and the...

Economic growth involves metamorphosis of the financial system. Forms of banks and bank money change. These changes, if not addressed, leave the banking system vulnerable to crisis. There is no greater challenge in economics than to understand and prevent financial crises. The financial crisis...

This paper shows that when financial frictions are modeled dynamically, broader inferences can be drawn from DSGE models. By embedding a partial equilibrium framework of bankruptcy proceedings in a dynamic New Keynesian model I find, for example, that financial liberalization episodes are only...

This paper investigates the transmission of macroeconomic shocks to production in a model that includes a large and a small bank. The two banks are differentiated by parameters that govern their sensitivities to their own and their borrowers’ balance sheets and simulations show that the large...

Since the 2008 global financial crisis, and after decades of relative neglect, the importance of the financial system and its episodic crises as drivers of macroeconomic outcomes has attracted fresh scrutiny from academics, policy makers, and practitioners. Theoretical advances are following a...

House prices have increased significantly in Canada over the past decade, driving household debt and residential construction activity to historical highs. Although macro-prudential tightening has slowed the pace of household borrowing in the last few years, house prices have continued to trend...