Financial intermediation is currently a subject of active research on both sides of the Atlantic. The integration of European financial markets, in particular, highlights several important issues. In this volume, derived from a joint CEPR conference with the Fundacion Banco Bilbao Vizcaya (BBV),...

We provide an exploratory quantitive analysis of the role of capital mobility and international taxation in explaining the observed cross-country diversity in the long-run rates of growth of per capita and total incomes as well as the population growth rates. Corroborative evidence is found for...

In this note, we reconsider the notion of ‘economic sovereignty.’ We argue that a small country may need to invest in assets of the sort of a port even when the common scale-economy argument indicates that using a port of a neighbouring country will be more cost effective. The reason for...

In 2002, a new legislation that harmonises insolvency laws within the EU came into effect. I find reasons – both theoretical and empirical – to doubt whether the new law has achieved the goal of decreasing the cost of cross-border insolvency and borrowing. I thus suggest an alternative...

The literature on financial imperfections and business cycles has focused on propagation mechanisms. In this paper we model a pure reversion mechanism, such that the economy may converge to a two-period equilibrium cycle. This mechanism confirms that financial imperfections may have a dramatic...

The literature on financial imperfections and business cycles has focused onpropagation mechanisms. In this paper we model a purereversion mechanism, such that the economy may converge to a two-period equilibrium cycle. This mechanism confirms that financial imperfections may have a dramatic...

Leveraged investors may be subject to contagion when sales of repossessed collateral create a downward spiral in fire sales prices, increasing margin requirements and drying up the supply of liquidity. This raises the question whether market integration is desirable when the risk of contagion is...

Current bankruptcy legislation in many countries tends to follow the US model of Chapter 11, whereby the courts have the authority to stay the contractual rights of the secured creditors. The alternative approach of freedom of contracting whereby the privately negotiated debt contract defines a...