In this paper we study a horizontally differentiated market for financial in-termediation and develop a simple explanation for concentration in the financial intermediation industry. We show that under asymmetric information, if the demand for funds is not perfectly elastic, the heterogeneity of...

This paper analyzes the a priori influence of the European Parliament (EP) and the Council of Ministers (CM) on legislation of the European Union adopted under its codecision procedure. In contrast to studies which use conventional power indices, both institutions are assumed to act...

The paper considers economic reforms in the EU using an economic-political model which captures the possible myopia in economic policies, and analyses reforms in taxation, the welfare state, and in the labour and product markets. We show that high taxes and an extensive welfare state are likely...

We study the effects of investor protection on the availability of external finance, entrepreneurship, and creation of new firms in an equilibrium search model of private capital markets. In addition to search frictions, we examine contract frictions, specifically interim and ex post moral...

Pension prefunding can be used to smoothe contribution rates in economies where ageing will increase pension expenditure. But how extensive should prefunding be, in a defined benefit pension system, when there is considerable uncertainty concerning future mortality, fertility, and migration? We...

Transparency regulation aims at reducing financial fragility by strengthening market discipline. There are however two elementary properties of banking that may render such regulation inefficient at best and detrimental at worst. First, an extensive financial safety net may eliminate the...

A Climate Agreement, like the one reached in Kyoto in 1997, on reducing greenhouse gas emissions may have important effects on the global and the national economies. The aim of this paper is to make some basic numerical evaluations of the economic effects of climate policies, imposing a ceiling...

Difference of opinion between banks and borrowers influences the competitiveness of loan markets: the more optimistic the borrowers, the more elastic the demand for loans. This reduces lending rates, decreases the expected profits of banks and discourages entry by banks. – banking ;...

This paper analyzes the effects of pre-lending screening on loan market outcome under oligopolistic competition. Better screening decreases loan interest margins and, provided that the average creditworthiness of borrowers is not too low, increases lending volume. We contrast specifically...