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Both the academic literature and the policy debate on systematic bailout guarantees and Government subsidies have …, we show that a systematic bailout regime increases the expected profits from coordination and simultaneously raises the … financial crisis and the extensive use of bailout schemes. …
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This paper studies the effectiveness of Euro Area (EA) fiscal policy, during the recent financial crisis, using an estimated New Keynesian model with a bank. A key dimension of policy in the crisis was massive government support for banks - that dimension has so far received little attention in...
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