We study the response of bond spreads to a liquidity supply shock in the credit default swap (CDS) market. Our identification strategy exploits the exogenous exit of a large dealer from the single-name CDS market as well as granular data on CDS transactions and bond portfolio holdings of German...

We explore the possibility of designing matching mechanisms that can accommodate non-standard choice behavior. We pin down the necessary and sufficient conditions on participants’ choice behavior for the existence of stable and incentive compatible mechanisms. Our results imply that...

We examine how competition affects VAT pass-through in isolated oligopolistic markets as defined by the Greek islands. Using daily gasoline prices and a difference-in-differences methodology, we investigate how changes in VAT rates are passed through to consumers in islands with different market...

Despite far-reaching banking sector reforms and a prolonged period of macroeconomic stability and strong economic growth, financial intermediation in Armenia has lagged behind other transition countries, and interest rate spreads have remained higher than in most Central and Eastern European...

More developed financial systems are associated with higher investment and better economic performance. This paper discusses possible factors that may inhibit a deepening of bank intermediation and more efficient banking in Brazil, two aspects that are found to be significantly different than in...

This paper examines the role of middlemen (brokers) in an imperfect secondary market for quota licenses. Middlemen facilitate trade when markets are thin, as potential buyers and sellers find it difficult to meet and transact directly. However, in thin markets, middlemen also have the ability to...

Bank profits are high in Sub-Saharan Africa (SSA) compared to other regions. This paper uses a sample of 389 banks in 41 SSA countries to study the determinants of bank profitability. We find that apart from credit risk, higher returns on assets are associated with larger bank size, activity...