bubbles crises and policy in many recent cases financial liberalization has led to a bubble in asset prices the bursting of the bubble results in a banking crisis and recession it is suggested such bubbles are caused by an interaction of the risk shifting problem arising from agency relationships in intermediaries and uncertainty concerning the expansion of credit two important policy objectives are identified the first is the prevention of bubbles in asset prices the second is minimizing the impact of spillovers on to the real economy during post bubble banking crises the different policy approaches taken in norway and japan are compared copyright 1999 by oxford university press

boom and bust cycles external imbalances and the real exchange rate when the current account balance and net capital outflows do not exactly offset each other international payment flows arise payment flows into a country push the real exchange rate up payment outflows push it down this article uses a model of optimal consumption and portfolio choice to determine the factors that drive international payment flows during boom and bust cycles it shows that during such episodes capital inflows first exceed the deficit on current account strengthening the currency later on when the return on domestic capital reverts to its normal level the current account recovers yet the overall decline of the net foreign asset position provokes a fall of the real exchange rate even below its initial level case studies of countries experiencing rapid economic expansions followed by economic and financial meltdowns confirm the article s theoretical predictions

taming capital flows abstract the argument of this paper is that growing capital mobility is unavoidable domestic financial liberalization and the revolution in information and communications technologies make it much more difficult to stop capital flows at the border effective controls will therefore have to become increasingly comprehensive onerous and distortionary the issue is therefore how to cope with the reality of high capital mobility and to manage the transition this means not freeing capital flows before substantial progress has been made in liberalizing domestic financial markets and strengthening financial supervision it means liberalizing foreign direct investment first access to stock and bond markets second and offshore bank funding last it means putting in place exchange rate monetary and fiscal policies that do not destabilize the capital account it means reforming monetary and fiscal institutions to assure the markets of the capacity to deliver desirable monetary and fiscal outcomes

what do twins share a joint probit estimation of banking and currency crises we study the determinants of twin crises and investigate the direction of causality between banking and currency crises in emerging markets we model banking and currency crises as dynamic events correlated over time and jointly estimate their probability using panel data simulation techniques we show that banking and currency crises are closely intertwined and are driven by common fundamentals banking crises exhibit strong state dependence suggesting that countries that have experienced a banking crisis in the past are more prone to experience another crisis finally we find evidence of unobserved heterogeneity and autocorrelation in the error term structure

ready for capital account convertibility abstract this paper investigates whether the impact of capital account convertibility on the long term volatility of economic growth depends on financial development it estimates a system of three simultaneous equations mean growth volatility of growth and financial development this allows for the study of both the impact of capital account liberalization on volatility as well as its direct impact on financial development results indicate that economies with low financial development fall prey to excess volatility arising from capital account openness while capital account openness itself has a significant positive impact on financial development the results are robust to alternative measures of financial development and volatility and to the removal of outliers

financial globalization and debt maturity in emerging economies this paper studies how financial globalization affects debt structure in emerging economies we find that by accessing international markets firms increase their long term debt and extend their debt maturity in contrast with financial liberalization long term debt decreases and the maturity structure shifts to the short term for the average firm these effects are stronger in economies with less developed domestic financial systems the evidence is consistent with financial integration having opposite effects on the firms that are able to integrate with world markets and obtain financing globally relative to the firms that rely on domestic financing only

zero interest rate policy and unintended consequences in emerging markets since 2009 central banks in the major advanced economies have held interest rates at very low levels to stabilise financial markets and support the recovery of their economies this paper outlines the unintended consequences of the prolonged period of very low world funding interest rates in emerging markets the paper is informed by a mises hayek bis view on credit booms and mises law of unintended consequences consistent with the presented credit boom view i provide evidence that the very low world funding interest rates are associated with a rise in volatile capital flows and asset market bubbles in fast growing emerging markets in line with mises law i further show that these unintended consequences give rise to a new wave of interventionism as policymakers in emerging markets increasingly reintroduce financially repressive measures to isolate the economies from foreign capital inflows

endogenous technical change and environmental regulation abstract a model of environmental regulation under uncertainty is developed to compare the effect of price versus quantity rules upon technical change quantity rules tend to encourage more efficient levels of technical change

who bears the incidence of import protection evidence from sri lanka abstract a simple general equilibrium model is employed to measure the incidence of protection this model focuses on the internal relative price effects of protection through the equilibrium conditions of the nontraded goods market the incidence of protection is measured via the concepts of incidence parameter true protection rates and income transfers resulting from protection the model is applied to sri lankan data the results indicate that a high proportion of all trade interventions operate as an implicit export tax that true protection rates to both import competing and exporting sectors are far below the nominal rates of assistance being provided to them and that income loss to exporters is about 4 of gdp we conclude that the incidence of protection falls mostly on the sri lankan exporters

measuring international capital mobility a review many barriers to the international movement of capital across national boundaries have been dismantled over the course of the last 20 years financial integration was greatly enhanced by the removal of capital controls on the part of the united states germany canada switzerland and the netherlands after 1973 the recycling of surpluses to developing countries through the euromarkets in the 1970 s the removal of capital controls in the united kingdom and japan beginning in 1979 financial integration among european community countries including france and italy in preparation for 1992 recent moves toward financial liberalization in smaller countries in the pacific and the steady process of technical and institutional innovation that has proceeded around the world some popular tests of international capital mobility however appear to show anomalous results martin feldstein and charles horioka upset conventional wisdom in 1980 when they concluded that changes in countries rates of national saving had very large effects on their rates of investment and interpreted this finding as evidence of low capital mobility the argument

real interest rates and growth improving on some deflating experiences tests of the mckinnon shaw hypothesis typically investigate the relationship between real interest rates and growth recent work has concluded that this relationship may be non monotonic this article investigates the role of real interest rate mismeasurement in explaining these non monotonicities when such mismeasurement is systematically related to growth it will produced biased empirical results after addressing these biases the article demonstrates that financial liberalisation may offer substantial economic gains in an average country raising real interest rates from 25 per cent to five per cent will increase real annual per capita gdp growth from zero to a relatively robust rate of two per cent

the transition to chlorine free pulp revisited nordic heterogeneity in environmental regulation and r d collaboration the purpose of this paper is to analyze the development paths leading to the transition to cleaner bleaching technologies in the pulp industry it devotes particular attention to the key features o

the circular relationship between inequality leverage and financial crises in this paper we put into perspective the recent literature which points to inequality as a possible cause of credit bubbles by reintegrating it into a more general analysis on the two way relationship between inequality and finance we focus more specifically on situations where high inequalities and widespread access to credit coexist and argue that even when institutions maintain more or less equal access to finance there may be a dynamic positive circular relationship between inequality and financial development however even if there is some evidence in the literature of a positive causal impact of inequality on credit this does not preclude other important cofounding factors the conclusions concerning the distributional impact of finance are more ambiguous a survey of the empirical literature highlights several issues that must be tackled first endogeneity reverse causality and coincidental factors are major concerns second the choice of consistent measurements for the key variables both credit and inequality has strong empirical implications and must be grounded on relevant theoretical channels third those circular dynamics have substantial policy implications for emerging economies since an increasing number face a joint increase in inequality and credit

currency crises and institutions abstract this study furthers recent literature on currency crises and institutions the main objective is to re evaluate the causes of currency crises by focusing on the role played by a broader array of institutional factors and crisis episodes than have previously been considered while at the same time controlling for economic factors our dataset consists of over 30 countries covering 13 institutional factors for the period 1984 2002 two questions are addressed they are 1 what mix of institutions may contribute to or set the stage for a currency crisis and 2 what mix of institutions may affect the depth of currency crises as measured by a decline in output our findings reveal that institutional as well as economic factors affect the probability of currency crises and that worse institutions are associated with bigger contractions in output during the crisis in general our strongest results regarding institutions show that corruption a de facto fixed exchange rate regime weak government stability and weak law and order increase the probability of a currency crisis we find mixed evidence that deposit insurance the removal of capital controls a lack of central bank independence financial liberalization and civil law increase the chance of crisis we find a similar set of factors worsens the contraction in output during a crisis except for deposit insurance which we find moderates the contraction in output

intra industry trade and the shifting of protection across sectors abstract recent work on commercial policy has focussed on the incidence of protection across sectors this work has focussed on the relative price effects of intervention and has been developed in a setting of inter industry trade this paper focusses on the incidence of protection in a setting of intra industry trade a three sector general equilibrium model is developed and incidence is explored in a variety of settings the analysis suggests that the non tradeable sector may bear the major burden of protection in a setting of intra industry trade

international overborrowing a decomposition of credit and currency risks summary the severity of the financial crises enveloping the tiger economies of southeast asia in 1997 came as a surprise to many observers this paper uses a simple fisherian model of the overborrowing syndrome to compare the asian crises of 1997 with earlier overborrowing episodes in mexico and chile while important similarities exist the crises in southeast asia have been exacerbated by the unhedged foreign exchange positions of asian banks these open currency positions not only imposed significant additional losses on the banks following devaluation they also magnified the scale of overborrowing during the cycle s initial boom phase failure to limit the exposure of banks to foreign exchange risk therefore increased the magnitude of the boom bust overborrowing cycle both ex ante and ex post the paper highlights the importance of effective regulation and supervision of capital markets with a focus on limiting the speculative currency positions of banks especially those that form the core of the domestic payments system and therefore enjoy a possibly implicit public guarantee improving the institutional infrastructure of financial supervision is the only effective way of mitigating the macroeconomic costs of overborrowing

good bye financial repression hello financial crash some unintended consequences of financial liberalization in latin america are analyzed in this paper intrinsic imperfectious in financial markets and the policy dilemmas they pose are reviewed first the stylized facts of southern cone experiments in financial liberization are then presented alternative ways of organlzing domestic capital markets under latin american conditions are discussed and an eclectic reform mongering program is proposed

studying the effects of household and firm credit on the trade balance the composition of funds matters i introduction the implications of higher levels of financial development have been investigated in a large number of studies both in the empirical growth and in the financial crisis literatures 1 a widely used indicator of financial development is the relative importance of loans issued by commercial banks and other financial intermediaries to the entire private sector that is the private credit to gross domestic product gdp ratio following the definition by king and levine 1993a 1993b a higher level of private credit indicates better developed financial markets and easier credit access for businesses and households yet these two types of borrowers vary in terms of the use of credit and might have different effects on macroeconomic performance in this article we study the link between the components of private credit and the trade balance we focus on the distinction between household and corporate sector credit and investigate whether these two types of credit have adverse effects on the trade balance of goods and services this article builds on a theoretical framework by backus kehoe and kydland 1994 who study the dynamics of the trade balance we extend their work by assuming two types of households one being credit constrained due to enforcement problems we then ease the credit constraints on households and firms and study the hypothesized effects by comparative statics analysis more specifically we argue that an increase in household credit raises the demand for consumption goods whereas firm credit growth raises the demand for investment goods while both can have a negative impact on the trade balance the difference is important because borrowing to finance consumption does not add to the productive capacity of an economy and to greater export earnings frankel and rose 1996 firm credit on the other hand has the potential to increase investment by relaxing the credit constraints on firms thus increasing exports and trade balance exploring the decomposition of private credit in emerging countries is relevant for several reasons first the effects of the increased level of household credit in emerging economies are still ambiguous on the one hand better access to credit helps credit constrained households to smooth out their consumption on the other hand it boosts spending and hence decreases savings in an influential paper japelli and pagano 1994 show that liquidity constraints on households raise the saving rates they also find empirical evidence that an increase in household credit decreases saving rates for a sample of organization for economic cooperation and development oecd countries yet the effects of household credit in emerging economies have not been explored second if we find that household and firm credit have different impacts on the trade balance of goods and services this underlines the importance of the decomposition of private credit which will also have key implications for the financial development growth link the level of private credit in emerging economies has been rising steadily after the financial liberalization process that took place in early 1990s however higher levels of total private credit do not necessarily imply higher levels of firm credit in fact data for emerging economies show that household credit rather than firm credit has been rapidly increasing in the past decade the higher share of household credit in the total private credit can crowd out investment especially in countries where stock and bond markets are not well developed to finance investment finally a possible negative link between household credit and trade balance has important policy implications for emerging economies as argued by wood 1997 the international monetary fund continues to place most emphasis within its programmes on the stabilisation objective and therefore the core of imf programmes continues to be based upon the restriction of domestic credit creation

effects of financial liberalisation and political connection on listed chinese firms financing constraints this paper examines the impact of recent financial liberalization in china on the financing constraints of publicly listed chinese firms with and without politically connected ceo chairman two continuous indices are used to measure the evolution and intensity of financial reforms a financial liberalization index and a capital control index the results indicate that while firms without politically connected ceo chairman face significant financing constraints and politically connected firms do not financial liberalization has reduced the constraints for the former similarly lower capital control in china s equity market lessens credit constraints for non connected firms no statistically significant impact is detected with regards to firms that have ceo chairman with powerful political background

financial crisis in southeast asia dispelling illusion the minskyan way this paper extends minsky s financial instability hypothesis to the case of the open liberalised economy making it possible to put forward a specifically minskyan account of the road to the financial crisis in southeast asia 1997 1998 the analysis suggests that the threats to growth and employment emanating from the financial sector which minsky identified in the closed economy setting are much intensified in open liberalised developing economies financial liberalisation is an important key factor in this process rival explanations of the crisis are examined and rejected in favour of the extended minskyan explanation the policy implications are derived and discussed copyright 2002 oxford university press

the liquidation of government debt high public debt often produces the drama of default and restructuring but debt is also reduced through financial repression fr a tax on bondholders and savers via negative or below market real interest rates after world war ii capital controls and regulatory restrictions created a captive audience for government debt limiting tax base erosion fr is most successful in liquidating debt when accompanied by inflation for the advanced economies real interest rates were negative half of the time during 1945 80 average annual interest expense savings for a 12 country sample range from about 1 to 5 of gdp for the full 1945 80 period we suggest that once again fr may be part of the toolkit deployed to cope with the most recent surge in public debt in advanced economies

the innovation effects of environmental policy instruments a typical case of the blind men and the elephant abstract in this paper we examine the innovation effects of environmental policy instruments in four literatures theoretical models on incentives for eco innovation econometric studies based on observed data survey analysis based on stated information and technology case studies the aim of this paper is to critically examine the methods and the results we argue that the case studies literature even when its results are specific and difficult to generalise is a necessary source of empirical evidence about policy impacts and the factors responsible for these impacts pointing to issues that are neglected in the theoretical and econometric literature such as the specifics of the innovation context and policy interaction effects the paper states five synthesised findings and makes a plea for multi method analysis one other important synthesised finding is that the influence of market based instruments on innovation such as emission trading and taxes is far weaker than assumed

the political economy of a global ban on mercury added products positive versus negative list approaches the main objective of this paper is to discuss and compare two regulatory options commonly used in multilateral environmental agreements the analysis is largely conceptual but we focus in particular on the recent global efforts to gradually phase out the use of mercury added products in the first regulatory approach no mercury added products would be allowed unless they are listed in an annex the negative list while in the second case all mercury added products would be allowed unless they are listed in an annex the positive list in both cases countries may have time to make the transition away from these products through the use of exemptions the paper provides first a conceptual discussion of bans as regulatory instruments and of the use of technology forcing standards to attain deep reductions in the reliance on hazardous substances we outline a simple theoretical framework within which different regulatory options for mercury added products can be analyzed this framework is employed to analyze some overall pros and cons of the negative and the positive list approaches specifically we address a number of generic factors that may differ across the two options such as a the potential presence of different types of information inefficiencies b the flexibility in compliance measures granted by the two approaches c the significance of administration costs as well as other relevant policy implementation issues the analysis indicates that the negative list approach could facilitate a more cost effective phase out of mercury in part since in this case an individual country seeking exemption would bear the burden of identifying the need for the exemption this requires though the use of long term compliance periods for selected product groups with the positive list approach the one currently adopted in the so called minamata convention on mercury it may be more difficult to induce mercury users to reveal their true costs of substituting to other products further empirical analysis is however needed to clarify the pros and cons of each option in different contexts

dollarization of bank deposits causes and consequences abstract this paper assesses the benefits and risks associated with dollarization of bank deposits we provide novel empirical evidence on the determinants of deposit dollarization its role in promoting financial development and on whether dollarization is associated with financial instability we find that a the credibility of macroeconomic policy and the quality of institutions are both key determinants of cross country variations in dollarization b dollarization is likely to promote financial deepening only in a high inflation environment and c financial instability is likely higher in dollarized economies the implications of these findings for financial sector and monetary policies are briefly discussed

europe s great depression coordination failure after the first world war in this paper i survey and reinterpret the extensive literature on europe s great depression i argue that europe could not exploit its vast economic potential after 1918 because the war had not yet come to an end indeed it did not end before 1945 both domestic and international institutions suffered from a lack of reciprocal trust and commitment which can be clearly illustrated in the realm of monetary policy but affected many other areas of policy making such as energy or migration policies these institutions in turn affected expectations and thereby the extent to which for example expansionary policies could be effective

wheels within wheels within wheels the importance of capital inflows in the origin of the spanish financial crisis with the creation of the euro the spanish economy established an exchange rate regime similar to that adopted by many emerging economies during the 1990s at the same time the eurozone as a whole adopted a currency system with features similar to the us currency regime in emerging economies as in the us economy the adoption of these models was accompanied by strong growth in capital inflows as well as severe financial mostly banking and or macroeconomic mostly trade imbalances several authors have linked capital inflows with imbalances as cause and effect this work uses some of those arguments along with statistical data on the characteristics and evolution of capital inflows registered by the spanish economy and by the eurozone as a whole in order to propose a causal link between post euro exchange rate regimes adopted in spain capital inflows and the imbalances that preceded the financial crisis of 2008

financial development and the instability of open economies this paper introduces a framework for analyzing the role of financial factors as a source of instability in small open economies our basic model is a dynamic open economy model with a tradeable good produced with capital and a country specific factor we also assume that firms face credit constraints with the constraint being tighter at a lower level of financial development a basic implication of this model is that economies at an intermediate level of financial development are more unstable than either very developed or very underdeveloped economies this is true both in the sense that temporary shocks have large and persistent effects and also in the sense that these economies can exhibit cycles thus countries that are going through a phase of financial development may become more unstable in the short run similarly full capital account liberalization may destabilize the economy in economies at an intermediate level of financial development phases of growth with capital inflows are followed by collapse with capital outflows on the other hand foreign direct investment does not destabilize

evaluation of the incentive structure a survey and application to cameroon abstract this article uses a simple general equilibrium framework to evaluate the incentive structure of a country pursuing a mixed import substitution export promotion strategy it illustrates how features of general equilibrium analysis can be incorporated into the traditional balassa corden effective protection framework which is supplemented by the evaluation of the incidence of protection on firms importing and exporting households consumers and taxpayers and the government its application to a less developed country ldc cameroon shows that the burden of tariff protection is shifted 25 in the short run and 64 in the long run on to the unprotected sectors especially exports as a result average nominal protection 58 8 is much higher than protection actually provided to the protected sectors the welfare effect of protection is ambiguous households viewed only as final consumers lose when they are viewed as taxpayers protection may become beneficial in the long run taking substitution possibilities into account when measuring protection has an impact on the ranking of firms according to their nominal and effective protection

exchange rate regimes for emerging markets moral hazard and international overborrowing this paper investigates the role of the exchange rate regime in a simple fisherian model of the overborrowing syndrome where domestic banks are subject to moral hazard the choice of exchange rate regime may have important implications for the macroeconomic stability of the economy banks that enjoy government guarantees have an incentive to increase foreign borrowing and incur foreign exchange risks that are underwritten by the deposit insurance system in the absence of capital controls this increases the magnitude of overborrowing and leaves the economy both more vulnerable to speculative attack and more exposed to the real economic consequences of such an attack while bad exchange rate pegs will tend to exacerbate the problem of overborrowing in emerging markets it is unclear that flexible exchange rate always dominate fixed exchange rates a good fix one that is credible and close to purchasing power parity may reduce the super risk premium in domestic interest rates and thereby narrow the margin of temptation for banks to overborrow internationally contrary to the current consensus regarding the lessons that should be drawn from the asian crisis a good fix may better stabilise the domestic economy while limiting moral hazard in the banking system

inefficiencies from financial liberalization in the absence of well functioning equity markets since the seminal works by mckinnon 1973 and shaw 1973 there has been active research into the working of financially repressed economies and the beneficial effects of elnancial liberalization see fry 1982 for a survey of literature they claim that liberalization of the elnancial sector from interest rate ceilings and other restrictions facilitates economic development and growth because higher interest rates lead to both increased savings and greater efficiency of capital allocation today the idea that financial activity should not be repressed has become the new orthodoxy in academia as well as in the major international institutions that provide policy guidelines for developing countries the elnancial liberalization argument however is incomplete the literature on emancial liberalization has emphasized eliminating interest rate ceilings and fostering free competition among banks it has largely overlooked the possibility that endogenous constraints in the credit market such as imperfect information could be signielcant barriers to efelcient credit allocation even when banks are freed from interest rate ceilings nor has the literature dealt with market structure e g the oligopolistic and cartelized banking systems found in most locs the literature has emphasized the role of the banking sector which is correctly perceived as the only organized capital market in most developing countries it has neglected the potential

endogenous financial intermediation and real effects of capital account liberalization abstract we consider lending and investment under asymmetric information in a small developing economy we allow different forms of financial contracts to arise endogenously financial intermediaries mitigate a moral hazard problem in investment choice through costly monitoring we then examine the impact of opening the capital account on both welfare and the structure of lending contracts liberalizing the capital account may improve or worsen the efficiency of financial intermediaries leading to an improvement or worsening of the aggregate composition of investment projects we show that efficient financial intermediaries in the closed economy are neither necessary nor sufficient for a capital account liberalization to improve welfare

three and a half cycles of mania panic and asymmetric crash east asia and latin america compared this paper argues that despite some significant differences the 1982 debt crisis the 1994 mexican crisis and the 1997 east asian crisis share the common characteristic that over lending and over borrowing are basically endogenous market failures of over liquid and under regulated financial markets along the lines described by kindleberger s manias panics and crashes although these crashes have tended to be asymmetric as the largest international lenders have emerged relatively intact the paper concludes with a discussion of brazil s increasing vulnerability to a sudden collapse of confidence and withdrawal of finance which indicates the probability of another impending crisis

economic costs of alternative monetary policy responses to speculative currency attacks abstract the outcome of a speculative attack on the foreign exchange rate can be classified into three cases i immediate depreciation of the nominal exchange rate ii successful defense or iii failed defense this paper explores which of these outcomes yields the lowest cost in terms of output and unemployment in the short and medium run ex ante the outcome of a speculative attack is uncertain therefore the appropriate response of monetary authorities to a speculative attack depends on the cost of an immediate depreciation compared with that of the expected outcome of a currency defense our empirical analysis focuses on a sample of 73 emerging and developing countries over the 1960 2011 period our results indicate that an immediate depreciation is the policy response that is associated with a lower expected output loss and unemployment in the short run and it tends to be expansionary in the medium run a defense if successful entails insignificant costs in the short run but unlike an immediate depreciation a successful defense is not expansionary in the medium run if a defense fails large output losses and an increase in unemployment ensue at least in the short run

the international monetary system in the last and next 20 years the last two decades have seen far reaching changes in the structure of the international monetary system europe moved from the european monetary system to the euro china adopted a dollar peg and then moved to a basket band and crawl in 2005 emerging markets passed through a series of crises leading some to adopt regimes of greater exchange rate flexibility and others to rethink the pace of capital account liberalization interpreting these developments is no easy task some observers conclude that recent trends are confirmation of the bipolar view that intermediate exchange rate arrangements are disappearing while members of the fear of floating school conclude precisely the opposite we show that the two views can be reconciled if one distinguishes countries by their stage of economic and financial development among the advanced countries intermediate regimes have essentially disappeared this supports the bipolar view for the group of countries for which it was first developed within this subgroup the dominant movement has been toward hard pegs reflecting monetary unification in europe while emerging markets have also seen a decline in the prevalence of intermediate arrangements these regimes still account for more than a third of the relevant subsample here the majority of the evacuees have moved to floats rather than fixes reflecting the absence of emu like arrangements in other parts of the world among developing countries the prevalence of intermediate regimes has again declined but less dramatically where these regimes accounted for two thirds of the developing country subsample in 1990 they account for a bit more than half of that subsample today as with emerging markets the majority of those abandoning the middle have moved to floats rather than hard pegs the gradual nature of these trends does not suggest that intermediate regimes will disappear outside the advanced countries anytime soon barry eichengreen and raul razo garcia

financial liberalization credit constraints and collateral investment in the mexican manufacturing sector abstract we examine the impact of financial liberalization on fixed investment in mexico using establishment level data from the manufacturing sector in addition to analyzing changes in cash flow sensitivities an innovative approach explores the role of real estate as collateral and addresses a potential censoring problem the results suggest that financial constraints were eased for the smallest firms but not for larger ones however the importance of possessing real estate increased given banks reliance on collateral in their lending the results also provide microeconomic evidence consistent with the role attributed to financial accelerator mechanisms during lending booms and during post crisis recessions

changing sources of competitive advantage cognition and path dependence in the finnish retail industry 1945 1995 in this study we analyze the finnish retail industry in 1945 1995 triangulating the major developments in society technology and firm level strategic choices we identified extensive variation in the sources of competitive advantage over time we found that the structural and cognitive cultural dimensions of firms that offered opportunities for success in some specific historical situations turned to be disadvantageous in other situations we propose a research framework that parcels managerial cognition into the elements of structure ideology and systemic and technical properties of the firm especially the notion of ideology is novel in the context of path dependence and cognition copyright 2006 oxford university press

true protection concepts and their role in evaluating trade policies in ldcs in many ldcs it is not uncommon to find incentives designed to encourage import substitution activities coexisting alongside incentives aimed at encouraging export activities this article evaluates a recent approach to evaluating commercial policy which among other things highlights some of the implications of simultaneously pursuing import substitution and export promotion the study develops a model which emphasises the incidence of protection and identifies the concept of true protection empirical results for a number of ldcs are discussed and the implications of these results evaluated in addition the article contrasts this approach with the effective protection approach to evaluating commercial policy

command and control revisited environmental compliance and technological change in swedish industry 1970 1990 this paper addresses the issue of environmental policy instrument choice for achieving deep emission reductions in the industrial sector specifically it provides a a theoretical and empirical

financial liberalization financial sector development and growth evidence from malaysia abstract the objective of this paper is to examine whether financial development leads to economic growth or vice versa in the small open economy of malaysia using time series data from 1960 to 2001 we conduct cointegration and causality tests to assess the finance growth link by taking the real interest rate and financial repression into account the empirical evidence suggests that financial liberalization through removing the repressionist policies has a favorable effect in stimulating financial sector development financial depth and economic development are positively related but contrary to the conventional findings our results support robinson s view that output growth leads to higher financial depth in the long run

on firm and product specific true protection efforts at providing relevant indices of incentive structure comparative advantage and international competitiveness have led to the concept of true protection such a framework can be used to analyse the incidence of protection across sectors analysis has so far been carried out under the assumption of a uniform tariff and calculations limited to average rates nothing could then be said with respect to the incidence at the firm or product level this article expands on an existing model by 1 presenting firm and product specific true protection indices 2 generalising previous conclusions on true protection to encompass firm and product specific analysis it is shown that failure to take into consideration substitution possibilities may yield incorrect evaluation of the structure and level of protection