. ( 1973 ). managing the dollar. new york : norton. miron, jeffrey a. ( 1986 ). " financial panics, the seasonality of the nominal interest rate, and the founding of the fed ", american economic review, vol. 76 ( march ), pp. 125 - 40. mishkin, frederic s. ( 1991 ). " asymmetric information and financial crises : a historical perspective ", in r. glenn hubbard, ed., financial markets and financial crises. chicago : university of chicago press, pp. 69 - 108. mishkin, frederic s. ( 1994 ). " preventing financial crises : an international perspective ", the manchester school of economic and social studies, vol. 62, pp. 1 - 40. mishkin, frederic s. ( 1997 ). " the causes and propagation of financial instability : lessons for policymakers ( 145 kb pdf ) ", presented at " maintaining financial stability in a global economy, " a symposium sponsored by the federal reserve bank of kansas city, jackson hole, wyo., august 28 - 30, pp. 55 - 96. odell, kerry a., and marc d. weidenmier ( 2004 ). " real shock, monetary aftershock : the 1906 san francisco earthquake and the panic of 1907 ", journal of economic history, vol. 64 ( december ), pp. 1002 - 27. sprague, oliver m. ( 1910 ). history of crises under the national banking system. washington : national monetary commission. tallman, ellis, and jon moen ( 1998 ). " gold shocks, liquidity, and the united states economy during the national banking era ", explorations in economic history, vol. 35 ( october ), pp. 381 - 404. thornton, henry ( 1802 ). an inquiry into the nature and effects of the paper credit of great britain. london. reprint ( 1962 ), new york : kelley.

requires an increase in the capital stock. one should note that the table does not show the values of the variables as such, but it shows how much they differ from the baseline case of no change in the level of competition. it is assumed in the study that there is a very significant increase in competition. therefore, the estimated consequences are dramatic. euro area gdp increases by as much as 12. 4 % in the case presented in the last column of the table. the product market reform has greater effects than the labour market reform, particularly on production and investment. regarding employment, the effect of the labour market reform is almost as large. outside the euro area, there are some positive spill - over effects. this is partly because foreign consumers benefit from the decline in the prices of the goods produced in the euro area. one way to look at the results of the study is to consider what they tell us about the possible future adjustment of the u. s. current account. according to the results, competition enhancing reforms in the euro area would make the adjustment less painful for the euro area itself, as well as for the rest of the world. in finland, increases in competition would benefit the economy in much the same way as in the case of the whole euro area. this is shown by a simulation study made in the bank of finland. the study uses a dynamic general equilibrium model of the finnish economy, the aino model of the bank of finland. again, the effects of increased competition in the product and labour markets are studied. the results are briefly reported in the bank of finland bulletin, the first issue of 2005. the results are summarised in this slide. the slide shows the effects of decreases in the price and wage mark - ups in the finnish economy. both the short - run and the long - run effects are shown. the long - run effects are smaller than those in the previous slide. this is because in the study concerning finland, the assumed increase in competition is much smaller. the price mark - ups are assumed to decline by 2 percentage points and the wage mark - ups by 5 percentage points. two - thirds of the increase in gdp is due to the increase in competition in the product markets, and one - third is due to the increased competition in the labour market. again, one should note that the figures in the slide do not show the values of the variables as such, but rather their deviations from the baseline case of no change in competition. for example, the