The principal-agent problem and uncertainty are some of the key factors affecting financial and political markets. Fear of the unknown plays an important role in human decision making, including voting. This article describes a theoretical model where voter risk aversion towards uncertainty...

This review concentrates on the role of information asymmetry in financial markets in amplification and propagation of short-run output fluctuations. We find that the so-called Financial Accelerator effect provides a consistent, first principle based, theoretical framework for the analysis of...

If financial markets are perfect, the choice of the sources of finance does not influence investment decisions. However, financial markets are considered to be far from perfect. This review concentrates on the role of information asymmetry in determining real investment decisions. Despite the...

The basic aim of this article is to consider the effect of the current financial crisis on the movements and sustainability of the public debt in the period up to 2013. It is shown that changes in the public debt come from the effect of the primary deficit created, stockflow adjustment, the real...

This paper addresses two main questions: first, what is the scope for domestic and external market-based financing of Croatia’s government budget deficit; and second, what is the scope for expansionary fiscal policy in Croatia. Both questions are addressed from a broader Central and Eastern...