A collective and an individual investment in financial literacy, plus intrinsic skills, contribute to each household's financial literacy. We show that low- and high-skilled households oppose the collective investment, contrary to households in the middle. Despite the lack of well-behaved...

We study how capital investors are treated in a society that includes, but is not limited to, investors. We show that investors are taxed, which causes inefficiently low investments, under poor economic conditions, whereas are subsidized, which causes inefficiently high investments, under good...

We study bank contributions that ex ante fund government guarantees supported by a fiscal backstop in a general equilibrium setting where banks intermediate between risk-averse households and state-contingent investments. We offer an analytical characterization of optimal bank contributions as a...

We study how bankers can elicit lower capital requirements via lobbying: Bankers pledge to politicians a lobbying rate as a fraction of bank revenues, thus relating politicians' welfare to the size of banks. This induces politicians to lower capital requirements, which causes high leverage...

We study the political economy of bank capital regulation from a positive and normative perspective. In a general equilibrium setting, capital requirements and lobbying contributions are determined as the outcome of bargaining between banks and politicians. We show that bankers and politicians...

We study the political economy of bank capital regulation from a positive and normative perspective. In a general equilibrium setting, capital requirements and lobbying contributions are determined as the outcome of bargaining between banks and politicians. We show that bankers and politicians...