We present a model of bank passivity and regulatory failure. Banks with low equity positions have more incentives to be passive in liquidating bad loans. We show that they tend to hide distress from regulatory authorities and are ready to offer a higher rate of interest in order to attract...

We present a model of bank passivity and regulatory failure. Banks with low equity positions have more incentives to be passive in liquidating bad loans. We show that they tend to hide distress from regulatory authorities and are ready to offer a higher rate of interest in order to attract...

This paper investigates the possibility that newly emerging equity markets in Central Europe exhibit semi-strong form efficiency such that no relationship exists between lagged values of changes in economic variables and changes in equity prices. We find that such efficiency is characteristic of...

Russia's invasion of Ukraine presents many challenges to the international order. To understand what is at stake, we argue that the nature of the political regime matters to understand this conflict. We propose a classification of three different types of political regimes (empires, nation...

The paper analyzes China's rise, its causes and consequences as well as China's geopolitical strategy. We discuss in particular its meaning in the context of the evolution of the International (dis)order, threatened by nationalist populism. A particularly important question is the effect of...

Scapegoating refers to a social phenomenon whereby members of an aggrieved majority group retaliate against innocent third parties, usually members of vulnerable minority groups. This column uses an experiment set up between May and September 2017 in Eastern Slovakia – where a large Roma...

Casual observation suggests that cultural differences play an important role in business transactions, yet systematic evidence on this relationship is scarce. This paper provides a novel investigation of the effect of cultural distance on multinational firms' decisions to integrate their...

We present a theoretical model of a parliamentary democracy, where party structures, government coalitions and fiscal policies are endogenously determined. The model predicts that, relative to proportional elections, majoritarian elections reduce government spending because they reduce party...