We build a model of a fixed exchange rate regime with escape clauses and output persistence. In the spirit of the Asian crisis in 1997, persistence in our model arises from inability of the domestic financial institutions to intermediate international credit. Our main message is that since...

Transparency regulation aims at reducing financial fragility by strengthening market discipline. There are however two elementary properties of banking that may render such regulation detrimental. First, an extensive financial safety net may eliminate the disciplinary effect of transparency...

This thesis consists of an introductory chapter and four essays. Each of the four essays utilises a quite different methodology. The first essay considers optimal patent policy when the innovator has the option of keeping the innovation secret. The analysis is conducted under the usual partial...

The performance of the institutional structure protecting intellectual property is a matter of deep concern in determining economic well-being. Unfortunately, economic theory has been of little help in providing straightforward advice for policy-makers, the range of contradictory results...

In 1980 three Finnish companies established a research joint venture as a separate firm in order to develop semiconductors. This enterprise terminated in 1992 when the firm was sold. We study the RJV from the point of view of incomplete contacts, focusing on hold-up problems. Of particular...

Transparency regulation aims at reducing financial fragility by strengthening market discipline. There are however two elementary properties of banking that may render such regulation inefficient at best and detrimental at worst.First, an extensive financial safety net may eliminate the...

For many reasons, payment systems are subject to strong network effects; one of those is the necessity of interoperability among participants. This is often accomplished via standard-setting organizations. The goal of the Single European Payments Area (SEPA) is to establish modern cross-boarder...

We study the effects of investor protection on the cost of external finance, entrepreneurship, and creation of new firms in an equilibrium search model of private capital markets. Besides search frictions, we emphasize moral hazard problems that stem from entrepreneurs' possibilities to...