This paper reviews a considerable number of cases concerning the application of State aid rules to the EU banking sector. The relevance of the financial crisis which hit the lending industry in the '90s determined the Commission to a significant number of State aid reviews of national measures...

Directly subsidizing bank deposits increases franchise value and promotes prudent lending. Subsidization can be made budget-neutral for the regulator by requiring banks to make upfront payments equal to the capitalized value of future subsidies they stand to receive. While compensating the...

One of the principal determinants of an asset's return is its liquidity - the ease with which the asset can be bought and sold. Liquid assets yield a lower return than do otherwise comparable illiquid assets. This Article demonstrates that an income tax alters the tradeoff between asset...

The issue of greenhouse gas (GHG) stabilization stands on three critical open questions. Namely, what are the impacts deriving from different levels of climate change and their distribution. What are the levels at which GHG concentration should be stabilized in order to avoid unacceptable...

This paper analyzes the impact of pollution and abatement policy within a stochastic endogenous growth model. The agents have environmental preferences, but they neglect their individual contribution to aggregate abatement. Therefore, environmental care is done by the government and financed via...

Trade liberalization is no Pareto-improvement - there are winners (high-skilled) and losers (low-skilled). To compensate the losers the government is assumed to introduce unemployment benefits (UB). These benefits are financed by either a wage tax, a payroll tax, or a profit tax. Using a...

The contribution of this paper is to derive an optimal redistribution scheme for trade gains in the case of a government's objective function that explicitly accounts for the equity-efficiency trade-off. The government pays unemployment benefits (UB) either financed by a wage tax, a payroll tax...

We illustrate a novel informational feature of education, which the government may utilize. Discretionary decisions of individuals to acquire education may serve as an additional signal (to earned labor income) on the underlying unobserved innate earning ability, thereby mitigating the...

Democratic countries with substantial inequality and where people believe that success depends on connections and luck induce political support for high tax rates and generous welfare states. Traditional wisdom is that such policies harm the economy, but there is not much evidence that countries...

The paper examines the scope for mutually beneficial intergenerational cooperation, and looks at various attempts to theoretically explain the emergence of norms and institutions that facilitate this cooperation. After establishing a normative framework, we examine the properties of the...