We add the Bernanke-Gertler-Gilchrist model to a world model consisting of the US, the Eurozone and the Rest of the World in order to explore the causes of the banking crisis. We test the model against linear-detrended data and reestimate it by indirect inference; the resulting model passes the...

Modern macroeconomic models have been widely criticised as relying too much on rationality and market efficiency. However, basically their predictions about this crisis are being borne out by events. "Crashes" are an integral part of an "efficient market" capitalism and are brought on by swings...

Recent work has exposed the extent of EU protectionism within the single market Customs Union. If the UK leaves the EU customs union for unilateral free trade, as a small country within the world market, it will therefore make gains according to the standard trade model. Should it do so, trade...