The COVID-19 crisis paralyzed huge parts of the planet in weeks. It not only infected the population but injected a gargantuan dose of uncertainty into the system. In that regard, as in many others, it is a phenomenon without precedent. As of the time of writing (May-June 2020), we are...

Which countries are most vulnerable to a virus such as COVID-19? Which countries should take the most stringent precautions to prevent the spread of such a virus? The EIB COVID-19 Economic Vulnerability Index covers countries outside the European Union and helps give us an idea of regions that...

What can explain the large changes in aggregate demand that occur in the absence of any seemingly corresponding shock to the underlying state variables of the economy? We show that macroeconomic volatility can arise from dispersions of beliefs among agents. These dispersions give rise to bets...

This inquiry argues that the successful completion of the transition process in the post-Soviet economies is constrained by the prevailing social structure and low levels of technological progress, both of which require institutional reforms aimed at increasing growth in national income,...

This paper provides an explanation for situations in which the state variables describing the economy do not change, but aggregate consumption experiences significant changes. We present a theory of pseudo-wealth--individuals' perceived wealth that is derived from heterogeneous beliefs and...

The concept of risk-sharing in financial and social contracts is one of the unique features of Islamic finance. Many theoretical studies generally claim superiority of an Islamic financial system based on pure equity and participatory modes of financing, while empirical studies provide mixed...

Over the past seventeen years the Brazilian macroeconomic performance has been considerably weaker than in previous decades. Inflation reached unprecedented levels and economic growth declined considerably. Despite the overall perception that macroeconomic performance is closely related to...

Rational agents react to incentives in the market economy as well as in the centrally planned economy. Economic laws are persistent regardless of the economic system. The legislative system changes the outcome of the game between economic agents and managers. The aim of this paper is to show how...