ADEMU Working Papers Series: Recent submissions

  • De Ferra, Sergio; Romei, Federica (2018-05)
    In the aftermath of the global financial crisis, sovereign default risk and the zero lower bound have limited the ability of policy-makers in the European monetary union to achieve their stabilization objective. This paper ...
  • Portes, Richard (2018-04)
    Systemic risk is the risk of collapse of the financial system resulting from inter-linkages, such that the failure of individual entities or the collapse of an individual market can cause a cascading failure. The essence ...
  • Corsetti, Giancarlo; Erce, Aitor; Uy, Timothy (2018-05)
    We study theoretically and quantitatively how official lending regimes affect a government's decision to raise saving as opposed to defaulting, and its implication for sovereign bond pricing by investors. We reconsider ...
  • Hagen, Jürgen von; Chen, Yao (2018-05)
    The sovereign debt crisis in the euro area has shown that sovereign default risk can be a serious issue also in advanced economies. We use a difference-in-difference approach to identify the factors that lead to the crisis ...
  • Ari, Anil; Corsetti, Giancarlo; Dedola, Luca (2018-04)
    Is the seniority structure of sovereign debt neutral for a government’s decision between defaulting and raising surpluses? In this paper, we address this question using a model of debt crises where a discretionary government ...
  • Dmitriev, Mikhail; Hoddenbagh, Jonathan (2018-04)
    We derive the optimal fiscal transfer scheme for countries in a monetary union to off-set the welfare losses resulting from asymmetric shocks and nominal rigidities. Optimal transfers involve a trade-off between reducing ...
  • Huo, Zhen; Ríos Rull, José Víctor (2018-04)
    We study financial shocks to households’ ability to borrow in an economy that quantitatively replicates U.S.earnings, financial, and housing wealth distributions and the main macro aggregates. Such shocks generate large ...
  • Clerc, Laurent; Giovannini, Alberto; Langfield, Sam; Peltonen, Tuomas; Portes, Richard; Scheicher, Martin (2018-04)
    An epidemiologist calculating the risk of a localised epidemic becoming a global pandemic would investigate every possible channel of contagion from the infected region to the rest of the world. Focusing on, say, the ...
  • Abad, Jorge; D'Errico, Marco; Killeen, Neill; Luz, Vera; Peltonen, Tuomas; Portes, Richard; Urbano, Teresa (2018-04)
    This paper provides a unique snapshot of the exposures of EU banks to shadow banking entities within the global financial system. Drawing on a rich and novel dataset, the paper documents the cross-sector and cross-border ...
  • Steinbach, Armin (2018-04)
    While the Court of Justice of the European Union has approved the European financial assistance schemes, the haircut of public creditors appears as a possible next step of escalation in the euro debt crisis. This article ...
  • Hofmann, Herwig C.H. (2018-04)
    In the context of the developing European Economic and Monetary Union (EMU), questions of political and judicial means of control of the bodies central to shaping this policy are of great relevance. This paper looks at how ...
  • Ábrahám, Árpád; Brogueira de Sousa, João; Marimon, Ramon; Mayr, Lukas (2018-04)
    We assess the benefits of a potential European Unemployment Insurance System (EUIS) using a multi-country dynamic general equilibrium model with labour market frictions. Our calibration provides a novel diagnosis of the ...
  • Steinbach, Armin (2018-04)
    In the economic policy domain, calls for insurance-type cooperation within the European Monetary Union (EMU) have frequently been made. Insurance-type cooperation relates to the debate about macroeconomic stabilization ...
  • Ábrahám, Árpád; Cárceles Poveda, Eva; Liu, Yan; Marimon, Ramon (2018-04)
    A Financial Stability Fund set by a union of sovereign countries can improve countries' ability to share risks, borrow and lend, with respect to the standard instrument used to smooth fluctuations: sovereign debt financing. ...
  • Radic, Lazar (2018-04)
    In the present paper I critically asses the Preface to the 2017 Reflection Paper on the Deepening of the Economic and Monetary Union and identify two issues with the European Commission’s approach and reasoning which I ...
  • Rodríguez Mendizábal, Hugo (2018-04)
    This paper presents a new stylized fact about bank nonperforming loans. According to data for the US, the average of the ratio of noncurrent loans to total loans for large banks presents a very high negative correlation ...
  • Steinbach, Armin (2018-04)
    Crisis policy of the ECB has been controversial on the judicial stage between the Court of Justice of the EU (CJEU) and the German Constitutional Court (FCC). While the controversy appears to be settled at this stage ...
  • López-Quiles Centeno, Carolina; Petricek, Matic (2018-04)
    This paper aims to assess the effect of deposit insurance on the risk-taking behaviour of banks. As shown in the theoretical literature, deposit insurance may induce moral hazard and incentivize banks to take on more risk. ...
  • Gehrig, Thomas P.; Levínský, René (2018-04)
    The present study contributes to the ongoing debate on possible costs and benefis of leverage requirements. In particular, we run two series of electronic call auctions with heterogeneous agents in the laboratory where we ...
  • Fornaro, Luca; Romei, Federica (2018-04)
    This paper describes a paradox of global thrift. Consider a world in which interest rates are low and monetary policy cannot stabilize the economy because it is frequently constrained by the zero lower bound. Now imagine ...

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