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Conference Paper
Excessive FDI flows under asymmetric information
Conference Paper
The impact of creditor protection on stock prices in the presence of credit crunches
A Tobin q model of investment is used to show that stronger creditor protection increases the expected level and lowers the variance of stock prices in the presence of credit crunches. There are two main channels through which creditor protection enhances the performance of the stock market: (1) The credit-constrained stock price increases with better protection of creditors; (2) The probability of a credit crunch leading to a binding credit constraint falls with strong protection of creditors. ; The paper tests the predictions of the model by using cross?country panel regressions of stock ...
Working Paper
The impact of creditor protection on stock prices in the presence of credit crunches
Data show that better creditor protection is correlated across countries with lower average stock market volatility. Moreover, countries with better creditor protection seem to have suffered lower decline in their stock market indexes during the current financial crisis. To explain this regularity, we use a Tobin q model of investment and show that stronger creditor protection increases the expected level and lowers the variance of stock prices in the presence of credit crunches. There are two main channels through which creditor protection enhances the performance of the stock market: (1) ...
Conference Paper
Policy implications of demographic change: panel discussion: notes on demographic changes and the welfare state
The flow of unskilled, low-earning migrants to developed countries with a comprehensive social security system, including retirement benefits, has attracted both public and academic attention in recent years. Being relatively low earners, the migrants typically are net beneficiaries of the welfare state in the short run. Therefore, an almost unanimous opposition to migration may arise in the potential host countries.
Working Paper
Capital mobility and the output-inflation tradeoff
Our paper analyses the effects of restrictions on capital mobility on the output-inflation tradeoff. Using a stochastic version of the Mundell-Fleming model, we establish a theoretical presumption that an increase in restrictions on capital mobility should make the tradeoff parameter smaller, that is, a given change in the inflation rate should be associated with smaller movements in output. To measure the extent to which countries restrict capital movements, we construct an index using data from the IMF's Annual Report on Exchange Rate Arrangements and Exchange Restrictions. The estimates of ...