| EconPol Policy Brief
Advances in total factor productivity (TFP) are important for sustaining economic growth in modern economies, in particular in the face of a declining working-age population. In this Policy Brief, we identify investment in research and development, good governance, the capital intensity, a high share of information technology in the total capital stock, and the number of industrial robots per employee as conducive for TFP growth. Based on the empirical results, policies that are beneficial for capital formation in general, investment in computer technology, research and development as well as the use of industrial robots could boost TFP in Europe. ...Details
| EconPol Working Paper
Traditional retail banking (and, by default, shadow banking) is built on four pillars: SME lending, access to public liquidity, deposit insurance, and prudential supervision. But many shadow financial institutions (money market mutual funds, hedge funds and investment banks) gained access to public liquidity facilities during the 2008 crisis. In this working paper, EconPol expert Jean Tirole and his co-author Emmanuel Farhi, ask whether, in the light of recent developments, it is time to reconsider the time-honored SME lending/regulation/ public liquidity access/ deposit insurance quadrilogy? ...Details
| EconPol Working Paper
Over the past decade major regulatory changes in the US and Europe to promote competition among trading venues have made today’s financial markets more fragmented and complex than ever. Information technology, infrastructure enhancement, and arbitrage strategies all help to link trading venues. This EconPol Working Paper, co-authored by EconPol researcher Sophie Moinas, uses a two-venue duopoly model involving strategic risk-averse market-makers to explore a new cross-market linking channel: the interdependence of liquidity providers' inventory costs. ...Details