Is public expenditure productive

Legal and accounting reform that strengthens creditor rights, contract enforcement, and accounting practices boosts financial development and accelerates economic growth. Levine, Loayza, and Beck evaluate: Whether the level of development of financial intermediaries exerts a casual influence on economic growth. Whether cross-country differences in legal and accounting systems (such as creditor rights, contract enforcement, and accounting standards) explain differences in the level of financial development. Using both traditional cross-section, instrumental-variable procedures and recent dynamic panel techniques, they find that development of financial intermediaries exerts a large causal impact on growth. The data also show that cross-country differences in legal and accounting systems help determine differences in financial development. Together, these findings suggest that legal and accounting reform that strengthens creditor rights, contract enforcement, and accounting practices boosts financial development and accelerates economic growth. This paper - a product of Macroeconomics and Growth, Development Research Group - is part of a larger effort in the group to understand the links between the financial system and economic growth. Thorsten Beck may be contacted at tbeck@worldbank.org.

Financial Intermediation and Growth: Causality and Causes

http://faculty.haas.berkeley.edu/ross_levine/Papers/2000_JME_Fin%20Int%20Growth%20Causality.pdf

Financial intermediation and growth: Causality and causes ☆

The ultimate ownership of Western European corporations

In the last decade, economists have produced a considerable body of research suggesting that the historical origin of a country's laws is highly correlated with a broad range of its legal rules and regulations, as well as with economic outcomes. We summarize this evidence and attempt a unified interpretation. We also address several objections to the empirical claim that legal origins matter. Finally, we assess the implications of this research for economic reform.

/pdf/the-economic-consequences-of-legal-origins-3phhiol1rf.pdf

The Economic Consequences of Legal Origins

The Great Financial Crisis of 2007-2010: The Sinners and Their Sins (George G Kaufman) The Costs of the 2007-2009 Financial Crisis (Harvey Rosenblum) The US Financial Crisis and the Great Recession: Counting the Costs (Gillian G H Garcia) US Housing Policy and the Financial Crisis (Peter J Wallison) Playing for Time: The Fed's Attempt to Manage the Crisis as a Liquidity Problem (Robert A Eisenbeis and Richard J Herring) Japan's Financial Regulatory Responses to the Global Financial Crisis (Kimie Harada, Takeo Hoshi, Masami Imai, Satoshi Koibuchi, and Ayako Yasuda) Regulatory Response to the Financial Crisis in Europe: Recent Developments (2010-2013) (Santiago Carbo-Valverde, Harald A Benink, Tom Berglund, and Clas Wihlborg) Regulatory Change in Australia and New Zealand Following the Global Financial Crisis (Christine A Brown, Kevin T Davis, and David G Mayes) The Dodd Frank Act: Systemic Risk, Enhanced Prudential Regulation, and Orderly Liquidation (George G Kaufman and Richard W Nelson) The Trade Execution and Central Clearing Requirements of Dodd-Frank Title VII: Transparency, Risk Management and Financial Stability (Robert S Steigerwald) A Primer on Dodd-Frank's Title VIII (Colleen Baker) Macroliquidity: Selected Topics Related to Title XI of the Dodd-Frank Act of 2010 (Walker F Todd) The Dodd-Frank Act: Key Features, Implementation Progress, and Financial System Impact (James R Barth, Apanard (Penny) Prabha, and Clas Wihlborg) Hair of the Dog That Bit Us: The Insufficiency of New and Improved Capital Requirements (Edward J Kane) Misdiagnosis: Incomplete Cures of Financial Regulatory Failures (James R Barth, Gerard Caprio Jr and Ross Levine) Path-Dependent Monetary Policy in the Post-Financial Crisis Era of Dodd-Frank (Harvey Rosenblum) Bank Crisis Resolution and the Insufficiency of Fiscal Backstops: The Case of Spain (Santiago Carbo-Valverde and Maria J Nieto)

The first great financial crisis of the 21st century : a retrospective

Natural disasters are not rare and costless events. Indeed, the evidence indicates there has been an acceleration in the number of disasters and the associated costs over the past century. Such disasters can cause severe property damage in the communities affected. Typically, insurance policies and government disaster relief fail to cover the full amount of damages. In this case, banks can play an important supporting role in providing additional funding for the necessary reconstruction that takes place after disasters. We provide evidence that following natural disasters, banks with branches in the affected areas raise both deposit and loan rates, but the latter more than the former so that net interest margin increases. This, in turn, leads to an increase in return on assets for such banks, but not sufficiently large enough to indicate profiteering. At the same time, banks increase the use of brokered deposits after natural disasters to help fund the increased demand for loans by individuals and firms in affected communities. Thus banks located in the disaster-prone areas contribute to helping communities recover from natural disasters.

Banks and Natural Disasters

This paper consists of four short pieces on the subprime mortgage market. Based upon a proprietary database, LoanPerformance, of 80 million mortgage loans originated from January 1999 to July 2007, these pieces demonstrate: (1) the subprime loan market has contributed to a net gain in homeownership; (2) the distinction between subprime and prime borrowers cannot be easily made on the basis of FICO scores and the wide variety of products used by subprime borrowers are also used by prime borrowers; and (3) foreclosures on subprime mortgage loans that are fixed-rate, variable-rate, and hybrids with interest-rate resets are already a serious problem, which means that while hybrids may exacerbate mortgage problems if interest rates reset upwards in 2008 and 2009, the product itself is not the cause of those problems.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1091617_code478764.pdf?abstractid=1070404

Perspectives on the Subprime Mortgage Market

/pdf/china-after-the-global-financial-crisis-4i3x7ff8ul.pdf

China after the Global Financial Crisis

This study investigates the relationship between local culture, as measured by religiosity, and dividend payouts based on a sample of 155 Italian firms over the period 2000–2016, yielding 2...

James R. Barth

Papers

The first great financial crisis of the 21st century : a retrospective

Banks and Natural Disasters

Perspectives on the Subprime Mortgage Market

China after the Global Financial Crisis

Does religiosity affect the dividend payouts of Italian-listed companies?