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 belief that some banks are too big to fail became reality during the financial crisis of 2007-2009 when the biggest banks in the United States were bailed out. Since then, big banks have grown much bigger and have become increasingly complex. This development has led to far greater attention on the need to resolve the too-big-to fail-problem. This paper examines the way in which the Federal Deposit Insurance Corporation has resolved troubled banks over time and throughout the various regions of the nation. The paper also examines post-crisis regulatory reform by focusing on the new orderly liquidation authority the Dodd-Frank Act provides to the FDIC to serve as the receiver for big banks whose failure poses a significant risk to the country's financial stability. We assess whether this process will indeed eliminate the too-big-to-fail problem.

An Analysis of Resolving Too-Big-to-Fail Banks Throughout the United States

Many public pension funds face serious funding shortfalls. In fact, more than half of the states currently have public pension funds with funded ratios that are less than 80 percent, a level many prefer. In this paper we examine factors important in explaining the funded ratios of state and local pension funds for public employees. We extend the study of Munnell et al. (2011) by (1) considering additional factors that may affect the funded ratio, (2) using panel data from 2001 to 2013, and (3) using different statistical methods. We demonstrate the importance of using the lagged funded ratio in our regressions to explain the current level of the funded ratio and its impact on the statistical significance of other coefficients.

State Pension Plans for Public Employees: A Rough Road Ahead

/pdf/china-s-emerging-financial-markets-5a5c8i8qty.pdf

China's Emerging Financial Markets

This paper is the first paper to provide a comprehensive review of the US regulatory treatment of a relatively recent and controversial source of funds, namely brokered deposits To do this, we consider the extent to which banks rely on brokered deposits, as well as the impact of these funds on bank performance, bank failures, and bank failure costs We also consider the changes taking place in technologies and how they continue to affect the way banks obtain funds and provide services to their customers Our conclusion is that, without sufficient evidence to the contrary, such deposits should be treated no differently from all other deposits and other purchased funds

https://www.mdpi.com/1911-8074/13/6/130/pdf

Regulatory Restrictions on US Bank Funding Sources: A Review of the Treatment of Brokered Deposits

This article provides a primer on budget deficits from the creation of the federal government. Today federal government spending is 24% of GDP (compared with its historical average of 8.8%), fuelling debt of historic levels. The only effective way to reduce debt levels is to cut entitlement programmes and then set a tax rate sufficient, over the course of the business cycle, to fund government spending.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2064156_code478764.pdf?abstractid=1966616&mirid=1

James R. Barth

Papers

An Analysis of Resolving Too-Big-to-Fail Banks Throughout the United States

State Pension Plans for Public Employees: A Rough Road Ahead

China's Emerging Financial Markets

Regulatory Restrictions on US Bank Funding Sources: A Review of the Treatment of Brokered Deposits

U.S. Debt and Deficits: Time to Reverse the Trend