ISBN: 379080004X
TITLE: Contributions to Economics
AUTHOR: Colombo, Driffill

1 Financial Markets and Transition 1
Emilio Colombo, John Driffill
1.1 Introduction 1
1.2 Theoretical Background 1
1.3 Empirical Evidence 5
1.4 Financial Market Imperfections in Eastern Europe 7
1.5 The Aim of this Volume 8
References 10
2 The Order of Financial Liberalisation: Lessons from the Polish Experience 13
John Driffill, Tomasz Mickiewicz
2.1 Introduction 13
2.2 Institutions and Sources of Finance 14
2.3 Privatisation, Restructuring and Enterprise Finance 26
2.4 Conclusions 38
References 39
3 Economic and Financial Transition in Hungary 43
Fabrizio Carmignani
3.1 Introduction 43
3.2 Macroeconomic Developments and Transition Progress 44
3.3 Financial Developments 63
3.4 Issues in Financial Development 75
3.5 Challenges Ahead 88
References 96
4 Endogenous Startups, Financial Conditions, and Capital Accumulation 93
Domenico Delli Gatti, Riccarda Longaretti
4.1 Introduction 93
4.2 The Basic Model 95
4.3 Public Expenditure Financed by Labor Income Taxes 105
4.4 An Open Economy in a Fixed Exchange Rate Regime 108
4.5 Conclusions 111
References 116
5 Wealth Distribution, Occupational Choice and the Behaviour of the Interest Rate 117
Emilio Colombo, Akos Valentinyi
5.1 Introduction 117
5.2 Model Economy 119
5.3 Equilibrium Conditions and Factor Prices 122
5.4 Market Equilibrium Dynamics 124
5.5 Development and Inequality 132
5.6 Some Empirical Evidence in Eastern Europe 133
5.7 Conclusions 134
References 138
6 Financial Instability in the Transition Economies: Lessons from East (Asia) for (East) Europe 139
Marco Lossani, Patrizio Tirelli
6.1 Introduction 139
6.2 Is the Diamond-Dybvig Approach Relevant for Banking Policy in Transition Economies? 141
6.3 The Model 142
6.4 The Social Planner Problem 142
6.5 The Role of the Banking System 144
6.6 Liquidity Requirements as a Means to Preserve Financial Stability 146
6.7 Financial Instability and External Shocks: The Case of Foreign Interest Rate Shocks 149
6.8 Conclusions 151
References 153
7 Foreign Direct Investment in the Banking Sector: Experiences and Lessons from CEECs 155
Luca Papi, Debora Revoltella
7.1 Introduction 155
7.2 FDI in the Banking Sector: Are Transitional Economies Special? 156
7.3 Data on FDI in TE Banking Sectors 160
7.4 Impact of FDI in the Banking Sector 165
7.5 Determinants of FDI Localization in the Banking Sector 171
7.6 Conclusions 175
References 177
8 Corporate Capital Structure in Transition: Evidence from Hungarian and Czech Firms 179
Emilio Colombo, Debom Revoltella
8.1 Introduction 179
8.2 Determinants of Leverage in TES: Theoretical Issues 180
8.3 Data Set and Descriptive Statistics 185
8.4 Empirical Analysis 191
8.5 Conclusions 196
References 196
9 Financing Patterns in Hungary - as Seen from Balance Sheets and from Interviews 199
gnes Csermely, Jnos Vincze
9.1 Introduction 199
9.2 Analysis of Financial Accounts of Companies 200
9.3 Survey Findings 210
9.4 Summary and Lessons 221
References 224
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