Heterogeneity and Stability: Bolster the Strong, Not the Weak

This paper provides a model of systemic panic among financial institutions with heterogeneous fragilities. Concerns about potential spillovers from each other generate strategic interaction among institutions, triggering a preemption game in which one tries to exit the market before the others to avoid spillovers. Although financial contagion originates in weaker institutions, systemic risk depends critically on the financial health of stronger institutions in the contagion chain. This analysis suggests that when concerns about spillovers prevail, then 1) increasing heterogeneity of institutions promotes systemic stability and 2) bolstering the strong institutions in the contagion chain, rather than the weak, more effectively enhances systemic stability

The trojan horse for the Americanization of Europe? Polish industrial relations towards the EU

This article discusses the implications of EU enlargement eastward for the so-called 'European social model' and the 'Europeanization' of industrial relations. After considering the standpoints of EU bodies, it supports an alternative 'agency-based' perspective. A deeper analysis of the Polish case reveals that not only has enlargement an impact on industrial relations, but conversely industrial relations has a considerable impact on enlargement. A particular asymmetry is detected. In the West, employers strongly promote enlargement and unions (especially in some countries) are increasingly sceptical; in the East, the opposite is the case. This asymmetry increases the risks of American-style fragmentation of European industrial relations