The Impact of Banking Development on the Size of the Shadow Economy

This paper employs data on 119 countries for the period 1999/2000 to 2004/2005 to examine the impact of banking development on the size of shadow economies. The main results indicate that an improvement in the development of the banking sector is associated with a smaller shadow economy in a wide cross-section of countries. In addition, both depth and efficiency of the banking sector matter equally in reducing the size of a shadow economy. These stylized results are robust under a variety of specifications and controls for simultaneity bias.Shadow Economy, Banking Development.

Financial Development, Financing Choice and Economic Growth

In an overlapping generations economy households (lenders) fund risky investment projects of firms (borrowers) by drawing up loan contracts on the basis of asymmetric information. An optimal contract entails either the issue of only debt or the issue of both debt and equity according to whether a household faces a single or a double enforcement problem as a result of its own decision about whether or not to undertake costly information acquisition. The equilibrium choice of contract depends on the state of the economy which, in turn, depends on the contracting regime. Based on this analysis, the paper provides a theory of the joint determination of real and financial development with the ability to explain both the endogenous emergence of stock markets and the complementarity between debt finance and equity finance.asymmetry of information, economic growth, financial markets, stock markets development

Public Expenditures, Bureaucratic Corruption and Economic Development

This paper presents a dynamic general equilibrium analysis of public sector corruption and economic growth. In an economy with government intervention and capital accumulation, state-appointed bureaucrats are charged with the responsibility for procuring public goods which contribute to productive efficiency. Corruption arises because of an opportunity for bureaucrats to appropriate public funds by misinforming the government about the cost and quality of public goods provision. The incentive for each bureaucrat to do this depends on economy-wide outcomes which, in turn, depend on the behaviour of all bureaucrats. We establish the existence of multiple development regimes, together with the possibility of multiple, frequency-dependent equilibria. The predictions of our analysis accord strongly with recent empirical evidence on the causes and consequences of corruption in public office.

FinRED: A Dataset for Relation Extraction in Financial Domain

Relation extraction models trained on a source domain cannot be applied on a different target domain due to the mismatch between relation sets. In the current literature, there is no extensive open-source relation extraction dataset specific to the finance domain. In this paper, we release FinRED, a relation extraction dataset curated from financial news and earning call transcripts containing relations from the finance domain. FinRED has been created by mapping Wikidata triplets using distance supervision method. We manually annotate the test data to ensure proper evaluation. We also experiment with various state-of-the-art relation extraction models on this dataset to create the benchmark. We see a significant drop in their performance on FinRED compared to the general relation extraction datasets which tells that we need better models for financial relation extraction.Comment: Accepted at FinWeb at WWW'2

Information, Imitation and Growth ¤

This paper presents an analysis of the role of information in determining the growth and development prospects of economies. In an overlapping generations model, producers of capital choose between two types of technology - safe and risky. Depending on the information available, decision making may or may not be characterised by herd behaviour whereby each producer imitates the decisions of others in an information cascade. Multiple development regimes arise when the quality of information is determined endogenously through purposeful, but costly, activities. It is shown that both the prospect of transition between these regimes and the characteristics of the transition path can be very dierent in imitation-free and imitation-prone economies