Browsing by Author "Takalo, Tuomas"

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  • Hyytinen, Ari; Takalo, Tuomas (2003)
    Suomen Pankin keskustelualoitteita 25/2003
    Published in Economic Notes, 33, 2004: 257-273
    The banking system is known to be vulnerable to self-fulfilling crises that are caused by depositors coordination failure.We show that transparency regulation may prevent certain types of systemic crises by eliminating the possibility of the coordination failure. Key words: bank transparency, financial stability, disclosure regulation JEL classification numbers: G21, G28
  • Takalo, Tuomas (2014)
    Suomen Pankki. Blogi
    Talouskasvusta toivotaan ratkaisua Suomen julkisen talouden ongelmiin. Laajan taloustieteellisen tutkimuksen mukaan innovaatiotoiminnalla on keskeinen rooli hyvinvoinnin ja talouskasvun edistämisessä. Julkisen vallan aktiivinen innovaatiopolitiikka on perusteltua, koska muuten yksityinen sektori investoisi innovaatiotoimintaan vähemmän kuin olisi yhteiskunnan kannalta toivottavaa. Tämä johtuu innovaatiotoiminnan positiivisista ulkoisvaikutuksista ja rahoitusmarkkinoiden epätäydellisyyksistä.
  • Hasan, Iftekhar; Martikainen, Emmi; Takalo, Tuomas (2014)
    Bank of Finland Research Discussion Papers 20/2014
    Published in Journal of Payments Strategy & Systems, Volume 8, Number 4, 2014: 395-406 - Special issue on the future of retail payments in Europe
    In this article we first document the evidence showing how an efficient retail payment infrastructure enhances economic performance. We then review the policy tools available to promote efficient retail payments in Europe. We argue that while SEPA is an important policy initiative that harmonizes payment methods across the EU, it alone is not enough. Vigorous competition and consumer protection policies as well as direct interventions discouraging large value cash payments would be particularly attractive policy tools as they would put no strain on stretched government budgets. JEL classification: G21, G28 Keywords: Retail payment, SEPA, competition, consumer protection, economic performance
  • Takalo, Tuomas (2013)
    Bank of Finland Research Discussion Papers 1/2013
    Published in Journal of Reviews on Global Economics, Volume 1, 2012, Pages 157-167
    Economic interest in innovation policy largely arises from the fundamental importance of innovation to social welfare and from inefficiencies in innovation in a competitive market environment. As a result, a wide variety of public innovation policies are used in practice. This study reviews the economic justifications for public innovation policies and compares the existing policy tools, paying particular attention to the Finnish innovation policy environment. Key Words: Innovation policies, innovation, R&D, incentives, market failures JEL Classification: O38, O34, O31, G28, H25
  • Takalo, Tuomas (2019)
    Journal of Banking Regulation 4 ; December
    The regulation of short-term consumer credit markets is heatedly debated around the world. This article uses economic research as a basis for a qualitative assessment of the regulation of the short-term consumer credit market and discusses the experience of the recent regulations implemented in Finland. According to research, the interest rate ceiling is an inefficient way of regulating the short-term consumer credit market. In contrast, the regulations should be based on price transparency and results from behavioral economics.
  • Tukiainen, Janne; Takalo, Tuomas; Hulkkonen, Topi (2018)
    Bank of Finland Research Discussion Papers 15/2018
    Published in European Journal of Political Economy, Volume 58, June 2019: 50-63
    We exploit a regression discontinuity design to provide causal evidence of the relative age effect (RAE) on a long-run adult age outcome: Political selection. We find strong evidence of the RAE in politics in Finland. However, the effect is heterogeneous: We find that male candidates born early in the calendar year have a significantly higher probability of getting elected to the parliament but no similar RAE applies to female candidates nor to municipal elections. Moreover, this effect only takes place in the most competitive parliamentary districts and is present only for some parties. We also find that in all the groups where the RAE does not exist, early-born candidates are under-represented suggesting attrition of talent in the candidate placement. Overall, our results show that seemingly artificial cutoffs imposed by the government have persistent consequences even on the selection to the highest positions of power within a society.
  • Tukiainen, Janne; Takalo, Tuomas; Hulkkonen, Topi (2019)
    European Journal of Political Economy June
    Published in Bank of Finland Research Discussion Papers 15/2018 http://urn.fi/URN:NBN:fi:bof-201808081924
    We exploit a regression discontinuity design to provide causal evidence of the relative age effect (RAE) on a long-run adult age outcome: Political selection. We find strong evidence of the RAE in politics in Finland. However, the effect is heterogeneous: We find that male candidates born early in the calendar year have a significantly higher probability of getting elected to the parliament but no similar RAE applies to female candidates nor to municipal elections. Moreover, this effect only takes place in the most competitive parliamentary districts and is present only for some parties. We also find that in all the groups where the RAE does not exist, early-born candidates are under-represented suggesting attrition of talent in the candidate placement. Overall, our results show that seemingly artificial cutoffs imposed by the government have persistent consequences even on the selection to the highest positions of power within a society.
  • Haavio, Markus; Ripatti, Antti; Takalo, Tuomas (2016)
    Bank of Finland Research Discussion Papers 12/2016
    ​We build a dynamic stochastic general equilibrium model, where the balance sheets of both banks and non-financial firms play a role in macro-financial linkages. We show that in equilibrium bank capital tends to be scarce, compared with firm capital. We study public funding of banks and firms in times of crisis. Government capital injections can be useful as a shock cushion, but they distort incentives. Small capital injections benefit banks more than firms but the relative benefit is declining in the injection size. Government should first recapitalize banks, and if resources are large enough, lend to firms too.
  • Magnus, Blomkvist; Korkeamäki, Timo; Takalo, Tuomas (2020)
    Bank of Finland Research Discussion Papers 15/2020
    We propose a rationale for why firms often return to the equity market shortly after their initial public offering (IPO). We argue that hard to value firms conduct smaller IPOs, and that they return to the equity market conditional on positive valuation signal from the stock market. Thus, information asymmetry is not a necessary condition for staged financing. We find strong support for these arguments in a sample of 2,143 U.S. IPOs between 1981-2014. Hard to value firms conduct smaller IPOs, and upon positive post-IPO returns, they tend to return to the equity market quickly, following the IPO.
  • Stenbacka, Rune; Takalo, Tuomas (2019)
    Journal of Financial Stability April
    Published in Bank of Finland Discussion Paper 2/2016 http://urn.fi/URN:NBN:fi:bof-201603021033
    We establish that the effect of intensified deposit market competition, measured by reduced switching costs, on the probability of bank failures depends critically on whether we focus on competition with established customer relationships or competition for the formation of such relationships. With inherited customer relationships, intensified competition due to lower switching costs destabilizes the banking market, whereas it stabilizes the market if we focus on competition for the formation of customer relationships. We characterize the factors important for evaluating the effects of intensified competition on stability in a market with unattached as well as locked-in depositors.
  • Stenbacka, Rune; Takalo, Tuomas (2016)
    Bank of Finland Research Discussion Papers 2/2016
    Published in Journal of Financial Stability 41 ; April ; 2019 ; https://doi.org/10.1016/j.jfs.2018.12.001
    We establish that the effect of intensified deposit market competition, measured by reduced switching costs, on the probability of bank failures depends critically on whether we focus on competition with established customer relationships or competition for the formation of such relationships. With inherited customer relationships, intensified competition (i.e., lower switching costs) destabilizes the banking market, whereas it stabilizes the banking market if we shift our focus to competition for the formation of customer relationships. These findings imply that the proportion between new and locked-in depositors is decisively important when determining whether intensified competition destabilizes the banking market or not.
  • Takalo, Tuomas (2020)
    Journal of the Finnish Economic Association 1
    Published in BoF DP 15/2019 http://urn.fi/URN:NBN:fi:bof-201909061438
    I calibrate switching cost for the Finnish retail deposit market by using the approach developed by Oz Shy (2002). It turns out that switching costs faced by deposit customers of the main Finnish banks manifest large variation and are high, ranging from 200 euros to nearly 1,400 euros. Over a 20-year period, switching costs have increased by roughly 50% in real terms, but in relation to average account balance, switching costs have not essentially changed. Changes and differences in the banks’ competitive strategies might explain the variation in switching costs across time and banks.
  • Takalo, Tuomas (2019)
    Bank of Finland Research Discussion Papers 15/2019
    Published in Journal of the Finnish Economic Association 2020 ; 1 https://www.taloustieteellinenyhdistys.fi/journal-of-finnish-economic-association-1-2020/
    I calibrate switching cost for the Finnish retail deposit market by using the approach developed by Oz Shy (2002). It turns out that switching costs faced by deposit customers of the main banks are high, ranging from 200 euros to nearly 1,400 euros. Over the past 20 years, switching costs have increased by roughly 50% in real terms, but in relation to average account balance, switching costs have not essentially changed. I conjecture that differences in the switching costs among the Finnish banks might be explained by differences in their loyalty programs.
  • Niinimäki, Juha-Pekka; Takalo, Tuomas; Kultti, Klaus (2006)
    Bank of Finland Research Discussion Papers 1/2006
    Published in Finnish Economic Papers, Volume 20, No. 2, 2007, Pages 91-107
    This paper studies how comparing can be used to provide information in financial markets in the presence of a hidden characteristics problem.Although an investor cannot precisely estimate the future returns of an entrepreneur's projects, the investor can mitigate the asymmetric information problem by ranking different entrepreneurs and financing only the very best ones.Information asymmetry can be eliminated with certainty if the number of compared projects is sufficiently large.Because comparing favours centralised information gathering, it creates a novel rationale for the establishment of a financial intermediary.Key words: asymmetric information, banking, corporate finance, financial intermediation, ranking, venture capital JEL classification numbers: G21, G24
  • Korkeamäki, Timo; Takalo, Tuomas (2012)
    Bank of Finland Research Discussion Papers 24/2012
    We study the value of innovation in a case study of one of the most visible innovative products in recent years, Apple s iPhone. The value effects of news announcements, patent publications, and trademarks relating to iPhone are taken into account. Our estimate of the lower bound on the value of iPhone is fairly high, 30 billion U.S. (event-day) dollars or 10% to 13% of the firm s market cap (at the end of 2009). We find that patentable technology explains about 25% of the total value, which derives from market reactions to publication of patent applications rather than grants. We also observe a weak negative reaction among Apple s rivals to news about iPhone. Apple appears to capture most of the value within the iPhone supply chain.
  • Takalo, Tuomas; Tanayama, Tanja; Toivanen, Otto (2017)
    Bank of Finland Research Discussion Papers 30/2017
    We conduct a welfare analysis of R&D subsidies and tax credits using a model of innovation policy in corporating externalities, limited R&D participation and finanial market imperfetions. We estimate the model using R&D projet level data from Finland. The optimal R&D tax credit rate (0.24) is lower than the average R&D subsidy rate (0.36). The intensive, not the extensive margin of R&D is important for poliy. Tax credits and subsidies inrease R&D investments and spillovers compared to laissez-faire but to levels below the first best. R&D support policies don't improve welfare.