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This paper explores the interaction between foreign-debt bailout guarantees, financial supervision and optimal factor taxation. The context is that of a pre-"twin crises" emerging market economy and the analysis is undertaken using an original stylised two-period model based on the insights of the "third-generation" currency crisis literature. Bailout guarantees lead to moral hazard problems as banks monitor less and lend more than is socially desirable. As such, the solution of the government's Ramsey taxation problem under bailouts entails a corrective rationale for capital taxation, implying a higher tax-rate than would otherwise be the case. When complementary regulatory instruments, such as effort-adjusted capital-requirements, are available to government, this capital tax-rate decreases with an increase in supervisory effectiveness. The paper's conclusion is that bailout guarantees should only co-exist with some form of effective banking supervision to ensure that the effects of moral hazard are mitigated, which reinforces the view that emerging economies can signal their financial reputation and also contribute to reducing the risk of future crises only by implementing good governance and effective supervisory procedures in their financial systems. ; N/A

Jorge Braga de Macedo as an Economic Historian: The Transition of the Portuguese Economy from the Authoritarian to the Democratic Period (1960-1979) -- Bagehot for "Followers": How Did the Portuguese Lender of Last Resort Manage the First Post World War I Crisis? -- What's in a Bond? The Value of Portugal or the Financial Origins of the Portuguese Civil War -- A Thirteenth-Century Fiscal Constitution -- Economic History and History of Economics: Complementary Approaches to Portuguese Economic Development -- US Inflation and the Imbalances of the Bretton Woods System 1965 to 1973 -- The Gold Standard and the Euro: Conjoined Twins or Distant Relations? -- A Macro Stabilization Function for the Euro Area -- Towards a Sustainable Eurozone -- Fiscal Governance in the Euro Area: What Kind of Union? -- On the Limits of EU Differentiated Integration: Lessons from the Eurozone crisis and from Brexit -- The Peculiar First Semester of 2012 -- The Krugman-Macedo Diagram Revisited -- Notes on a Peripheral Economy -- Tax, Climate Change and Sustainable Development: Global Problems, Global Solutions? -- International Migration and Social Network Spillovers of Political Norms -- Regulated Early Closures of Coal-Fired Power Plants and Tougher Energy Taxation on Electricity Production: Synergy or Rivalry? -- Measuring What Social Partners Do About Wages Over the Business Cycle -- Selling the View -- A Constitutional Theory of Intergenerational Equity -- International Cooperation in the Age of Populism.