We present a model incorporating both social and economic components, and analyze their interaction. The notion of a social asset, an attribute that has value only because of the social institutions governing society, is introduced. In the basic model, agents match on the basis of income and unproductive attributes. An attribute has value in some equilibrium social institutions (matching patter...

The aim of this study is to investigate the effects of capital structure decisions on firms’ profitability in manufacturing sector in Turkey. The data used in this research corresponds to the financial statements of manufacturing companies collected between 2005 and 2011. Regression analysis was employed by using financial ratios obtained from financial statements of firms within the scope of a...

A balance sheet structure including fixed assets, net working capital and risky long-term debt leads to a model for option pricing of the firm’s equity. Each of the financial components constitutes a source of risk. A hedge based on three distinct options and the stock enables risk neutral valuation and avoids the problems of lack of tradability of the assets and market incompleteness reflected...

We provide a series of results for a standard model where exchange is facilitated by liquid assets. Compared to past work, minimal structure is imposed on the mechanism determining the terms of trade. Four simple axioms lead to a class of mechanisms encompassing common bargaining theories, competitive price taking and other solution concepts. Using only the axioms, we establish existence and (p...

This paper presents a grid-tied microgrid testbed for development and verification of automated energy storage management systems. Different assets in the microgrid including renewable generation, programmable load and a battery unit are introduced. Structure of the communication network to monitor and control the assets is also described in details. Based on the microgrid configuration, a cent...

This paper develops a model of how the financial system is organized to most effectively create safe assets and analyzes its implications for asset prices, capital structure, and macroeconomic policy. In the model, financial intermediaries choose to invest in the lowest risk assets available in order to issue safe securities while minimizing their reliance on equity financing. Although househol...

modeling dependence structure in financial economics is of paramount importance when estimating portfolio’s value at risk, since risk of an asset in addition to its own behavior is also dependent on the behavior of other assets in the portfolio. application of joint distribution copula is one of the methods for incorporation dependence at lower and upper tail of returns’ distribution in financi...

It is now well established that the volatility of asset returns is time varying and highly persistent. One leading model that is used to represent these features of the data is the stochastic volatility model. The researcher may test for non-stationarity of the volatility process by testing for a unit root in the log-squared time series. This strategy for inference has many advantages, but is n...