Pellagra is a disease with a considerable historical background. It was mentioned first in the seventeenth century as occurring in Spain and in 1735 it was described accurately by Gasper Casal. His book was not, however, published until 1762. Figure 1 is a reproduction from this book (Major, 1932). Meanwhile M. Thiery described the disease in the Journal de Medecine, Chirurgiv et Pharmacie (Par...

We analyze the impact of changes in thin capitalization rules on corporations' capital structure. Thin capitalization rules prevent rms from deducting excessive interest expenses from their tax base. As of 2008, Germany has severely changed its thin capitalization rule by targeting interest payments instead of debt to equity ratios. The new rule has primarily been introduced to prohibit tax avo...

This paper develops a real options model of capital structure to understand two distinct roles played by intellectual capital in corporate financing decisions. First, intellectual capital limits a firm’s debt capacity because of its low liquidation value. Second, intellectual capital enhances a firm’s debt capacity through its positive impact on the earnings dynamics. We show that the former is...

Aggregate statistics readily indicate why so many observers of financial markets in the United States are concerned about the balance between debt and equity in the corporate financial decision. Exceeding zero in most years before 1984, net equity issues by U.S. nonfinancial corporations have been negative in each year since. Net redemptions averaged approximately $80 billion annually during th...

Do credit market conditions affect corporate capital structures? In an attempt to answer this question, I study two natural experiments that affect corporate access to bank credit: the 1961 expansion of bank credit due to the emergence of the market for CDs, and the contraction associated with the 1966 credit crunch. I document several capital structure reactions to these changes in credit mark...

ecurring debt problems and high public debt have brought the issue of fiscal sustainability to the foreground in several Central American countries. Although public debt-to-GDP ratios have started to come down in recent years, they still exceed 50 percent in most of the region's countries, making the debt a source of vulnerability that deserves close attention. Over the past three decades, the ...

Using the Reinhart-Rogoff dataset, we find a debt threshold not around 90 per cent but around 30 per cent, above which the median real gross domestic product (GDP) growth falls abruptly. Our work is the first to formally test for threshold effects in the relationship between public debt and median real GDP growth. The null hypothesis of no threshold effect is rejected at the 5 per cent signific...