We study the impact of nancing constraints on investment and output dynamics, in a continuous time setting with output a linear function of capital. Decline of net worth reduces investment and, if rms can rent capital to unconstrained outside investors, can create a `net worth trap' with both investment and output falling below normal levels for long time periods. We provide a detailed account ...

We develop an overlapping generations model with re-tradeable paper assets and capital accumulation to analyze the interaction between the real economy and an international asset market. The world consists of two homogeneous countries, which differ only in their initial levels of capital. Consumers who live for two periods transfer wealth over time and across countries by holding international ...

The paper analyzes the effects of financial liberalization on inflation. We develop a monetary and endogenous growth, dynamic general equilibrium model of a small open semi-industrialized economy, with financial intermediaries subjected to obligatory ”high” reserve ratio, serving as the source of financial repression. When calibrated to four Southern European semi-industrialized countries, name...

The intention of this paper is to examine the impact of the inflation rate on the performance of the Egyptian stock market. Particular attention is paid to the effects of the rate of inflation on various stock market performance variables, in terms of market activity and market liquidity. From the co-integration analysis through error correction mechanisms Ž . ECM , significant long-run and sho...

We explore how general economic conditions impact defaults and major credit rating changes by fitting reduced-form Cox intensity models with a broad range of macroeconomic and firm-specific ratings-related variables. For all corporate issuers in the period 1981 2002 we find both types of factors strongly influenced the risk of a credit event. However, while the effects of ratings-related factor...

Many stockholders irrationally believe that high recent market returns predict high future market returns. I argue that the presence of these extrapolative investors can help resolve the equity premium puzzle if the elasticity of intertemporal substitution (EIS) is greater than unity. Extrapolators’ overreaction to dividend news generates countercyclical expected returns. Rational investors res...

This paper revisits the time-series relation between the conditional risk premium and variance of the equity market portfolio. The main innovation is that we construct a measure of the ex ante equity market risk premium using corporate bond yield spread data. This measure is forward-looking and does not rely critically on either realized equity returns or instrumental variables. We find strong ...

This paper presents two dynamic models of the economy in which credit constraints arise because creditors cannot force debtors to repay debts unless the debts are secured by collateral. The credit system becomes a powerful propagation mechanism by which the effects of shocks persist and amplify through the interaction between collateral values, borrowers' net worth and credit limits. In particu...

Anthropology NewsVolume 62, Issue 1 p. e1-e44 January/February Online ContentFree to Read 2021 Print Issue: Genetics First published: 09 March https://doi.org/10.1111/AN.1592AboutPDF ToolsRequest permissionExport citationAdd favoritesTrack citation ShareShare Give accessShare full text full-text accessPlease review our Terms and Conditions of Use check box below share version article.I have rea...

Sovereign debt crises involve restructurings characterized by a mix of face value haircuts and maturity extensions. The prevalence extensions has been hard to reconcile with economic theory. We develop model endogenous restructuring that captures key facts sovereign episodes. While dilution pushes for negative extensions, three factors are important in overcoming the effects generating upon res...