The paper presents a model of fiscal and monetary policy that evaluates the tradeoff be­ tween higher distortionary labor taxation and higher ination in the resolution of fiscal crises. In the model government debt is domestically held and nominal. Data are presented to show that such debt is now at least as important as external government debt in many key emerg­ ing markets, and that it is a...

This study seeks to examine the extent of influence capital structure towards firm performance in shariah-compliant firms (SCFs) and non-shariah-compliant (NSCFs) Indonesia. Data used are from companies listed Indonesian Stock Exchange. For SCFs, it was Jakarta Islamic Index Sharia while NSCFs that not there. collected 273 SCFs 71 NSCFs. analysis using Mann Whitney, Panel Fixed Effects Regressi...

The purpose of this paper is to show, using a simple two-periods overlapping generations (OLG) model in which goods are produced solely by labor monopolistically competitive industry, that continuous budget deficit necessary maintain full-employment under economic growth driven autonomous technological progress. Since the must be continuous, it should financed seigniorage not public debt. Also ...

Does the maturity of debt matter for productivity? Using data on Italian firms from 1997 to 2015, we study relationship among maturity, productivity, and firm characteristics. We find that productivity is positively associated with short-term negatively long-term debt. This result supports hypothesis less intense monitoring performance fewer liquidation fears stemming long causes a moral hazard...

This paper determines optimal public debt in a life cycle model with incomplete markets that matches the empirically observed variation consumption, labor, and savings. We find savings—not debt—equal to 168 percent of output is optimal, primarily due influence on household decision-making. By inducing lower interest rate, savings slow consumption leisure growth over an average household’s lifet...

In this paper the investment and liquidation policy of a levered firm is analyzed. The possibility of renegotiating the original debt contract is included. It is shown that the shareholders’ option to restructure the outstanding debt exacerbates Myers’ (1977) underinvestment problem. This result is due to a higher wealth transfer from the shareholders to the creditors occurring upon investment ...

In this paper the performance of a sample of German companies is measured by comparing the initially invested capital adjusted for cost of capital, dividends paid, share repurchases and equity raised with the market value at the end of the holding period. All possible holding periods between 1987 and 2000 are covered. The sample is subdivided into companies listed in the DAX-, MDAXand SMAX-inde...

The dynamic transformation of the Polish economy from a centrally planned to market economy is by now well advanced. The transformation has also contributed to a rapid development of the capital market. However, the leveraged buyout market has hardly been developed yet. The leveraged buyout technique allows investors to take companies over with little of their own capital. Most of the total val...

The political geography of central government debt has hardly been investigated. We propose a method for calculating implicit interregional transfers stemming from debt. apply this to Belgium over the 1970-2016 period. share poorer Francophone in debt-financed spending was persistently larger than its revenue used pay resulting interest bills. opposite holds richer Flanders. Also, primary defic...