Is the stock market boom a result of the baby boom? This paper develops an overlapping generations model in which a baby boom is modeled as a high realization of a random birth rate, and the price of capital is determined endogenously by a convex cost of adjustment. A baby boom increases national saving and investment and thus causes an increase in the price of capital. The price of capital is ...

We analyse the incentive impact of bank capital regulation in a model with endogenous capital, assuming regulators randomly audit banks and require undercapitalised banks either to bear the fixed cost of new issue or to liquidate. Forward looking banks with sufficient franchise value maintain a buffer of capital in excess of the regulatory minimum. In our dynamic setting we show, amongst other ...

Is the stock market boom a result of the baby boom? This paper develops an overlapping generations model in which a baby boom is modeled as a high realization of a random birth rate, and the price of capital is determined endogenously by a convex cost of adjustment. A baby boom increases national saving and investment and thus causes an increase in the price of capital. The price of capital is ...

We use the HOS model of international trade to find a link between trading costs and pattern of trade, not just its effect on volume of trade. We prove that higher trading costs in labor-abundant countries will restrict volume of world trade by working against factor endowment bias and conversely for the capital-abundant nation. Asymmetric trading cost between goods may have paradoxical output ...

The solvency standards implicit in bank capital levels, as reported eg in Jackson et al (2002), are much higher than those required for top ratings, if standard single period economic capital models are taken seriously. We explain this excess capital puzzle by forward looking rating targeting behaviour by banks, which aims at maintaining rating above a minimum target in future periods. We calib...

background and objective : to resource allocating at national levels as results of productivity, cost calculation helps to determine the size of the problem and revealed cost benefits of injury prevention and it can also ensure the better resource using and cost benefit assessment. this study was conducted to determine the method of calculating road traffic injuries cost. materials and methods:...

We explore the asset pricing implications of an investment-based model that features a stochastic technology frontier and costly technology adoption. Firms adopt the latest technology embodied in new capital to reach a stochastic technology frontier, but this decision entails an adoption cost. The model predicts that old capital firms are more risky and hence offer a higher returns than young c...

Changes in productivity due to technological progress or regress are incorporated in models of data envelopment analysis (DEA) in two ways: either through a network technology or in terms of a capacity variable or capital input embodying technical progress. The second way is analyzed here in terms of time-varying capital inputs due to the changes in input prices over time. This provides an opti...