â  monetary policy rule is an approach to avoid time inconsistency problem as regarded by new classical economist to choose a time plan for policy making in order to maximize households’ well-being. the foundation of time inconsistency problem is not coincidence of expectations as an ex-ante variable, which is expected variable, with actual variable as an ex-post variable. expectations in fin...

Related DatabasesWeb of Science You must be logged in with an active subscription to view this.Article DataHistorySubmitted: 14 September 2020Accepted: 05 October 2021Published online: 21 December 2021Keywordstime-inconsistency, rough volatility, functional Itô calculus, mean-variance portfolio selection, Volterra Heston modelAMS Subject Headings91G80, 91A80, 60G22, 60H20Publication DataISSN (o...

Financial covenants influence firm behavior by state-contingently allocating decision rights. I develop a quantitative model with long-term debt where shareholders cannot commit to not dilute existing lenders new issuances. Lenders intervene on covenant violations but either any restructuring plan ex ante. Counterfactual experiments suggest that financial significantly reduce default probabilit...

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rationality, based on economic system of capitalism to explain phenomenon is based on self-interest. one important phenomenon from the perspective of the new classical school of macroeconomic, kydlnd and prescott (1977), the winners of the 2004 nobel prize in economics is, time inconsistency. time inconsistency ,is a condition that will cause a decision (by households, firms, or scheduler), whi...