Now showing items 1-5 of 5
International Endogenous Growth, Macro Anomalies, and Asset Prices
"This paper studies a two-country production economy with complete and frictionless financial markets and international trade in which competition in R&D leads to endogenous new firm creation and economic growth. Current ...
Leaning Against the Wind: Debt Financing in the Face of Adversity
We offer evidence of a new stylized feature of corporate financing decisions: the tendency of managers to rely more on debt financing when earnings prospects are poor. We term this 'leaning against the wind' and consider ...
The Intended and Unintended Consequences of Financial-Market Regulations: A General Equilibrium Analysis
In a production economy with trade in financial markets motivated by the desire to share labor-income risk and to speculate, we show that speculation increases volatility of asset returns and investment growth, increases ...
Investment-Specific Shocks, Business Cycles, and Asset Prices
We introduce long-run investment productivity risk in a two-sector production economy to explain the joint behavior of macroeconomic quantities and asset prices. Long-run productivity risk in both sectors, for which we ...
Optimal Consumption and Portfolio Choice with Loss Aversion
This paper analyses the consumption-investment problem of a loss averse investor equipped with s-shaped utility over consumption relative to a time-varying reference level. Optimal consumption exceeds the reference level ...