This paper presents a general equilibrium model with endogenous collateral constraints to study the relationship between financial development and business cycle fluctuations in a cross-section of economies with different sizes of their financial sector. The financial sector can amplify or...

The financial sector allows a better allocation of capital compared to autarchy, increasing the aggregate technology and thus the income growth rate of the economy. At the same time, however, it also amplifies the business cycles through the financial accelerator which increases the volatility...

This paper presents a general equilibrium model with endogenous collateral constraints to study the relationship between financial development and business cycle fluctuations in a cross-section of economies with different sizes of their financial sector. The financial sector can amplify or...

This paper analyzes the effects of managerial compensation and reputation concerns on earnings manipulation. I develop a model of earnings reporting in which a privately informed manager trades-off incentives to manipulate earnings which increases his compensation against incentives to be honest...

This paper presents a general equilibrium model with endogenous collateral constraints to study the relationship between financial development and business cycle fluctuations in a cross-section of economies with different sizes of their financial sector. The financial sector can amplify or...

In classical perfect and complete markets, prices form a Martingale and stock returns (or equivalently, successive price changes) are serially uncorrelated. However, there is considerable evidence in the finance literature showing that stock returns are serially correlated both in the short and...

Mark-to-market accounting, as required by FAS No. 157, has been implicated as a contributor to the financial meltdown caused by the housing crisis and the consequent write-down of securities backed by mortgages (MBS) and collateralized debt obligations (CDO). In this paper, we investigate the...

This paper presents a model of auditor-client relationship-building. Existing literature suggests that quasi-rents rising from long auditor tenure have a negative effect on auditor independence. In contrast to this conventional wisdom, our paper shows a positive effect of quasi-rents resulting...

The most prevalent forecasts of firms' long-term earnings issued by analysts are two-year-ahead earnings per share (EPS) estimates. When introduced by analysts, two-year-ahead EPS estimates set market expectations for firms' future earnings. Subsequent revisions to these estimates are highly...