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Hamlet without the Prince of Denmark: Relationship banking and conditionality lending in the London market for government debt, 1815-1913

Flandreau, Marc; Zendejas, Flores; Huitzilihuitl, Juan - C.E.P.R. Discussion Papers - 2010

This paper offers a theory of conditionality lending in 19th-century international capital markets. We argue that ownership of reputation signals by prestigious banks rendered them able and willing to monitor government borrowing. Monitoring was a source of rent, and it led bankers to support...

Persistent link: https://www.econbiz.de/10008554223

Black Man’s Burden: Measured Philanthropy in the British Empire, 1880-1913

Accominotti, Olivier; Flandreau, Marc; Rezzik, Riad; … - C.E.P.R. Discussion Papers - 2008

Ferguson and Schularick (2006) recently provided a measure of the effect of Empire subjection on borrowing countries’ interest rates. They find this effect to be large and significant, ranging between 80 to 180 basis points. We argue that their methodology is inadequate and that their...

Persistent link: https://www.econbiz.de/10005666472

Crises and Punishment: Moral Hazard and the Pre-1914 International Financial Architecture

Flandreau, Marc - C.E.P.R. Discussion Papers - 2003

remedies that were commonly applied one century ago and find that the international financial world was fairly similar to the …

Persistent link: https://www.econbiz.de/10005791208

Monetary Union, Trade Integration, and Business Cycles in 19th Century Europe: Just Do It

Flandreau, Marc; Maurel, Mathilde - C.E.P.R. Discussion Papers - 2001

This Paper seeks to trace the impact of monetary arrangements on trade integration and business cycle correlation, focusing on Europe in the late 19th century period as a guide for modern debates. For this purpose, we first estimate a gravity model and show that monetary arrangements were...

Persistent link: https://www.econbiz.de/10005791820

Caveat Emptor: Coping With Sovereign Risk Without the Multilaterals

Flandreau, Marc - C.E.P.R. Discussion Papers - 1998

This paper studies how private banks dealt with sovereign risk before World War I. At that time there was no … period into the largest international bank in a country that was the second largest world creditor. In 1871, Crédit Lyonnais … it operated before World War I: given the prominence of Crédit Lyonnais on the international scene, its perceptions …

Persistent link: https://www.econbiz.de/10005656319

Executive Compensation: A Modern Primer

Edmans, Alex; Gabaix, Xavier - C.E.P.R. Discussion Papers - 2015

This article studies traditional and modern theories of executive compensation, bringing them together under a unifying framework. We analyze assignment models of the level of pay, and static and dynamic moral hazard models of incentives, and compare their predictions to empirical findings. We...

Persistent link: https://www.econbiz.de/10011272716

Tractability in Incentive Contracting

Edmans, Alex; Gabaix, Xavier - C.E.P.R. Discussion Papers - 2009

This paper identifies a class of multiperiod agency problems in which the optimal contract is tractable (attainable in closed form). By modeling the noise before the action in each period, we force the contract to provide sufficient incentives state-by-state, rather than merely on average. This...

Persistent link: https://www.econbiz.de/10008509464

Dynamic Incentive Accounts

Edmans, Alex; Gabaix, Xavier; Sadzik, Tomasz; Sannikov, … - C.E.P.R. Discussion Papers - 2009

Contracts in a dynamic model must address a number of issues absent from static frameworks. Shocks to firm value may weaken the incentive effects of securities (e.g. cause options to fall out of the money), and the impact of some CEO actions may not be felt until far in the future. We derive the...

Persistent link: https://www.econbiz.de/10008477185

Risk and the CEO Market: Why Do Some Large Firms Hire Highly-Paid, Low-Talent CEOs?

Edmans, Alex; Gabaix, Xavier - C.E.P.R. Discussion Papers - 2010

This paper presents a market equilibrium model of CEO assignment, pay and incentives under risk aversion and heterogeneous moral hazard. Each of the three outcomes can be summarized by a single closed-form equation. In assignment models without moral hazard, allocation depends only on firm size...

Persistent link: https://www.econbiz.de/10008530386

CEO Pay and Firm Size: an Update after the Crisis

Gabaix, Xavier; Landier, Augustin; Sauvagnat, Julien - C.E.P.R. Discussion Papers - 2013

In the "size of stakes" view quantitatively formalized in Gabaix and Landier (2008), CEO compensation is determined in a competitive talent market, and re flects the size of firms affected by talent. This paper offers empirical update on this view. The years 2004-2011, which include the recent...

Persistent link: https://www.econbiz.de/10011145470