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Competitive Lending with Partial Knowledge of Loan Repayment
Brock, William A. - 2008
We study a competitive credit market in which lenders with partial knowledge of loan repayment use one of three decision criteria - maximization of expected utility, maximin, or minimax regret - to make lending decisions. Lenders allocate endowments between loans and a safe asset, while...
Persistent link: https://www.econbiz.de/10012464269
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Dynamic Asset Allocation With Event Risk
Liu, Jun - 2002
Major events often trigger abrupt changes in stock prices and volatility. We study the implications of jumps in prices and volatility on investment strategies. Using the event-risk framework of Duffie, Pan, and Singleton (2000), we provide analytical solutions to the optimal portfolio problem....
Persistent link: https://www.econbiz.de/10012469608
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Y2K and Offshoring : The Role of External Economies and Firm Heterogeneity
Mitra, Devashish - 2005
We construct a model of offshoring with externalities and firm heterogeneity. Due to the presence of externalities, temporary shocks like the Y2K problem can have permanent effects, i.e., they can permanently raise the extent of offshoring in an industry. Also, the initial advantage of a country...
Persistent link: https://www.econbiz.de/10012466954
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Financial Development and the Instability of Open Economies
Aghion, Philippe - 2004
This paper introduces a framework for analyzing the role of financial factors as a source of instability in small open economies. Our basic model is a dynamic open economy model with a tradeable good produced with capital and a country-specific factor. We also assume that firms face credit...
Persistent link: https://www.econbiz.de/10012468447
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Uncertainty, Financial Frictions, and Investment Dynamics
Gilchrist, Simon - 2014
Micro- and macro-level evidence indicates that fluctuations in idiosyncratic uncertainty have a large effect on investment; the impact of uncertainty on investment occurs primarily through changes in credit spreads; and innovations in credit spreads have a strong effect on investment,...
Persistent link: https://www.econbiz.de/10012458626
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Volatility, Labor Market Flexibility, and the Pattern of Comparative Advantage
Cuñat, Alejandro - 2007
with higher volatility. Empirical evidence for a large sample of countries strongly supports this theory: the exports of …
Persistent link: https://www.econbiz.de/10012465592
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Lobbying Behind the Frontier
Bombardini, Matilde; Cutinelli-Rendina, Olimpia; … - National Bureau of Economic Research - 2021
competition in U.S. industries. Lobbying expenditures increase as a consequence of import changes related to the China shock. The … effect on lobbying is not homogeneous across firms and it concentrates particularly in those producers which are behind the … technological frontier. We discuss theoretical mechanisms driving lobbying of firms away from the technological frontier: not only …
Persistent link: https://www.econbiz.de/10012616568
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Voracity and Growth
Tornell, Aaron - 1998
We analyze an economy that lacks a strong legal-political institutional infrastructure an dis populated by multiple powerful groups. Powerful groups dynamically interact via fiscal process that effectively allows open access to the aggregate capital stock. In equilibrium, this leads to slow...
Persistent link: https://www.econbiz.de/10012472304
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From Just in Time, to Just in Case, to Just in Worst-Case : Simple models of a Global Supply Chain under Uncertain Aggregate Shocks
Jiang, Bomin; Rigobon, Daniel E.; Rigobón, Roberto - National Bureau of Economic Research - 2021
Covid-19 highlighted the weaknesses in the supply chain. Many have argued that a more resilient or robust supply chain is needed. But what does a robust supply chain mean? And how do firms' decisions change when taken that approach? This paper studies a very stylized model of a supply chain,...
Persistent link: https://www.econbiz.de/10012660023
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Bilateral FDI Flows : Threshold Barriers and Productivity Shocks
Razin, Assaf - 2005
-equilibrium increase in domestic input prices. This is the gist of the theory that we develop in the paper. For a sample of 62 OECD and Non …
Persistent link: https://www.econbiz.de/10012467038