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A Dynamic General Equilibrium Framework of Investment with Financing Constraint

Yuen, Chi-wa; Xie, Danyang - EconWPA - 2002

In this paper, we provide a dynamic general equilibrium framework with an explicit investment-financing constraint. The constraint is intended as a reduced form to capture the balance sheet effects that have been widely regarded as an important determinant of financial crises. We derive a link...

Persistent link: https://www.econbiz.de/10005076703

Machine replacement, Network Externalities and Investment Cycles

Ruiz, Juan - EconWPA - 2003

This paper presents a model where agents decide on the timing of replacement of ageing machines. The optimal replacement policy for an agent is influenced by other agents' decisions because the productivity of a particular vintage displays network externalities that set in with a lag. In...

Persistent link: https://www.econbiz.de/10005076759

The Non-Neutrality of Debt in Investment Timing: A New NPV Rule

Sabarwal, Tarun - EconWPA - 2004

Limited liability debt financing of irreversible investments can affect investment timing through an entrepreneur's option value, even after compensating a lender for expected default losses. This non-neutrality of debt arises from an entrepreneur's unique investment opportunity, and it is shown...

Persistent link: https://www.econbiz.de/10005076954

Financial Market Imperfections and Investment: an Overview

Calmès, Christian - EconWPA - 2004

The paper examines the interpretation of firms' investment-cash flow sensitivity as an artifact of financial market … investment-cash flow sensitivity is discussed as well as some of the macroeconomic implications of financial market imperfections. …

Persistent link: https://www.econbiz.de/10005077038

Technological Innovations: Slumps and Booms

Felli, Leonardo; Ortalo-Magne, Francois - EconWPA - 1997

This paper documents the delayed adoption of a major technological innovation: the adoption of the diesel locomotive in the US railway industry. Contrary to other instances of major technological innovations, the delay in the adoption of the diesel locomotive was not associated with an initial...

Persistent link: https://www.econbiz.de/10005077077

Economia sintetica

Vildosola, Luis - EconWPA - 1998

Theoretical study identifying one modality with conditions necesary for the financial stabilization of an inherently unstable system; and 5040 other unstable dynamic modes. It draws on knowledge made available by the academic field of Control Engineering.

Persistent link: https://www.econbiz.de/10005125628

Econmic Growth and Productive Knowledge

Gürak, H. - EconWPA - 2003

The relations between the riches of nations and the riches of Productive Knowledge (Technology) gains increasing acknowledgment among economists. Classical economists had assumed that the key to progress was the accumulation of homogenous capital goods. But, as P. Romer, among others, claims we...

Persistent link: https://www.econbiz.de/10005125665

The Other Side of Limited Liability: Predatory Behavior and Investment Timing

Bayer, Christian - EconWPA - 2004

obligations in adverse states. However, market conditions themselves become endogenous in a duopoly since the quantity decisions … of all competitors determine the market price. If now investment is irreversible, it is a strong commitment. It hence … consequently monopolize the market. Therefore, the model of this paper explains predatory behavior in a duopoly without invoking …

Persistent link: https://www.econbiz.de/10005134505

Multi-agent modeling and simulation of a sequential monetary production economy

Raberto, Marco; Teglio, Andrea; Cincotti, Silvano - EconWPA - 2005

This paper presents a heterogeneous agent model of a sequential monetary production economy. A deterministic dynamic flow model is employed. The model is characterized by three classes of agents: a single homogeneous representative consumer, heterogeneous firms and a banking sector. There are...

Persistent link: https://www.econbiz.de/10005134593

A Framework for Studying Economic Interactions (with applications to corruption and business cycles)

Verbrugge, Randal J. - EconWPA - 1998

Most economic models implicitly or explicitly assume that interactions between economic agents are 'global' - in other words, each agent interacts in a uniform manner with every other agent. However, localized interactions between microeconomic agents are a pervasive feature of reality. What are...

Persistent link: https://www.econbiz.de/10005407546