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Jovanovic, Boyan - 1996

We analyze the contractual relation between workers and their employers when there is nominal risk. The key feature of … eliminate all nominal risk for the parties (by fully indexing the terms of the contracts to the price level) but they would be …

Persistent link: https://www.econbiz.de/10012473208

Dynamic Incentive Contracts Under Parameter Uncertainty

Prat, Julien - 2010

Commitment is therefore more valuable when quality is known more precisely. Incentives then are easier to provide because the agent has less room to manipulate the beliefs of the principal. Moreover, in contrast to results under one-period commitment, wage volatility declines as experience...

Persistent link: https://www.econbiz.de/10012462007

Risk Shifting, Unemployment Insurance, and Layoffs

Grossman, Herschel I. - 1980

analysis focuses on the interaction between contractual arrangements for shifting risk from workers to employers and tax …-financed unemployment insurance. The key element in the analysis is that unemployment insurance is more attractive than risk shifting as a … way for workers to obtain income during unemployment. The paper also analyses the effects of risk shifting and …

Persistent link: https://www.econbiz.de/10012478721

Uncertainty and Growth Disasters

Jovanovic, Boyan - 2020

This paper documents several facts on the real effects of economic uncertainty. First, higher uncertainty is associated with a more dispersed distribution of output growth. Second, the relation is highly asymmetric: A rise in uncertainty is associated with a sharp decline in the lower tail of...

Persistent link: https://www.econbiz.de/10012482243

Trading on Sunspots

Jovanovic, Boyan - 2014

In a model with multiple Pareto-ranked equilibria we add trade in assets that pay based on the realization of a sunspot. Asset trading restricts the equilibrium set in a way that raises welfare by eliminating equilibria with a high likelihood of disasters. When the probability of a disaster is...

Persistent link: https://www.econbiz.de/10012457853

Producers and Predators

Grossman, Herschel I. - 1999

This paper explores a series of general-equilibrium models in which people can choose to be either producers or predators, and in which producers can allocate their resources either to production or to guarding their production against predators. The analysis shows how the ratio of predators to...

Persistent link: https://www.econbiz.de/10012471640

On the Inception of Rational Bubbles in Stock Prices

Diba, Behzad T. - 1986

Persistent link: https://www.econbiz.de/10012477082

Rational Bubbles in Stock Prices?

Diba, Behzad T. - 1985

This paper reports empirical tests for the existence of rational bubbles in stock prices. The analysis focuses on a familiar model that defines market fundamentals to be the expected present value of dividends, discounted at a constantrate, and defines a rational bubble to be a self-confirming...

Persistent link: https://www.econbiz.de/10012477310

The Impossibility of Rational Bubbles

Diba, Behzad T. - 1985

A rational bubble would involve a self-confirming belief that an asset price depends on information that includes variables or parameters that are not part of market fundamentals. The existing literature shows that, if market fundamentals are economically interesting, i.e., forward looking, any...

Persistent link: https://www.econbiz.de/10012477466

Seigniorage, Inflation, and Reputation

Grossman, Herschel I. - 1984

This paper derives a reputational equilibrum for inflation in a model in which the government obtains valuable seigniorage by issuing fiat money in echange for real resources. One insightful result is that , with contemporaneous perceptionof actual government behavior and immediate adjustment of...

Persistent link: https://www.econbiz.de/10012477581