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Much progress has been achieved in the valuation of call options and interest-rate caps on default-free mortgages. The evidence suggests that the observed term structure of interest rates (the full structure, not just the end points) and a reasonable estimate of the volatility of spot rates is...
Persistent link: https://www.econbiz.de/10012477113
The paper begins with presentation of a methodology for computing rental costs of capital under any tax regime.Tax law over the 1980-84 period is specified and the provisions of theTreasury and Administration tax reform proposals and HR 3838 are described. A model is then constructed to allow...
Persistent link: https://www.econbiz.de/10012477164
Possible benefits of tax reform include faster economic growth and greater equity across households. A part of economic growth is the channeling of saving into the most productive real investments. The ability of various tax regimes to channel saving efficiently and independently of the...
Persistent link: https://www.econbiz.de/10012477166
The impacts of four major tax reform proposals on the level of interest rates and the allocation of the American capital stock are derived. The four plans are Bradley-Gephardt, Kemp-Kasten, Treasury I and Treasury II. The allocation is among seven types of nonresidential capital, rental housing,...
Persistent link: https://www.econbiz.de/10012477372
Four tax reform proposals have been advanced in recent years: Bradley-Gephardt, Kemp-Kasten, Treasury-Department and the Administration plan. These plans could have significant impacts on financial markets. Reductions ininvestment incentives and marginal tax rates would tend to lower before-tax...
Persistent link: https://www.econbiz.de/10012477373
This paper provides a framework for pricing adjustable rate mortgages and summarizes some evidence on the prices (additions to the coupon rate) necessary to cover expected losses from binding of varios interest rate caps and from mortgage default and foreclosure. Both interst rate and default...
Persistent link: https://www.econbiz.de/10012477538
This paper examines semiannual ex post returns on corporate equities and bonds and six-month Treasury bills over the 1953-84 period with special emphasis on whether returns so far in the 1980s have been usual relative to the previous quarter century. The performance of the equity and bond...
Persistent link: https://www.econbiz.de/10012477565
Changes in six-month bill rates over semiannual periods in the 1960s and 1970s are successfully related to expected changes and to surprises. The latter include unanticipated changes in expected inflation, in the growth of industrial production and base money, and in inflation uncertainty....
Persistent link: https://www.econbiz.de/10012477829
This paper contains three parts: a discussion of the tax advantages of household capital (owner-occupied housing and consumer durables) relative to business capital (structures and producers durables) ,an analysis of alternative mechanisms for reducing these advantages (including the use of the...
Persistent link: https://www.econbiz.de/10012478069
Enormously diverse real and nominal ex post returns on equity and short and long term debt securities have accompanied substantial variations in inflation and resource utilization during the past half century. This paper contains an examination of the relationships among these security returns...
Persistent link: https://www.econbiz.de/10012478419