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Indeterminacy in a Forward Looking Regime Switching Model

Farmer, Roger E. A. - 2006

This paper is about the properties of Markov switching rational expectations (MSRE) models. We present a simple monetary policy model that switches between two regimes with known transition probabilities. The first regime, treated in isolation, has a unique determinate rational expectations...

Persistent link: https://www.econbiz.de/10012466125

What Drives the Disposition Effect? An Analysis of a Long-Standing Preference-Based Explanation

Barberis, Nicholas - 2006

explanation for this puzzle is based on prospect theory. Despite its prominence, this explanation has received little formal … scrutiny. We take up this task, and analyze the trading behavior of investors with prospect theory preferences. We find that …, at least for the simplest implementation of prospect theory, the link between these preferences and the disposition …

Persistent link: https://www.econbiz.de/10012466268

Evaluating Welfare with Nonlinear Prices

Reiss, Peter C. - 2006

This paper examines how to evaluate consumer welfare when consumers face nonlinear prices. This problem arises in many settings, such as devising optimal pricing strategies for firms, assessing how price discrimination affects consumers, and evaluating the efficiency costs of many transfer...

Persistent link: https://www.econbiz.de/10012466295

Financial Constraints, Asset Tangibility, and Corporate Investment

Almeida, Heitor - 2006

between capital spending and cash flows is non-monotonic in the firm's asset tangibility. Our theory allows us to use a …

Persistent link: https://www.econbiz.de/10012466582

Environmental Investment and Policy with Distortionary Taxes and Endogenous Growth

Fullerton, Don - 2006

Recent studies consider public R&D spending that affects abatement knowledge and endogenous growth, distortionary taxes that affect physical and human capital formation, pollution taxes that affect environmental degradation, and regeneration that restores natural capital. Our model combines all...

Persistent link: https://www.econbiz.de/10012466599

Marshall's Economies

Henderson, Vernon - 1999

This paper estimates the nature and magnitude of the local externalities from own industry scale, as envisioned by Marshall. Census panel data on individual plants in high-tech and machinery industries across up to 487 countries are utilized, to quantify the direct effects of local external...

Persistent link: https://www.econbiz.de/10012471426

Can Capital Mobility be Destabilizing?

Meng, Qinglai - 1999

In a standard two-sector neoclassical model with distortions, capital mobility can render the steady state indeterminate, in the sense that there exist infinitely many convergent paths. In the closed economy with no international capital mobility, the utility function must be linear or close to...

Persistent link: https://www.econbiz.de/10012471527

A Rent-Protection Theory of Corporate Ownership and Control

Bebchuk, Lucian Arye - 1999

This paper develops a rent-protection theory of corporate ownership structure - and in particular, of the choice …

Persistent link: https://www.econbiz.de/10012471585

Is Optimism Good in a Keynesian Economy?

Persson, Torsten - 1983

Assume that an economy is in a state of Keynesian unemployment. Since production is demand-determined there are bootstraps (multiple) equilibria. Then, the more optimist agents are about the future the higher will be theur demand today and hence current production. In that limited sense optimism...

Persistent link: https://www.econbiz.de/10012478032

The Theory of Local Public Goods Twenty-Five Years After Tiebout : A Perspective

Stiglitz, Joseph E. - 1982

This paper asks, under what conditions can the Fundamental Theorem of Welfare Economics be extended to economies with … redistributions) . Just as the Fundamental Theorem of Welfare Economics does not adequately reflect the vices and virtues of …

Persistent link: https://www.econbiz.de/10012478151

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