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core. The estimated model matches four facts about banks’ Tobin’s Q that summarize bank leverage dynamics. (1) Book and … nor market leverage constraints are binding for most banks; (4) bank leverage and Tobin’s Q are mean reverting but highly …
Persistent link: https://www.econbiz.de/10012799656
differences in financial factors, which may reflect differences in country risk and the legal and regulatory framework that banks …
Persistent link: https://www.econbiz.de/10010270550
We use the Kalman filter to estimate the structure of the secret currency basket of the renminbi based on daily data between 2005 and 2009. The currency weights of selected currencies are modeled as stochastic processes (random walks). The official announcement of the new exchange rate regime in...
Persistent link: https://www.econbiz.de/10010270870
-collected historical daily dataset on loans to commercial banks, we analyze how personal connections matter for lending of last resort …, highlighting the importance of governance for this core function of central banks. We show that, when faced with a banking panic in … connected banks – those whose board members were BdF shareholders. The BdF's selective lending policy failed to internalize a …
Persistent link: https://www.econbiz.de/10014290136
-collected historical daily dataset on loans to commercial banks, we analyze how personal connections matter for lending of last resort …, highlighting the importance of governance for this core function of central banks. We show that, when faced with a banking panic in … connected banks – those whose board members were BdF shareholders. The BdF’s selective lending policy failed to internalize a …
Persistent link: https://www.econbiz.de/10014262411
nor market leverage constraints are binding for most banks; (4) bank leverage and Tobin’s Q are mean reverting but …
Persistent link: https://www.econbiz.de/10013323873
We study an environment where the capital structure of banks and firms are jointly determined in equilibrium, so as to … assets held by firms and banks is determined by the technology choices by firms and the portfolio diversification choices by … banks. We show competitive equilibria are efficient and the equilibrium level of leverage in banks and firms depend on the …
Persistent link: https://www.econbiz.de/10011698747
In this article we use a stochastic model with one representative firm to study business tax policy under default risk. We will show that, for a given tax rate, the government has an incentive to reduce (increase) financial instability and default costs if its objective function is welfare (tax...
Persistent link: https://www.econbiz.de/10012052770
In this article we study start-up investments in developing countries. Using a representative firm, we wonder how relevant are the effects of taxation and risk on new business activities. It is worth noting that developing countries are usually characterized by three main characteristics....
Persistent link: https://www.econbiz.de/10014534347
This short article studies the tax effects on a start-up investment decision under uncertainty. Since the representative firm can decide both when to invest and how much to borrow, the distortive effects are twofold. We thus show that the deadweight loss (namely, the ratio between the welfare...
Persistent link: https://www.econbiz.de/10012799778