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Risk Shifting, Unemployment Insurance, and Layoffs
Grossman, Herschel I. - 2021
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/10013214609
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Rational Bubbles in Stock Prices?
Diba, Behzad - 2008
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/10012774692
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The Impossibility of Rational Bubbles
Diba, Behzad - 2008
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/10012774698
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A Theory of War Finance
Grossman, Herschel I. - 2008
consumption against the risk associated with the material consequences of the war …
Persistent link: https://www.econbiz.de/10012774852
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Sovereign Debt and Consumption Smoothing
Grossman, Herschel I. - 2008
This paper shows that whether or not a sovereign can borrow to smooth consumption depends both on how consumption smoothing is achieved, whether by contingent debt issuance or by contingent debt servicing, and on the exact nature of the penalty for debt repudiation. If a sovereign that...
Persistent link: https://www.econbiz.de/10012774949
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Nominally Sovereign Debt, Risk Shifting, and Reputation
Grossman, Herschel I. - 2010
risk associated with the unpredictability of tax revenues from the sovereign to its lenders. The analysis answers the …
Persistent link: https://www.econbiz.de/10012760389
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Seigniorage, Inflation, and Reputation
Grossman, Herschel I. - 2010
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/10012763378
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A Theory of the Informal Sector
Azuma, Yoshiaki; Grossman, Herschel I. - 2021
In many countries, especially poor countries, a heavy burden of taxes, bribes, and bureaucratic hassles drives many producers into the informal sector. Is this situation explicable only as a consequence of either the ignorance or the ineptitude of the state authorities? On the contrary this...
Persistent link: https://www.econbiz.de/10013216486
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Tests of Equilibrium Macroeconomics Using Contemporaneous Monetary Data
Boschen, John F.; Grossman, Herschel I. - 2021
This paper uses contemporaneous monetary data to carry out econometric tests of the "equilibrium" approach to modeling the relation between monetary disturbances and macroeconomic fluctuations. The theoretical analysis introduces into an equilibrium macroeconomic model the availability of...
Persistent link: https://www.econbiz.de/10013220004
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Human Capital and Predation : A Positive Theory of Educational Policy
Grossman, Herschel I.; Kim, Minseong - 2021
predators. Our theory predicts that, if producers choose choose the amount of guarding against predators, then the well endowed …
Persistent link: https://www.econbiz.de/10013221091