We study the relationship between default and the maturity structure of the debt portfolio of a Sovereign, under uncertainty. The Sovereign faces a trade-off between a future costly default and a high current fiscal effort. This results into a debt crisis in case a large initial issuance of long...

We study a model where investment decisions are based on investors’ information about the unknown and endogenous return of the investment. The information of investors consists of endogenously determined messages sold by financial analysts who have access to both public and private information...

The paper examines the welfare properties of rational learning by privately informed risk-neutral firms. It is shown that the market solution is inefficient, with firms putting too much weight on their private information and public information therefore accumulating suboptimally slowly. It...

The paper examines the welfare properties of rational learning by privately informed risk-neutral firms. It is shown that the market solution is inefficient, with firms putting too much weight on their private information and public information therefore accumulating suboptimally slowly. It...