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Guimaraes, Bernardo - London School of Economics (LSE) - 2008

This paper analyses whether sovereign default episodes can be seen as contingencies of optimal international lending contracts. The model considers a small open economy with capital accumulation and without commitment to repay debt. Taking first order approximations of Bellman equations, I...

Persistent link: https://www.econbiz.de/10010744981

Principal agent problems under loss aversion: an application to executive stock options

de Meza, David; Webb, David C. - London School of Economics (LSE) - 2004

Executive stock options reward success but do not penalise failure. In contrast, the standard principalagent model implies that pay is normally monotonically increasing in performance. This paper shows that, under loss aversion, the use of carrots but not sticks is a feature of an optimal...

Persistent link: https://www.econbiz.de/10010745716

Incentive design under loss aversion

de Meza, David; Webb, David C. - London School of Economics (LSE) - 2006

Compensation schemes often reward success but do not penalize failure. Fixed salaries with stock options or bonuses have this feature. Yet the standard principal–agent model implies that pay is normally monotonically increasing in performance. This paper shows that, under loss aversion, there...

Persistent link: https://www.econbiz.de/10010746407

The impact of trade on aggregate productivity and welfare with heterogeneous firms and business cycle uncertainty

Thia, Jang Ping - London School of Economics (LSE) - 2008

This paper presents a model with monopolistic competition, productively heterogeneous firms, and business cycle aggregate shocks. With firm-specific productive heterogeneity, weaker firms quit when faced with a negative aggregate shock. Consequently, trade does not always increase firm-level...

Persistent link: https://www.econbiz.de/10010745558

On building the American and the European empires

Colomer, Josep M. - London School of Economics (LSE) - 2009

The processes of building the United States of America (USA) during the nineteenth century and the European Union (EU) since mid-twentieth century are among the major claims for the possibility of a vast, ‘imperial’-size political unit based on democratic principles. The crucial period for...

Persistent link: https://www.econbiz.de/10010745910

Can comparative advantage explain the growth of US trade?

Cunat, Alejandro; Maffezzoli, Marco - London School of Economics (LSE) - 2005

We present a dynamic comparative advantage model in which moderate reductions in trade costs can generate sizable increases in trade volumes over time. A fall in trade costs has two effects on the volume of trade. First, for given factor endowments, it raises the degree of specialization of...

Persistent link: https://www.econbiz.de/10010746417

The estimated effects of the euro on trade: why are they below historical effects of monetary unions among smaller countries?

Frankel, Jeffrey A. - London School of Economics (LSE) - 2009

others used the gravity model on a much smaller data set to estimate the effects of the euro on trade among its members. The … that were estimated in the euro's first four years hold up in the second four years? The answer is yes. Second, and more … explanations for the gap between 15% and 200%. First, lags. The euro is still very young. Second, size. The European countries are …

Persistent link: https://www.econbiz.de/10011071291

Spillover and backward linkage effects of FDI: empirical evidence for the UK

Harris, Richard - London School of Economics (LSE) - 2009

Recent work (including that of the author) on the impact of FDI has been based on microlevel (i.e. firms, establishments or plants) data, since this allows much greater control when examining such issues as whether FDI plants are more productive or innovative; whether there are spillovers to...

Persistent link: https://www.econbiz.de/10010884505

The United Kingdom pension system: key issues

Blake, David - London School of Economics (LSE) - 2003

This paper examines the key issues relating to the UK pension system. It reviews the current system of pension provision, describes and analyses the reforms since 1980, examines the legal regulatory and accounting framework for occupational pension schemes, assesses the different types of risks...

Persistent link: https://www.econbiz.de/10010884512

Coordination risk and the price of debt

Morris, Stephen; Shin, Hyun Song - London School of Economics (LSE) - 2001

Creditors of a distressed borrower face a coordination problem. Even if the fundamentals are sound, fear of premature foreclosure by others may lead to pre-emptive actions, undermining the project. Recognition of this problem lies behind corporate bankruptcy provisions across the world, and it...

Persistent link: https://www.econbiz.de/10010884521

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