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Asset Liquidity and International Portfolio Choice

Geromichalos, Athanasios - 2011

over faster than domestic assets because the former have desirable liquidity properties, but represent inferior saving …

Persistent link: https://www.econbiz.de/10013121055

Liquidity, Business Cycles, and Monetary Policy

Kiyotaki, Nobuhiro - 2012

The paper presents a model of a monetary economy where there are differences in liquidity across assets. Money … on assets, reflecting their differences in liquidity. The model is used, first, to investigate how aggregate activity and … asset prices fluctuate with shocks to productivity and liquidity; second, to examine what role government policy might have …

Persistent link: https://www.econbiz.de/10013108309

Optimal Taxation in the Presence of Bailouts

Panageas, Stavros - 2010

The termination of a representative financial firm due to excessive leverage may lead to substantial bankruptcy costs. A government in the tradition of Ramsey (1927) may be inclined to provide transfers to the firm so as to prevent its liquidation and the associated deadweight costs. It is shown...

Persistent link: https://www.econbiz.de/10013150643

Bailouts, the Incentive to Manage Risk, and Financial Crises

Panageas, Stavros - 2010

A firm's termination leads to bankruptcy costs. This may create an incentive for outside stakeholders or the firm's debtholders to bail out the firm as bankruptcy looms. Because of this implicit guarantee, firm shareholders have an incentive to increase volatility in order to exploit the...

Persistent link: https://www.econbiz.de/10013152555

Default and Renegotiation : A Dynamic Model of Debt

Hart, Oliver; Moore, John - 2021

We analyze the role of debt in persuading an entrepreneur to pay out cash flows, rather than to divert them. In the first part of the paper we study the optimal debt contract -- specifically, the trade-off between the size of the loan and the repayment -- under the assumption that some debt...

Persistent link: https://www.econbiz.de/10013215359

The Economics of Bankruptcy Reform

Aghion, Philippe; Hart, Oliver; Moore, John - 2021

We propose a new bankruptcy procedure. Initially, a firm's debts are cancelled, and cash and non-cash bids are solicited for the 'new" (all-equity) firm. Former claimants are given shares, or options to buy shares, in the new firm on the basis of absolute priority. Options are exercised once the...

Persistent link: https://www.econbiz.de/10013240544

A Quantitative Model of Sudden Stops and External Liquidity Management

Caballero, Ricardo J.; Panageas, Stavros - 2021

liquidity and liability management more generally …

Persistent link: https://www.econbiz.de/10013228758