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Empirical research on the permanent income hypothesis (PIH) has found that consumption growth is excessively sensitive to predictable changes in income. This finding is interpreted as strong evidence against the PIH. We propose an explanation for apparent excess sensitivity that is based on a...
Persistent link: https://www.econbiz.de/10014196816
A central result in the economic theory of liability is that, if an injurer's liability equals the victim's loss, then …
Persistent link: https://www.econbiz.de/10014103716
disparate traditions. I make the case for unity between Post-Keynesian and General Equilibrium Theory under the banner of Post …-Keynesian Dynamic Stochastic General Equilibrium Theory …
Persistent link: https://www.econbiz.de/10012964394
Public employment programs may affect poverty through both the income they provide and their effects on private labor markets. We estimate both effects, exploiting a large-scale experiment randomized across 157 sub-districts (with an average population of 62,500 each) that improved the...
Persistent link: https://www.econbiz.de/10012947627
We develop a theory of optimal financing for R&D-intensive firms that uses their unique features—large capital outlays …
Persistent link: https://www.econbiz.de/10012947632
with international spill overs so that in theory there can be gains to international policy cooperation. In this richer …
Persistent link: https://www.econbiz.de/10012952504
Credit market freezes in which debt issuance declines dramatically and market liquidity evaporates are typically observed during financial crises. In the financial crisis of 2008-09, the structured credit market froze, issuance of corporate bonds declined, and secondary credit markets became...
Persistent link: https://www.econbiz.de/10012954001
We generalize the classic concept of compensating variation and the welfare compensation principle to a general equilibrium environment with distortionary taxes. We show that the problem of designing a tax reform that compensates the welfare gains and losses induced by an economic disruption can...
Persistent link: https://www.econbiz.de/10012954448
We analyze the firm-level and aggregate consequences of equity market imperfections in the form of noisy information aggregation for corporate risk-taking and investment. Market imperfections cause controlling shareholders to invest too much in upside risks and too little in downside risks in an...
Persistent link: https://www.econbiz.de/10012955940
We argue that standard modeling practices often overstate the potency of general-equilibrium (GE) mechanisms. We formalize the notion that GE adjustment is weak, or that it takes time, by modifying an elementary Walrasian economy in two alternative manners. In one, we replace Rational...
Persistent link: https://www.econbiz.de/10012956930