values and optimal investment decisions. The method is quite general, and is illustrated both analytically and numerically …, on mine values and investment decisions. Although the tax policies are found to have the expected effects on asset values …, the effects on investment decisions are sometimes perverse. An increase in the income tax rate may encourage investment …

stress, consistent with rollover risk being an important channel influencing investment. The negative effect of firm leverage …We quantify the role of financial leverage behind the sluggish post-crisis investment performance of European firms. We … arising from sovereign risk, and aggregate demand conditions. We find that firms with higher debt levels reduce their …

fluctuations in savings on domestic investment and the current account? In the long run, we find that countries invest the marginal … to smooth consumption, but also domestic investment. To achieve this, they use foreign assets as a buffer stock …

the risk of fire sales, how fire sales can lead to downward spirals or cascades in asset prices, how arbitrage fails in … the presence of fire sales, and how fire sales can reduce productive investment. We conclude by showing how asset fire …

reallocated from the private to the public sectors, reducing investment and deepening the recessions even further. To account for … these facts, we propose a simple model of sovereign risk in which debt can be traded in secondary markets. The model has two …. This implies that domestic debt purchases displace productive investment. The model shows that these purchases reduce …

It is well understood that investment serves as a shock absorber at the time of crisis. The duration of the drag on … investment, however, is perplexing. For the nine Asian economies we focus on in this study, average investment/GDP is about 6 … between the sustained reserve accumulation and the persistent and significantly lower levels of investment in the region. Put …

decline in output--explained by a drop in aggregate total factor productivity and investment--and a protracted increase in …

. This model generates dynamic relationships between foreign capital inflows, domestic investment and domestic bank debt in … accumulation of bank debt and increasing concentration of domestic lending and investment to the anticipation of contingent …