We present a model of endogenous firm growth with R&D investment and stochastic innovation as the engines of growth …) firm growth independent of firm size, as stated in the so-called Gibrat's law, and (iii) R&D investment proportional to …

technology of private investment. Government policies that discourage saving might make the Schumpeterian vision of a shift from …

taxes may thus change the investment behavior of firms. Using an international panel with many changes in payout taxes, we … show that this prediction holds well. Payout taxes have a large impact on the dynamics of corporate investment and growth …. Investment is "locked in" in profitable firms when payout is heavily taxed. Thus, apart from any aggregate effects, payout taxes …

How do public and private information affect equilibrium allocations and social welfare in economies with investment …

What is the best way to incorporate a risk premium into the discount rate schedule for a real investment project with … uncertain payoffs? The standard CAPM formula suggests a beta-weighted average of the return on a safe investment and the mean … return on an economy-wide representative risky investment. Suppose, though, that the project constitutes a tail …

We develop a dynamic model of trading and investment with limited aggregate resources to study investment cycles …. Unverifiable idiosyncratic investment opportunities imply market prices to play a role of rent distribution, distorting private … investment incentives from a social point of view. This distortion is price-dependent, leading to two-sided inefficient …

firm characteristics - Tobin's Q, past investment, earnings-price ratios, market betas, and idiosyncratic volatility of … returns by aggregate investment and valuation ratios; and v) a downward sloping term structure of risk premia for dividend … strips. Our model delivers testable predictions about the behavior of firm-level real variables - investment and output …