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On the Fundamental Relation between Equity Returns and Interest Rates
Choi, Jaewon - 2014
This paper uses contingent claim asset pricing and exploits capital structure priority to better understand the relation between corporate security returns and interest rate changes (i.e., duration). We show theoretically and, using a novel dataset, confirm empirically that lower priority...
Persistent link: https://www.econbiz.de/10013052687
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The General Theory of Employment, Interest, and Money after 75 Years : The Importance of Being in the Right Place at the Right Time
Luzzetti, Matthew N. - 2011
This paper studies why the General Theory had so much impact on the economics profession through the 1960s, why that … impact began to wane in the 1970s, and why many economic policymakers cling to many of the tenets of the General Theory. We … qualitatively to patterns discussed in the General Theory, that econometric developments in the area of simultaneous equations made …
Persistent link: https://www.econbiz.de/10013131957
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The Real and Financial Implications of Corporate Hedging
Campello, Murillo - 2010
of financial distress. In theory, this should ease a firm's access to credit. Using a tax-based instrumental variable …
Persistent link: https://www.econbiz.de/10013134932
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Interest-Rate Smoothing
Barro, Robert J. - 2010
monetary base and the price level at these times differed from the post-World War I1 experience in ways predicted by the theory …
Persistent link: https://www.econbiz.de/10013139987
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Persistent Liquidity Effects and Long Run Money Demand
Alvarez, Fernando - 2011
We present a monetary model in the presence of segmented asset markets that implies a persistent fall in interest rates after a once and for all increase in liquidity. The gradual propagation mechanism produced by our model is novel in the literature. We provide an analytical characterization of...
Persistent link: https://www.econbiz.de/10013118840
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Discount Rates
Cochrane, John H. - 2011
, including portfolio theory, accounting, cost of capital, capital structure, compensation, and macroeconomics …
Persistent link: https://www.econbiz.de/10013126211
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Fiscal Rules and Discretion Under Persistent Shocks
Halac, Marina - 2012
This paper studies the optimal level of discretion in policymaking. We consider a fiscal policy model where the government has time-inconsistent preferences with a present-bias towards public spending. The government chooses a fiscal rule to trade off its desire to commit to not overspend...
Persistent link: https://www.econbiz.de/10013097776
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Speculative Runs on Interest Rate Pegs
Bassetto, Marco - 2013
We analyze a new class of equilibria that emerges when a central bank conducts monetary policy by setting an interest rate (as an arbitrary function of its available information) and letting the private sector set the quantity traded. These equilibria involve a run on the central bank's interest...
Persistent link: https://www.econbiz.de/10013085500
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When Does it Pay to Delay Social Security? The Impact of Mortality, Interest Rates, and Program Rules
Shoven, John B. - 2013
Social Security benefits may be commenced at any time between ages 62 and 70. As individuals who claim later can, on average, expect to receive benefits for a shorter period, an actuarial adjustment is made to the monthly benefit to reflect the age at which benefits are claimed. In earlier work...
Persistent link: https://www.econbiz.de/10013090660
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On the Desirability of Capital Controls
Heathcote, Jonathan - 2016
In a standard two country international macro model we ask whether imposing restrictions on international non-contingent borrowing and lending is ever desirable. The answer is yes. If one country imposes capital controls unilaterally, it can generate favorable changes in the dynamics of...
Persistent link: https://www.econbiz.de/10013001194