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Liquidation Values and the Credibility of Financial Contract Renegotiation : Evidence from U.S. Airlines

Benmelech, Efraim - 2008

How do liquidation values affect financial contract renegotiation? While the amp;apos;incomplete contractingamp;apos; theory of financial contracting predicts that liquidation values determine the allocation of bargaining power between creditors and debtors, there is little empirical evidence on...

Persistent link: https://www.econbiz.de/10012771713

The Role of Leasing Under Adverse Selection

Hendel, Igal - 2008

Leasing contracts specify a rental rate and an option price at which the used good can be bought at the termination of … prices. In contrast, under adverse selection, leasing contracts affect equilibrium allocations in a way that matches observed … behavior in the car market. We show that a social planner can use leasing contracts to improve welfare but they are imperfect …

Persistent link: https://www.econbiz.de/10012774893

The Economics of Time-Limited Development Options : The Case of Oil and Gas Leases

Herrnstadt, Evan; Kellogg, Ryan; Lewis, Eric - 2022

Oil and gas leases between mineral owners and extraction firms ubiquitously include royalty and primary term clauses. The royalty denotes the share of revenue that is paid to the mineral owner, and the primary term specifies the date by which the firm must complete a well, lest it lose the...

Persistent link: https://www.econbiz.de/10013296175

Owning, Using and Renting : Some Simple Economics of the "Sharing Economy"

Horton, John J. - 2016

New Internet-based markets enable consumer/owners to rent out their durable goods when not using them. Such markets are modeled to determine ownership, rental rates, quantities, and surplus generated. Both the short run, before consumers can revise their ownership decisions, and the long run, in...

Persistent link: https://www.econbiz.de/10012997898

Public Finance in a Nutshell : A Cobb Douglas Teaching Tool for General Equilibrium Tax Incidence and Excess Burden

Fullerton, Don - 2017

To help first- or second-year graduate students in economics apply their theoretical training, this paper shows how to solve a simple and intuitive computable general equilibrium (CGE) model using a calculator. Because this simplified Harberger model uses Cobb Douglas functional forms for...

Persistent link: https://www.econbiz.de/10012964910

Behavioral Public Economics

Bernheim, B. Douglas - 2018

This chapter surveys work in behavioral public economics, emphasizing the normative implications of non-standard decision making for the design of welfare-improving and/or optimal policies. We highlight combinations of theoretical and empirical approaches that together can produce robust...

Persistent link: https://www.econbiz.de/10012914700

Long-Term Debt and Optimal Policy in the Fiscal Theory of the Price Level

Cochrane, John H. - 2021

The fiscal theory says that the price level is determined by the ratio of nominal debt to the present value of real primary surpluses. I analyze long-term debt and optimal policy in the fiscal theory. I find that the maturity structure of the debt matters. For example, it determines whether news...

Persistent link: https://www.econbiz.de/10013220940

Money as Stock : Price Level Determination with No Money Demand

Cochrane, John H. - 2021

I show that a determinate, finite price level can be achieved in an economy with no monetary frictions, and no commodity standard or other explicit redemption commitment. I make one small modification to a standard cash in advance model: I reopen the security market at the end of the day. With...

Persistent link: https://www.econbiz.de/10013221860

Understanding the Fiscal Theory of the Price Level

Christiano, Lawrence J.; Fitzgerald, Terry J. - 2021

Persistent link: https://www.econbiz.de/10013223567

The Fallacy of the Fiscal Theory of the Price Level

Buiter, Willem H. - 2021

It is not common for an entire scholarly literature to be based on a fallacy, that is, 'on faulty reasoning; misleading or unsound argument'. The 'fiscal theory of the price level', recently re-developed by Woodford, Cochrane, Sims and others, is an example of a fatally flawed research...

Persistent link: https://www.econbiz.de/10013223568