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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
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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
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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
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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
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Testing the Positive Theory of Government Finance
Bizer, David S. - 2010
Researchers characterizing optimal tax policies for dynamic economies have reasoned that optimally chosen tax rates should approximately follow a random walk. We conduct a frequency-domain examination of the properties of the tax rate series and conclude that while there is a substantial...
Persistent link: https://www.econbiz.de/10013138760
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A Requiem for the Fiscal Theory of the Price Level
Farmer, Roger E. A. - 2019
We demonstrate that the Fiscal Theory of the Price Level (FTPL) cannot be used to determine the price level uniquely in the overlapping generations (OLG) model. We provide two examples of OLG models, one with three 3-period lives and one with 62-period lives. Both examples are calibrated to an...
Persistent link: https://www.econbiz.de/10012894996
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Macroeconomics and Arch
Hamilton, James D. - 2010
Although ARCH-related models have proven quite popular in finance, they are less frequently used in macroeconomic applications. In part this may be because macroeconomists are usually more concerned about characterizing the conditional mean rather than the conditional variance of a time series....
Persistent link: https://www.econbiz.de/10012759101
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Intertemporal Distortions in the Second Best
Albanesi, Stefania - 2010
This paper studies the long run properties of intertemporal distortions in a broad class of second best economies. Our unified framework encompasses and extends many well known models, such as variants of the Ramsey taxation model with aggregate or idiosyncratic risk, and economies with...
Persistent link: https://www.econbiz.de/10012759663
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On the General Relativity of Fiscal Language
Kotlikoff, Laurence J. - 2010
A century ago, everyone thought time and distance were well defined physical concepts. But neither proved absolute. Instead, measures/reports of time and distance were found to depend on one%u2019s reference point, specifically one%u2019s direction and speed of travel, making our apparent...
Persistent link: https://www.econbiz.de/10012761261
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Monetary and Fiscal Theories of the Price Level : The Irreconcilable Differences
McCallum, Bennett T. - 2010
The fiscal theory of the price level (FTPL) has attracted much attention but disagreement remains concerning its defining characteristics. Some writers have emphasized implications regarding interest-rate pegging and determinacy of RE solutions, whereas others have stressed its capacity to...
Persistent link: https://www.econbiz.de/10012761721