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Does Financial Constraint Affect Shareholder Taxes and the Cost of Equity Capital?
Chen, Chongyang - 2011
explanation for the heretofore puzzling finding that, following the unprecedented 2003 reduction in dividend tax rates, non-dividend …-paying firms outperformed dividend-paying firms. Not surprisingly, we find that non-dividend-paying firms are more financial … constrained than dividend-paying firms are. When a firm's financial constraint and dividend choice are jointly considered, we find …
Persistent link: https://www.econbiz.de/10013123306
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Investment and Capital Constraints : Repatriations Under the American Jobs Creation Act
Faulkender, Michael W. - 2014
The American Jobs Creation Act (AJCA) significantly lowered US firms' tax cost when accessing their unrepatriated foreign earnings. Using this temporary shock to the cost of internal financing, we examine the role of capital constraints in firms' investment decisions. Controlling for the...
Persistent link: https://www.econbiz.de/10013070867
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Moral Hazard vs. Liquidity and Optimal Unemployment Insurance
Chetty, Raj - 2010
This paper presents new evidence on why unemployment insurance (UI) benefits affect search behavior and develops a simple method of calculating the welfare gains from UI using this evidence. I show that 60 percent of the increase in unemployment durations caused by UI benefits is due to a...
Persistent link: https://www.econbiz.de/10012759356
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Liquidity and Trading Dynamics
Guerrieri, Veronica - 2010
How do financial frictions affect the response of an economy to aggregate shocks? In this paper, we address this question, focusing on liquidity constraints and uninsurable idiosyncratic risk. We consider a search model where agents use liquid assets to smooth individual income shocks. We show...
Persistent link: https://www.econbiz.de/10012759970
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Liquidity Constraints in Production Based Asset Pricing Models
Brock, William A. - 2010
This paper explores the time series implications of introducing credit constraints into a production based asset pricing model. Simulations are performed choosing parameter values which generate reasonable values for aggregate fluctuations. These results show that mean reversion in simulated...
Persistent link: https://www.econbiz.de/10012762736
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Do Liquidity Constraints and Interest Rates Matter for Consumer Behavior? Evidence from Credit Card Data
Gross, David B. - 2010
This paper utilizes a unique new dataset of credit card accounts to analyze how people respond to changes in credit supply. The data consist of a panel of thousands of individual credit card accounts from several different card issuers, with associated credit bureau data. We estimate both...
Persistent link: https://www.econbiz.de/10012763150
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Saving and Liquidity Constraints
Deaton, Angus - 2010
This paper is concerned with the theory of saving when consumers are not permitted to borrow, and with the ability of … such a theory to account for some of the stylized facts of saving behavior. When consumers are relatively impatient, and …
Persistent link: https://www.econbiz.de/10012763409
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Financial Frictions and the Wealth Distribution
Fernández-Villaverde, Jesús - 2019
This paper investigates how, in a heterogeneous agents model with financial frictions, idiosyncratic individual shocks interact with exogenous aggregate shocks to generate time-varying levels of leverage and endogenous aggregate risk. To do so, we show how such a model can be efficiently...
Persistent link: https://www.econbiz.de/10012862408
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Financial Frictions and Trade Dynamics
Bergin, Paul R. - 2018
This paper demonstrates theoretically that a financial shock can have very persistent effects on international trade. Motivation is taken from the aftermath of the dramatic trade collapse in 2008-9, which despite a substantial recovery, has left a persistently slower growth rate in trade. We...
Persistent link: https://www.econbiz.de/10012921539
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Liquidity Constraints and the Value of Insurance
Ericson, Keith M. Marzilli - 2018
Insurance affects the variability of consumption over time, which is not captured in standard expected utility of wealth models. We develop a consumption-utility model that shows how liquidity constraints and borrowing costs impact the value of insurance. Liquidity constraints generate high...
Persistent link: https://www.econbiz.de/10012911483