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Bubbly Liquidity
Farhi, Emmanuel - 2011
This paper analyzes the possibility and the consequences of rational bubbles in a dy- namic economy where financially constrained firms demand and supply liquidity. Bub- bles are more likely to emerge, the scarcer the supply of outside liquidity and the more limited the pledgeability of...
Persistent link: https://www.econbiz.de/10013130781
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The Cyclical Response of Advertising Refutes Counter-Cyclical Profit Margins in Favor of Product-Market Frictions
Hall, Robert E. - 2012
According to the standard model, advertising is remarkably sensitive to profit margins. Firms advertise to stimulate … macroeconomics, variations in profit margins over the business cycle have a key role. A widening of margins can explain the rise in … unemployment in recessions. A higher margin implies a lower real wage. A variety of models ranging from Keynesian to search-and-matching …
Persistent link: https://www.econbiz.de/10013100979
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A Theory of Firm Characteristics and Stock Returns : The Role of Investment-Specific Shocks
Kogan, Leonid - 2012
We provide a theoretical model linking firm characteristics and expected returns. The key ingredient of our model is technological shocks embodied in new capital (IST shocks), which affect the profitability of new investments. Firms' exposure to IST shocks is endogenously determined by the...
Persistent link: https://www.econbiz.de/10013107998
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The Analytics of Investment, Q, and Cash Flow
Abel, Andrew B. - 2015
operating profit of capital, I extend the model to include measurement error and analyze the cash-flow coefficient in …
Persistent link: https://www.econbiz.de/10013015553
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The Carry Trade and Fundamentals : Nothing to Fear But Feer Itself
Jorda, Oscar - 2009
The carry trade is the investment strategy of going long in high-yield target currencies and short in low-yield funding currencies. Recently, this naive trade has seen very high returns for long periods, followed by large crash losses after large depreciations of the target currencies. Based on...
Persistent link: https://www.econbiz.de/10013154539
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Farm Profits, Prices and Household Behavior
LaFave, Dan - 2020
The farm household model, in which decisions about production and consumption are made simultaneously, lies at the heart of many models of development. Empirically modelling these simultaneous choices is not straightforward. The vast majority of empirical studies assume that farm households...
Persistent link: https://www.econbiz.de/10012844296
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The Profits to Insider Trading : a Performance-Evaluation Perspective
Jeng, Leslie A. - 2008
This paper estimates the profits to insiders when they trade their company's stock. We construct a rolling purchase portfolio' that holds all shares purchased by insiders over the previous year and an analogous sale portfolio' that holds all shares sold by insiders over the previous year. We...
Persistent link: https://www.econbiz.de/10012774879
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Corporate Earnings and the Equity Premium
Longstaff, Francis A. - 2003
Corporate cash flows are highly volatile and strongly procyclical. We examine the asset-pricing implications of the sensitivity of corporate cash flows to economic shocks within a continuous-time model in which dividends are a stochastic fraction of aggregate consumption. We provide closed-form...
Persistent link: https://www.econbiz.de/10012786350
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Multinationals and the Gains from International Diversification
Rowland, Patrick F. - 2002
One possible explanation for home bias is that investors may obtain indirect international diversification benefits by investing in multinational firms rather than by investing directly in foreign markets. This paper employs mean-variance spanning tests to examine the diversification potential...
Persistent link: https://www.econbiz.de/10012787511
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A New Metric for Banking Integration in Europe
Gropp, Reint - 2010
, and high profit banks see their profits driven down quickly …
Persistent link: https://www.econbiz.de/10012757853