Showing 1 - 10 of 53
The confluence of three trends in the U.S. residential housing market---rising home prices, declining interest rates, and near-frictionless refinancing opportunities---led to vastly increased systemic risk in the financial system. Individually, each of these trends is benign, but when they occur...
Persistent link: https://www.econbiz.de/10012463288
present a model that explains the slow recovery of bank capital and economic activity. Banks provide intermediation in markets …
Persistent link: https://www.econbiz.de/10012480505
Harvey (2001) find that 74% of their survey firms use the CAPM for capital budgeting. We provide an explanation for these two … capital. Following McDonald and Siegel (1986), we argue that the hurdle premium depends on the value of the option to defer … value firms, even though they have a lower cost of capital …
Persistent link: https://www.econbiz.de/10012461887
on the financing of 1157 worldwide private equity deals from 1980 to 2008. Buyout leverage is cross-sectionally unrelated … availability of financing impacts booms and busts in the private equity market, and that agency problems between private equity … funds and their investors can affect buyout capital structures …
Persistent link: https://www.econbiz.de/10012462699
We exploit time variation in the degree of development of local credit markets and matched employer-employee data to assess the role of the firm as an internal credit market. In less developed local credit markets firms can offer a flatter wage-tenure profile than firms in more developed credit...
Persistent link: https://www.econbiz.de/10012462727
constrained sector absorbs less and less capital, the real interest rate in the economy declines. Other sectors that compete for … the same inputs (including capital) thus experience lower costs, which boosts investment, output, and profits, reflecting …
Persistent link: https://www.econbiz.de/10012462744
We show that household leverage as of 2006 is a powerful statistical predictor of the severity of the 2007 to 2009 recession across U.S. counties. Counties in the U.S. that experienced a large increase in household leverage from 2002 to 2006 showed a sharp relative decline in durable consumption...
Persistent link: https://www.econbiz.de/10012462755
We study corporate bond default rates using an extensive new data set spanning the 1866-2008 period. We find that the corporate bond market has repeatedly suffered clustered default events much worse than those experienced during the Great Depression. For example, during the railroad crisis of...
Persistent link: https://www.econbiz.de/10012462804
access to additional financing. Overall, the results suggest that the bundle of inputs that angel investors provide have a …
Persistent link: https://www.econbiz.de/10012462820
Problems with mortgage financing are widely considered to be a major cause of the recent financial meltdown. Several …
Persistent link: https://www.econbiz.de/10012462827