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Aggregate Consequences of Limited Contract Enforceability

Cooley, Thomas - 2003

We study a general equilibrium model in which entrepreneurs finance investment with optimal financial contracts. Because of enforceability problems, contracts are constrained efficient. We show that limited enforceability amplifies the impact of technological innovations on aggregate output....

Persistent link: https://www.econbiz.de/10012468562

Courts and Relational Contracts

Johnson, Simon - 2001

Post-communist countries offer new evidence on the relative importance of courts and relationships in enforcing contracts. Belief in the effectiveness of courts has a significant positive effect on the level of trust shown in new relationships between firms and their customers. Well-functioning...

Persistent link: https://www.econbiz.de/10012470146

Imperfect Contract Enforcement

Anderson, James E. - 2002

We model imperfect contract enforcement when repudiators and their victims default to spot trading. The interaction … between the contract and spot markets under improved enforcement can exacerbate repudiation and reduce contract execution …, harming all traders. Improved contract execution benefits traders on the excess side of the spot market by attracting …

Persistent link: https://www.econbiz.de/10012469868

Coercive Contract Enforcement : Law and the Labor Market in 19th Century Industrial Britain

Naidu, Suresh - 2011

British Master and Servant law made employee contract breach a criminal offense until 1875. We develop a contracting … model generating equilibrium contract breach and prosecutions, then exploit exogenous changes in output prices to examine … prosecutions, and wages responded more to labor demand shocks. Coercive contract enforcement was applied in industrial Britain …

Persistent link: https://www.econbiz.de/10012461607

Social Networks as Contract Enforcement : Evidence from a Lab Experiment in the Field

Chandrasekhar, Arun G. - 2014

Absence of well-functioning formal institutions leads to reliance on social networks to enforce informal contracts. Social ties may aid cooperation, but agents vary in network centrality, and this hierarchy may hinder cooperation. To assess the extent to which networks substitute for...

Persistent link: https://www.econbiz.de/10012458407

On the Gains to International Trade in Risky Financial Assets

Davis, Steven J. - 2000

This paper develops and implements a framework for quantifying the gains to international trade in risky financial assets. The framework can handle may agents, many assets, incomplete markets and limited participation in asset markets. It delivers closed-form analytic solutions for consumption,...

Persistent link: https://www.econbiz.de/10012470954

Trade, Insecurity, and Home Bias : An Empirical Investigation

Anderson, James E. - 1999

Corruption and imperfect contract enforcement dramatically reduce trade. This paper estimates the reduction, using a …

Persistent link: https://www.econbiz.de/10012471800

Global Diversification, Growth and Welfare with Imperfectly Integrated Markets for Goods

Dumas, Bernard - 1999

In this article, we examine the effect of the imperfect mobility of goods on international risk sharing and, through that, on the investment in risky projects, welfare and growth. We find that the welfare gain of financial market openness is not monotonic with respect to investors' risk aversion...

Persistent link: https://www.econbiz.de/10012471806

An Information-Based Model of Foreign Direct Investment : The Gains from Trade Revisited

Razin, Assaf - 1999

Foreign direct investment (FDI) is observed to be a predominant form of capital flows to emerging economies, especially when they are liquidity-constrained internationally during a global financial crisis. The financial aspects of FDI are the focus of the paper. We analyze the problem of...

Persistent link: https://www.econbiz.de/10012471927

Factor Market Barriers are Trade Barriers : Gains From Trade in 1992

Baldwin, Richard - 1988

traditional trade theory, the gains will come only with permanent resource migration and significant factor price changes (since …

Persistent link: https://www.econbiz.de/10012476408

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