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Financial Integration and Liquidity Crises
Castiglionesi, Fabio - 2017
allows banks in different regions to smooth local liquidity shocks by borrowing and lending on a world interbank market. We … show under which conditions financial integration induces banks to reduce their liquidity holdings and to shift their … portfolios towards more profitable but less liquid investments. Integration helps reallocate liquidity when different banks are …
Persistent link: https://www.econbiz.de/10012455322
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Creditor rights and corporate risk-taking
Acharya, Viral V. - 2009
We analyze the link between creditor rights and firms' investment policies, proposing that stronger creditor rights in bankruptcy reduce corporate risk-taking. In cross-country analysis, we find that stronger creditor rights induce greater propensity of firms to engage in diversifying...
Persistent link: https://www.econbiz.de/10012463080
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Market Liquidity, Asset Prices and Welfare
Huang, Jennifer - 2008
This paper presents an equilibrium model for the demand and supply of liquidity and its impact on asset prices and … liquidity and large price deviations from fundamentals. Moreover, market forces fail to lead to efficient supply of liquidity … efficiency consequences. For example, lowering the cost of supplying liquidity on the spot (e.g., through direct injection of …
Persistent link: https://www.econbiz.de/10012464588
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Why High Leverage is Optimal for Banks
DeAngelo, Harry - 2013
Liquidity production is a central role of banks. We show that, under idealized conditions, high leverage is optimal for … zero weight to the social value of liquidity, it is an inappropriately equity-biased baseline for assessing whether the …
Persistent link: https://www.econbiz.de/10012459523
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Productivity, welfare and reallocation : theory and firm-level evidence
Basu, Susanto (contributor) - 2010
"We prove that the change in welfare of a representative consumer is summarized by the current and expected future values of the standard Solow productivity residual. The equivalence holds if the representative household maximizes utility while taking prices parametrically. This result justifies...
Persistent link: https://www.econbiz.de/10011394520
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Demographic Fluctuations, Generational Welfare and Intergenerational Transfers
Young, Alwyn - 2001
This paper extends the Ramsey model's normative analysis to issues of generational welfare and intergenerational transfers. A planner, who maximizes the discounted welfare of an endless stream of generations, is intrinsically biased against larger cohorts, which are more costly to provide...
Persistent link: https://www.econbiz.de/10012470188
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Borders, Trade and Welfare
Anderson, James E. - 2001
International economic integration yields large potential welfare effects, even in a static constant returns competitive world economy. Our method is novel. The effect of border barriers on trade flows is often inferred from gravity models. But their rather atheoretic structure precludes welfare...
Persistent link: https://www.econbiz.de/10012470203
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New Products, Quality Changes and Welfare Measures Computed From Estimated Demand Systems
Nevo, Aviv - 2001
This paper examines the construction of a price index based on an estimated demand system. In principle the method examined can produce a price index that accounts for introduction of new products and quality changes in existing products. However, I isolate two key assumptions that have to be...
Persistent link: https://www.econbiz.de/10012470294
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Temporary Controls on Capital Inflows
Reinhart, Carmen M. - 2001
During the past decade a number of countries imposed capital controls that had two distinguishing features: they were asymmetric, in that they were designed principally to discourage capital inflows, and they were temporary. This paper studies formally the consequences of these policies,...
Persistent link: https://www.econbiz.de/10012470297
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Inflation Stabilization and Welfare
Woodford, Michael - 2001
This paper derives loss functions for monetary policy that are grounded in the welfare of private agents, for optimizing models with nominal price rigidities. Inflation stabilization enhances welfare, insofar as variable inflation results in real distortions when prices are not adjusted...
Persistent link: https://www.econbiz.de/10012470658