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The Economics of Time-Limited Development Options : The Case of Oil and Gas Leases
Herrnstadt, Evan M. - 2020
Oil and gas leases between mineral owners and extraction firms ubiquitously include royalty and primary term clauses. The royalty denotes the share of revenue that is paid to the mineral owner, and the primary term specifies the date by which the firm must complete a well, lest it lose the...
Persistent link: https://www.econbiz.de/10012481748
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Liquidation Values and the Credibility of Financial Contract Renegotiation : Evidence from U.S. Airlines
Benmelech, Efraim - 2008
How do liquidation values affect financial contract renegotiation? While the 'incomplete contracting' theory of financial contracting predicts that liquidation values determine the allocation of bargaining power between creditors and debtors, there is little empirical evidence on financial...
Persistent link: https://www.econbiz.de/10012464587
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The Role of Leasing under Adverse Selection
Hendel, Igal - 1998
Leasing contracts specify a rental rate and an option price at which the used good can be bought at the termination of … prices. In contrast, under adverse selection, leasing contracts affect equilibrium allocations in a way that matches observed … behavior in the car market. We show that a social planner can use leasing contracts to improve welfare but they are imperfect …
Persistent link: https://www.econbiz.de/10012472232
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Owning, Using and Renting : Some Simple Economics of the "Sharing Economy"
Horton, John J. - 2016
New Internet-based markets enable consumer/owners to rent out their durable goods when not using them. Such markets are modeled to determine ownership, rental rates, quantities, and surplus generated. Both the short run, before consumers can revise their ownership decisions, and the long run, in...
Persistent link: https://www.econbiz.de/10012456645
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Measuring The Natural Rate Using Natural Experiments
Bäcker-Peral, Verónica; Hazell, Jonathon; Mian, Atif - National Bureau of Economic Research - 2023
Every month, a fraction of UK property leases are extended for another 90 years or more. We use new data on thousands of these natural experiments from 2003 onwards to estimate the "natural rate of return on capital", \(r_K^\text{*}\), which also represents the long-run dividend-price ratio....
Persistent link: https://www.econbiz.de/10014421185
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Financial Innovation in the 21st Century : Evidence from U.S. Patents
Lerner, Joshua; Seru, Amit; Short, Nick; Sun, Yuan - National Bureau of Economic Research - 2021
We develop a unique dataset of 24 thousand U.S. finance patents granted over last two decades to explore the evolution and production of financial innovation. We use machine learning to identify the financial patents and extensively audit the results to ensure their reasonableness. We find that...
Persistent link: https://www.econbiz.de/10012599270
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Financial Innovation and the Control of Monetary Aggregates : Some Evidence from Canada
Lucas, Robert E, Jr - 1983
This paper presents an empirical test of the proposition that control of a monetary aggregate will generate a rise in its velocity.The test is carried out utilizing the Canadian experience of controlling Ml growth from 1975:3 to 1982:3. Section One of the paper presents evidence of the...
Persistent link: https://www.econbiz.de/10012477944
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Purchasing-Power Annuities : Financial Innovation for Stable Real Retirement Income in an Inflationary Environment
Bodie, Zvi - 1980
This paper is organized as follows: The first part of the paper introduces the topic. In the next part, we explore the inadequacies of conventional and equity-based variable annuities in an inflationary environment by contrasting them with a hypothetical PPA. We then try to assess the...
Persistent link: https://www.econbiz.de/10012478703
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Retail Financial Innovation and Stock Market Dynamics : The Case of Target Date Funds
Parker, Jonathan A.; Schoar, Antoinette; Sun, Yang - National Bureau of Economic Research - 2020
The rise of Target Date Funds (TDFs) has moved a significant share of retail investors into contrarian trading strategies that rebalance between stocks and bonds so as to maintain age-appropriate portfolio shares. We show that i) TDFs actively rebalance within a few months following differential...
Persistent link: https://www.econbiz.de/10012482247
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The Consequences of Financial Innovation : A Counterfactual Research Agenda
Lerner, Josh - 2011
Financial innovation has been both praised as the engine of growth of society and castigated for being the source of the weakness of the economy. In this paper, we review the literature on financial innovation and highlight the similarities and differences between financial innovation and other...
Persistent link: https://www.econbiz.de/10012461877