This study uses data from the 2002 and 2004 Health and Retirement Study to investigate the impact that health problems have on the financial strain of older Americans. Two-stage probit models are estimated for a series of financial ratio guidelines that take into account household solvency,...

This paper reexamines the determinants of credit default swaps (CDS) spreads in the U.S., Europe, and Asia-Pacific markets with a new data set using linear regressions. These determinants are categorized into two groups: firm level and macroeconomic variables. We also include two non-traditional...

The empirical literature identifying gains from financial innovation to financial institution stockholders is sparse. The literature identifying financial firms’ contributions to stockholder value resulting from long term commitment to innovation is, to our knowledge, nonexistent. Several...

Because of the dynamic inconsistency problem in optimal policies of pay-as-you-go (PAYG) systems, parametric reforms tend to be unfair in terms of generational justice and could be inefficient in terms of optimal level of consumption. As long as there are adverse shocks, the planner has to...

This paper surveys the theoretical and empirical literature on group lending programs in developing countries, with a focus on the determinants of repayment performance.

This paper revisits the conventional wisdom on the determinants of the success of microcredit programs. The paper first develops a simple moral hazard model of borrowing in a group lending context, and then tests this model using data from a survey conducted in Bangladesh in 1991-92. One of the...

Existing literature has focused attention on the impact of Basel I and similar capital requirement regulations on developed countries where such regulations were found to be effective in increasing capital ratios and reducing portfolio credit risk of commercial banks. In the present study, we...

This paper develops a model of the strategic interaction of borrowers in the framework of group lending, in an environment characterized by moral hazard. Unlike previous papers, monitoring by one group member of his or her peers is not a crucial feature of the model. Even without monitoring,...

We offer a novel explanation of underwriting volatility in propertyliability insurance markets in terms of private uncertainty over public regulatory policy. Underwriting involving random losses to policyholders is one source of risk to the equity value of insurance firms. Solvency regulations,...

Requiring taxes to be paid in domestic money provides a legal tender basis for money demand and hence to the development of a financial system. In emerging markets, the level of taxation is a positive factor boosting financial development. At higher tax rates, however, taxation provides an...