Showing 1 - 10 of 17,512
This paper presents a model in which cash holding imposes a negative externality because it worsens future adverse selection in markets for long-term assets, which impairs their role for liquidity provision. Adverse selection worsens when potential sellers of long-term assets hold more cash...
Persistent link: https://www.econbiz.de/10013099217
"Standard" environmental economics considers emissions trading to be the most effective and efficient policy instrument to meet the emission target. However, a popular view is that tradeable permits should be part of a policy portfolio, including other instruments, to reach this goal. Support...
Persistent link: https://www.econbiz.de/10014053385
We study the optimality of taxing capital income according to a Rate-of-Return Allowance proposed by the Mirrlees Review. In a mean-variance framework the optimal tax on risk-free returns is zero with constant returns to scale in private investment, but positive with decreasing returns to scale,...
Persistent link: https://www.econbiz.de/10012962987
Elementary portfolio theory implies that environmentalists optimally hold more shares of polluting firms than non-environmentalists, and that polluting firms attract more investment capital than otherwise identical non-polluting firms. These results reflect the demand to hedge against high...
Persistent link: https://www.econbiz.de/10012849985
We study the optimal taxation of risk-free and excess capital income with heterogeneous rates of return, alongside an optimal nonlinear earnings tax. Households can hold three assets: one risk-free, one risky but diversifiable, and one a private investment with idiosyncratic risk whose expected...
Persistent link: https://www.econbiz.de/10013238194
We study the optimality of taxing capital income according to a Rate-of-Return Allowance proposed by the Mirrlees Review. In a mean-variance framework the optimal tax on risk-free returns is zero with constant returns to scale in private investment, but positive with decreasing returns to scale,...
Persistent link: https://www.econbiz.de/10011588034
We study the optimal taxation of risk-free and excess capital income with heterogeneous rates of return, alongside an optimal nonlinear earnings tax. Households can hold three assets: one risk-free, one risky but diversifiable, and one a private investment with idiosyncratic risk whose expected...
Persistent link: https://www.econbiz.de/10012487914
Carbon pricing regulates emission flows and collects rents from underlying fossil resource stocks. The resulting investment shift implies lower climate policy costs and improved welfare if capital is underaccumulated. We prove that under emission trading, such a beneficial macroeconomic...
Persistent link: https://www.econbiz.de/10013029498
In this study, we employ a statistical arbitrage approach to demonstrate that momentum investment strategy tend to work better in periods longer than six months, a result different from findings in past literature. Compared with standard parametric tests, the statistical arbitrage method...
Persistent link: https://www.econbiz.de/10013091434
This paper characterizes how firms' strategic interaction in product markets affects the industry dynamics of investment and expected returns. In imperfectly competitive industries, a firm's exposure to systematic risk is jointly affected by its own investment strategy and the investment...
Persistent link: https://www.econbiz.de/10013039458