We examine the convertible bonds whose conversion prices can be reset under certain conditions, by extending the asymmetric information framework of Stein (1992). These convertibles are more common in Japan and China and are in sharp contrast with the convertible bonds with fixed conversion...

This paper investigates whether the occurrences of business cycles have caused the fluctuations of real interest rates in the US. Based on a standard consumption-based asset pricing model, the model incorporates a new feature that investors have to learn about the unobservable alternations...

The energy ratio metrics are increasingly important means of assessing the efficiency of energy production for emerging biofuels platforms, making comparisons among multiple alternatives, and formulating policies to foster commercialization of sustainable energy systems. However, these metrics...

This paper examines empirical evidence of the adaptive learning behavior of speculators in the 2005–2008 renminbi appreciation episode, and establishes a theoretical model to explore appreciation policy implications of such a behavior. In our model, speculators form their expectations about...

The transmission of monetary policy is studied in an environment in which aggregate liquidity shocks affect agents asymmetrically. Agents are subject to random liquidity requirements and interact with banks which both take deposits and make loans. Banks may issue loans in excess of their...

This paper studies contagion and market freezes caused by uncertainty in financial network structures and provides theoretical guidance for central banks. We establish a formal model to demonstrate that, in a financial system where financial institutions are interconnected, a negative shock to...