Showing 1 - 10 of 12,060
This paper studies a competitive general equilibrium model with default and endogenous collateral constraints. Even though all collateralized contracts are allowed, the possibility and desirability of trade in spot markets (or the equivalent trade in ex ante asset backed securities) creates...
Persistent link: https://www.econbiz.de/10008552792
others by reducing their profit margins. The paper thus founds capital adequacy regulation upon the market failure and … suggests that this regulation should bind not only commercial banks, but all financial intermediaries, including private …
Persistent link: https://www.econbiz.de/10008578246
improving taxes exist. I show how to verify this sensitivity test with standard demand theory, which Turner (2003a) extends from …
Persistent link: https://www.econbiz.de/10005702672
This paper articulates a logical foundation-drawn from disparate literatures-for understanding why safeguarding financial stability is an important economic policy objective. The paper also explains why private aspects of finance provide broader social economic benefits and have the...
Persistent link: https://www.econbiz.de/10005765490
This study investigates the role of social networks in aligning the incentives of economic agents in settings with incomplete contracts. We study the New York City taxi industry where taxis are often leased and lessee-drivers have worse driving outcomes than owner-drivers as a result of a moral...
Persistent link: https://www.econbiz.de/10008531880
A 'folk theorem' originating, among others, in the work of Stiglitz maintains that competitive equilibria are always or 'generically' inefficient (unless contracts directly specify consumption levels as in Prescott and Townsend, thus bypassing trading in anonymous markets). This paper critically...
Persistent link: https://www.econbiz.de/10008468520
In this paper we incorporate interdisciplinary New Institutional and Transaction Costs Economics (combining Economics, Organization, Law, Sociology, Behavioral and Political Sciences), and suggest a framework for analyzing and improvement of governance of socio-economics dynamic of agriculture....
Persistent link: https://www.econbiz.de/10008587477
We model the opacity of over-the-counter (OTC) markets in a setup where agents share risks, but have incentives to default and their financial positions are not mutually observable. We show that this setup results in excess "leverage" in that parties take on short OTC positions that lead to...
Persistent link: https://www.econbiz.de/10009004115
Short and long run production is introduced in a two period general equilibrium model with incomplete markets, where firms are profit maximizers. They maximize profits in the long run, which implies profit maximization over both periods. The sequential structure of the model is such that, firms...
Persistent link: https://www.econbiz.de/10005042044
This paper presents an equilibrium model for the demand and supply of liquidity and its impact on asset prices and welfare. We show that when constant market presence is costly, purely idiosyncratic shocks lead to endogenous demand of liquidity and large price deviations from fundamentals....
Persistent link: https://www.econbiz.de/10012721240