This paper presents a model of the portfolio and financing adjustments of U.S. banks over the business cycle. At the core of the model is a moral hazard problem between depositors/bank regulators and stockholders. The solution to this problem takes the form of shared management of the bank....

This paper formulates and empirically tests a model that describes the balance sheet adjustments of debt and equity financed U.S. nonfinancial enterprises over the twentieth century. In this model asset adjustments change the expected income and operating risk of firms while financing...

This paper presents a theoretical framework for understanding the interaction between production-investment decisions on the one hand, and the associated financing decisions of nonfinancial enterprises over the business cycle. At the core of this theoretical framework is an agency problem...

This paper presents a theoretical framework for understanding the investment decisions and financing decisions of financial and nonfinancial enterprises over the business cycle. At the core of this theoretical framework is an agency problem between relatively more risk averse...

Research in corporate governance indicates that the relational framework within which firms make business decisions is very different across countries and these differences might be important in explaining differences in real economic phenomena such as growth rates in real output. On the other...

This paper presents a theoretical and empirical analysis of the portfolio adjustments and financing adjustments of U.S. banks over the business cycle. The model describes a representative bank whose portfolio is financed with deposits and equity claims. At the core of the model is a moral hazard...

This paper presents a model of the portfolio and financing adjustments of U.S. banks over the business cycle. At the core of the model is a moral hazard problem between depositors/bank regulators and stockholders. The solution to this problem takes the form of shared management of the bank....

In this paper I develop a model that focuses attention on the financial side of business cycles. Investors in this model separate into bondholders and stockholders based on differences in risk aversion that creates a conflict of interest problem for the future management of the representative...

This paper describes a parsimonious macro-finance model where contracts are the mechanism by which differentially risk averse bondholders and stockholders resolve a conflict of interest problem and confront the risks associated with future investment and financing decisions of a representative...

In this paper I develop a model of a debt and equity financed representative firm whose production/investment decisions and financing decisions characterize business cycles. The conflict of interest problem between the differentially risk averse debt and equity investors is resolved with an...