We reexamine the issue of executive compensation within a gen-eral equilibrium production context. Intertemporal optimality placesstrong restrictions on the form of a representative manager's compen-sation contract, restrictions that appear to be incompatible with thefact that the bulk of many...

Linear Methods are often used to compute approximate solutions to dynamic models, as these models often cannot be solved analytically. Linear methods are very popular, as they can easily be implemented. Also, they provide a useful starting point for understanding more elaborate numerical...

We find that U.S. corporations' demand for liquidity is sensitive to two importantfactors: uncertainty facing the rm and the quality of corporate governance. Fol-lowing prior research, we find that both factors have important influences on firms'cash holdings. Our results also indicate that the...

A generalized correlated random walk is a process X_k of partial sums of random variables Y_j such that (X,Y) forms a Markov chain. For a sequence X^n of such processes where each Y^n_j takes only two values, we prove weak convergence to a diffusion process whose generator is explicitly...

1. Introduction 1.1 Background 1.2 Problem Setting 1.3 Research Objectives 2. Theoretical Framework 2.1 Transaction Cost Economics 2.2 Ownership Problems and Corporate Governance 3. Research Methodology 3.1 Research Location 3.2 Data Sources 3.3 Method of Analysis3.4 Classification of Variables...

This paper investigates whether the inherent non-stationarity of macroeconomic time series is entirely due to a random walk or also to non-linear components. Applying the numerical tools of the analysis of dynamical systems to long time series for the US, we reject the hypothesis that these...

It is widely acknowledged that the recent generation of DSGE models failed to incorporate many of the liquidity and financial accelerator mechanisms revealed in the global financial crisis that began in 2007. This paper complements the papers presented at the 2009 BIS annual conference focused...

This paper is motivated by the lack of any obvious relationship betweenaggregate poverty and unemployment in Great Britain. We derive aframework based on individuals’ risks of unemployment and poverty,and how these vary over the economic cycle. Analysing the BritishHousehold Panel Survey for...

When students themselves enjoy large degrees of freedom in determining the duration oftheir studies, it results in a fairly large degree of interindividual variance in terms of time-todegree.This paper investigates individual time-to-degree in a model where studentsdetermine the optimum...

This paper establishes the cyclical properties of a novel measure of worker reallocation: longdistancemigration rates within the US. This internal migration offers a bird’s eye view ofworker reallocation in the economy as long-distance migrants often change jobs oremployment status, altering...