The paper introduces taxes on income and profit into a model of a stock market economy. The optimal choice of capital stock is then analyzed under assumptions that guarantee unanimous shareholders' preferences and a formula for the cost of capital is deduced. There then follows a discussion of...

This paper analyzes the relation between stock market valuations of firms and the optimal choice of capital stock when markets are incomplete and firms act in the interests of a majority shareholders. No spanning assumptions are made. The standard unanimity results emerge as a special case when...

In this article, we portray the state of technically diverse economies as the outcome of probabilistic equilibria. We provide the steady state distributions of current technologies, unemployment, wages and job durations thus allowing the comparison of situations with identical mean values but a...

I investigate whether the popular Krusell and Smith algorithm used to solve heterogeneous-agent economies with aggregate uncertainty and incomplete markets is likely to be subject to multiple self-fulfilling equilibria. In a benchmark economy, the parameters representing the equilibrium...

Interwar macroeconomic history is a natural place to look for evidence on the correlation between output growth and inflation or unexpected inflation. We apply time-series methods to measure unexpected inflation for more than twenty countries using both retail and wholesale prices. There is a...

The dramatic rise in Canada's average house price to average rent ratio has induced some commentators to argue that a speculative bubble is under way the collapse of which will have a calamitous effect on the economy. Others have argued, however, that the currently high level of house prices may...

Confidence intervals based on cluster-robust covariance matrices can be constructed in many ways. In addition to conventional intervals obtained by inverting Wald (t) tests, the paper studies intervals obtained by inverting LM tests, studentized bootstrap intervals based on the wild cluster...

Providing SMEs with access to external finance has been a major concern for many governments and international organizations for three decades. In recent years the experiences of emerging market countries suggest that a paradigm shift is taking place in SME finance. Particularly in fast-growing...

This study reports on the findings of a global survey of commercial banks with respect to their micro enterprise and small business financing activities. A sample of banks representing over sixty countries was examined in detail. Contrary to the general belief it is found that a large number of...