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We present a two-country OLG economy in which international capital mobility exists in the presence of moral hazard in financial contracts. The difference in the extent of asymmetric information is a source of capital movement and capital flows from the South to the North. Even though there...
Persistent link: https://www.econbiz.de/10005550438
This paper uncovers a novel mechanism by which bubbles crowd in capital investment. If capital is initially depressed by a binding credit constraint, injecting a bubble triggers a savings glut. Higher returns in a new bubbly equilibrium attract additional investors who expand investment at the...
Persistent link: https://www.econbiz.de/10011163977
This paper analyzes the boom-bust cycle driven by rational bubbles in an overlapping-generations economy that is subject to borrowing constraints. At the heart of the analysis is the interplay among savings, investment, and the interest rate. Bubbles are more likely to crowd investment in, the...
Persistent link: https://www.econbiz.de/10011123052
This paper investigates fiscal sustainability of Japan by providing a dynamic stochastic general equilibrium (DSGE) model that features the low interest rate of the government bond relative to the economic growth rate to mimic the actual data. We evaluate fiscal sustainability by investigating...
Persistent link: https://www.econbiz.de/10010869519
This paper uncovers a novel mechanism by which bubbles crowd in capital investment. If capital is initially depressed by a binding credit constraint, injecting a bubble triggers a savings glut. Higher returns in a new bubbly equilibrium attract additional investors who expand investment at the...
Persistent link: https://www.econbiz.de/10010954933
This book is a concerted attempt by economists to investigate and offer remedies for some of the difficulties associated with an ageing labor market.
Persistent link: https://www.econbiz.de/10011175377
Persistent link: https://www.econbiz.de/10005096621
Persistent link: https://www.econbiz.de/10005073266
The aim of this paper is to study the design of optimal capital structure of a "large" intermediary when the intermediary faces a non-diversifiable risk, within the standard costly-state-verification (CSV) model. I demonstrate that, under weaker conditions, a "large" intermediary realizes more...
Persistent link: https://www.econbiz.de/10005596638
Persistent link: https://www.econbiz.de/10005215508