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against price volatility can generate price volatility in equilibrium, even absent fundamental risk. Fearing that asset prices …
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. These features motivate us to build a model in which increased volatility of firm level productivity shocks generates a … limit firms' ability to insure against shocks. Hence, an increase in idiosyncratic volatility induces firms to reduce their …
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. These features motivate us to build a model in which increased volatility of firm level productivity shocks generates a … limit firms' ability to insure against shocks. Hence, an increase in idiosyncratic volatility induces firms to reduce their …
Persistent link: https://www.econbiz.de/10012966608
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What sows the seeds of financial crises and what policies can help avoid them? To address these questions, I model the interaction between the ex-ante production of assets and ex-post adverse selection in financial markets. My results indicate that taking into account the endogenous asset supply...
Persistent link: https://www.econbiz.de/10012950995