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This paper clarifies why optimal corporate governance generally excludes monetary liability for breach of directors … liability could impose less risk on directors and managers, and provide better risk-taking incentives, than standard performance … liability incentives is not absolute but a cost-benefit trade-off. Litigation is expensive, while the benefits from refining …
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Whereas some central bank derivatives and other contingent liabilities arise from anomalous circumstances, there are a number of positive reasons that explain their popularity. After analyzing the rationale for these operations, we stress that most of these operations, being off-balance sheet,...
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The demographic transition can affect the equilibrium real interest rate through three channels. An increase in longevity - or expectations thereof - puts downward pressure on the real interest rate, as agents build up their savings in anticipation of a longer retirement period. A reduction in...
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the money multiplier model/strict money-rule model) and the interest rate-focused model. The former only exists in theory …
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