This paper suggests a solution to what has become known as the "private equity premium puzzle" (Moskowitz and Vissing-Jorgensen (2002)). We interpret occupational choice as a dynamic portfolio choice problem of a life-cycle investor facing a liquidity constraint and imperfect information about...

Prior research hasfound thatpublicly-traded equity was a more viable option over private firms forrisk-averse investors. This finding was termedthe "private equitypremium puzzle," and two parts to this puzzle were determined: acorporate-finance dimension and a portfolio-choice dimension. Here,...

The introduction of the euro marks a milestone in the process of European financial market integration. This paper analyzes the implications of the euro for cross-border banking activities. A portfolio model is used which captures the role of banks as providers of informational and of...