This paper describes a business cycle model where financial contracting with interrelated covenants is the mechanism by which bondholders and stockholders confront the risks associated with future production-investment decisions and financing decisions of the firm and in the process resolves a...

I study the joint dynamics between the US wealth share, the dollar and the global economy. I uncover three novel stylised facts about these joint dynamics. Firstly, the US wealth share is countercyclical: it falls on impact but subsequently rises over the course of global recessions. Secondly...

The United States (US) extracts a large macroeconomic premium from foreigners: she enjoys higher consumption and GDP growths on average relative to the rest of the world (ROW). This is earned even though the US is relatively insulated against global consumption and GDP risks, challenging a...

The purpose of this research is to examine the interaction between financial stress and conflict risk having impacts on financial instruments in capital markets within an interdisciplinary frame. The Fuzzy TOPSIS method is applied in order to analyze effects of conflict hazard on capital markets...

Conventional wisdom says that economic surplus is created when the cost of litigation is foregone in favor of settlement, a theory flowing from the Coase Theorem. The cost-benefit analysis weighs settlement against the expected value of litigation net of transaction cost. This calculus yields...

In the nineties, average firm size decreased, organisations decentralized, and workers preferences shifted from large to small firms. Our model identifies the economic forces behind this trend. Small firms with little capital at risk are subject to risk-shifting. They realize more of their...

In June 2019 the Risk Coalition published a consultation document of their principles and guidance for board risk committees and risk functions in the UK financial services sector. This draft document entitled "Effective Risk Oversight in a Changing World" was open for public comment until 20th...

We find evidence in the OECD cross-country data to support the Knightian view that non-diversifiable economic risks shape equilibrium entrepreneurship in an occupational choice model. Differential social insurance of entrepreneurial and labor risk is found to be statistically significant and...

This paper examines whether -- in the absence of mandated disclosure requirements -- shareholder activism can elicit greater disclosure of firms' exposure to climate change risks. We find that environmental shareholder activism increases the voluntary disclosure of climate change risks,...

We examine the relation between family presence and corporate investment policy. Our analysis centers on two incentives that potentially lead to differences in investment policy between family firms and nonfamily firms: family owners' risk aversion and their real option to invest. Our findings...