The transcript of a panel discussion marking the fiftieth anniversary of John Muth's "Rational Expectations and the Theory of Price Movements" (Econometrica 1961). The panel consists of Michael Lovell, Robert Lucas, Dale Mortensen, Robert Shiller, and Neil Wallace. The discussion is moderated by...

In the first article, I examine managers' decision to pay dividends with a dynamic cash model. The model departs from the Modigliani and Miller world according to two dimensions: Agency costs and financing frictions. In this paper, I show that managers with more valuable outside options pay more...