The analysis in this paper shows that unpredictable variations in economic productivity may have a positive or negative effect on the average growth rate of output. This theoretical ambiguity result is not solely determined by the value of the elasticity of intertemporal substitution (of...

We examine interactions between investment and financing decisions in a dynamic model where the firm can alter the mix of debt and equity financing and exercise a randomly arriving and potentially short lived growth option. The firm will typically finance the exercise of the growth option with...

As elsewhere in the world, in the Western Balkans the COVID-19 pandemic has plunged countries into deep recession. Because of the recession, labor market conditions have taken a turn for the worse and welfare improvements have been interrupted, although government response measures cushioned the...