This paper studies the asset pricing implications of a general equi-librium model in which real investment is reversible at a cost. Firmsface higher costs in contracting than in expanding their capital stockand decide to invest when their productive capital is scarce relativeto the overall...

The article re-examines the proposition, first formulated by Bryant (1980) and Diamond and Dybcvig ( 1983), that in a production economy with stochastic liquidity shocks to the household sector, banks serve to provide optimal intertemporal insurance to consumers. The paper argues that in order...

The paper analyses the problem of optimal liquidity provision in simple continuous-time general-equilibrium model under uncertainty. It argues that liquidity provision is subject to moral-hazard problems due to the unobservebility of households' characteristics and characterizes...

In this article we define a Recursive Competitive Equilibrium, provide an example and review the related literature. The article is an entry prepared for The New Palgrave: A Dictionary of Economics, 2nd Edition (Palgrave Macmillan: New York).

This paper studies the asset pricing implications of a general equi- librium model in which real investment is reversible at a cost. Firms face higher costs in contracting than in expanding their capital stock and decide to invest when their productive capital is scarce relative to the overall...

This paper develops a continuous-time model of liquidity provision by banks, in which customers can deposit and withdraw their funds strategically. The strategic withdrawal option introduces an incentive-compatibility problem that turns the problem of designing deposit contracts into a...

I propose a general-equilibrium model with investment heterogeneity to investigate the dynamics of Tobin's q over time, and more precisely why firms tend to migrate from value to growth and viceversa. Firms are assumed to have two types of investment opportunities: i) reinvest capital in the own...

We present a dynamic general equilibrium model with heterogeneous firms. Owners of the firms delegate investment decisions to managers, whose consumption and investment are private information. We solve the optimal incentive compatible contracts and characterize the implied firm dynamics....

This paper analyzes the timing and density of urban development using a new intertemporal model featuring stochastic housing demand, a finite price elasticity of demand, cross-sectional variation in the amenity value of land, and property taxes. Equilibrium rent and house prices in a city are...

The present paper examines impacts of foreign exchange rates against the Sudanese currency on savings. The increasing rates of foreign currencies in the domestic Sudanese Black markets have simultaneously resulted in the continuous depreciated Sudanese currency values over the past year...