This paper presents a general equilibrium analysis under uncertainty of the firm's optimal investment decision. The set up is a well developed two-period model of a stock market economy. A theorem provides necessary and sufficient conditions for shareholder unanimity and a general investment...

This paper analyzes the relation between stock market valuations of firms and the optimal choice of capital stock when markets are incomplete and firms act in the interests of a majority shareholders. No spanning assumptions are made. The standard unanimity results emerge as a special case when...

The paper introduces taxes on income and profit into a model of a stock market economy. The optimal choice of capital stock is then analyzed under assumptions that guarantee unanimous shareholders' preferences and a formula for the cost of capital is deduced. There then follows a discussion of...

David Ricardo (1772-1823) and Thomas Tooke (1774-1858) were contemporaries in the ‘golden era’ of English classical economics, along with Malthus, Torrens and McCulloch. The central figure in that era was undoubtedly Ricardo with his vital contributions to the ‘core’ analysis of value...

We use longitudinal data on stock prices of cross-listed firms to investigate abnormal systematic changes in the price disparity of cross-listed stocks between the Hong Kong and Shanghai exchanges from 2002 to 2014. We identify a liberalization policy that generated an unprecedented abrupt...

The ability to share intentions and adjust one's choices in collaboration with others is a fundamental aspect of human nature. We discuss the forces that would have acted for and against the evolution of this ability for a large class of dilemmas and coordination problems that would have been...

In this paper we document rise in wage inequality in Australia over the last decade. A key driver of this inequality is unobservable or residual inequality. We decompose residual wage inequality into permanent and transitory components. The estimates of the permanent shock from the first...