This paper develops a dynamic general equilibrium model on the interaction of bankers' asset and liability management with liquidity constraint. Bankers screen real production projects and issue deposits. The liquidity constraint stems from early withdrawals of deposits. To fill the liquidity...

We develop a model in which time-varying real investment opportunities lead to time-varying adverse selection in the market for initial public offerings. The model is consistent with several stylized facts known about the IPO market: economic expansions are associated with a dramatic increase in...

How different are retailers' inventory levels around the world? Specifically, are retailers' inventories constant across countries, converging, or at least co-integrating? These might be viewed as various forms of global determinism. To see which of these forms hold, I use a novel dataset...

The discipline of operations management is rarely studied with an eye on public policies. Yet, it is glaring to even the casual observer that public infrastructure is very different in different countries. How does public infrastructure affect private sector inventory levels? I develop as a...

We develop a framework in which change in lending standards generate endogenous cycles. In particular, we study an environment in which entrepreneurs need to borrow and are privately informed about the quality of their projects. Our characterization is novel in analyzing pooling and separating...

Over the last four decades, the volatility of the firm level component of stock returns has increased relative to the market and industry components. It has also been documented that during the same period, the U.S. economy has experienced a sharp decline in the volatility of GDP growth. Do...

The objective of this research is to determine the optimal rating philosophy for the rating of SMEs, and to describe the consequences of the chosen philosophy on several related aspects. As to our knowledge, this is the first paper that studies the considerations of financial institutions on...

Firms have very different inventory levels. How much of this heterogeneity is due to differences among firms, versus among industries? Using all observations in COMPUSTAT for 1950 through 2004, we find that both industry and firm effects are significant. Further, firm effects are as strong as,...

This paper analyzes a model in which the risk associated with entrepreneurial activity implies that the amount of such activity is procyclical and results in both amplification and intertemporal propagation of productivity shocks. In the model risk averse agents choose between a riskless project...

In the last 20 years the U.S. economy has experienced a strong reduction in the volatility of GDP growth. By some measures it has declined nearly by half. This paper identifies, documents and models the rapid growth of multinational corporations as a source of gradual decline in output and...