When entrants only differ in their exogenous entry costs, the order in which potential firms enter does not affect industry size. With discrete competitors, entry orderings can affect total sunk costs and the identity of entrants. A necessary and sufficient condition is established for sunk,...

This paper presents a closed form solution to the portfolio adjustment problem in discrete time when the investor faces fixed transaction costs. This transaction cost model assumes a mean-variance investor who wants to adjust her holdings of a risky and risk-free asset. It is shown how this...

This note ranks the Federal Reserves based on the tenure of their chairs from William McChesney Martin, Jr. to Janet L. Yellen, using data from 1958 through 2018. Inflation “doves” are willing to tolerate more inflation than inflation “hawks.” Comparing the Taylor (1993) rule and core...

This is the first study to look at the characteristics of funds accepting the $2.7 trillion taxpayer guarantee of money market mutual funds during the 2008 financial crisis. Fund shares that benefited from Federal Reserve's asset-backed commercial paper program were significantly more likely to...

Most of the banks receiving capital injections from the Troubled Asset Relief Program (TARP) issued preferred stock to taxpayers. This paper looks at the factors that affect publicly traded banks' ability to pay the scheduled TARP preferred stock dividends. Smaller banks with weaker capital...

If a bank is facing insolvency, it will be tempted to reject good loans and accept bad loans so as to shift risk onto its creditors. We analyze the effectiveness of buying up toxic mortgages in troubled banks, buying preferred stock, and buying common stock. If bailing out banks deemed “too...

The increased frequency of auctions versus negotiations has ensured that taxpayers are justly rewarded for their risky investments in the banking sector. Contrary to the banking lobby's early propaganda, the Troubled Asset Relief Program (TARP) warrants have proven to be very valuable raising...

Forty-eight credit unions received capital injections as part of the financial sector bailout. The predicted probability of receiving bailout funds jumps from 29 percent to 81 percent for the typical credit union, if the institution's headquarters was in the district of a member of the U.S....

(Zheng, 2009) does not realize that the government provides nonrecourse loans to investors to buy toxic assets. Nonrecourse loans allow the borrower to walk away from the loan with no penalties besides ceding the asset that the loan purchased. Thus (Zheng, 2009)'s conclusions that less well...