This paper presents a theoretical framework for understanding the interaction between production-investment decisions on the one hand, and the associated financing decisions of nonfinancial enterprises over the business cycle. At the core of this theoretical framework is an agency problem...

This paper presents a theoretical framework for understanding the investment decisions and financing decisions of financial and nonfinancial enterprises over the business cycle. At the core of this theoretical framework is an agency problem between relatively more risk averse...

Research in corporate governance indicates that the relational framework within which firms make business decisions is very different across countries and these differences might be important in explaining differences in real economic phenomena such as growth rates in real output. On the other...

This paper presents a theoretical and empirical analysis of the portfolio adjustments and financing adjustments of U.S. banks over the business cycle. The model describes a representative bank whose portfolio is financed with deposits and equity claims. At the core of the model is a moral hazard...

This paper presents a model of the portfolio and financing adjustments of U.S. banks over the business cycle. At the core of the model is a moral hazard problem between depositors/bank regulators and stockholders. The solution to this problem takes the form of shared management of the bank....

According to Austrian macroeconomic theory, capital accumulation today generates supply tomorrow. Will that supply match tomorrow's demand? In this paper we study this question in a multi-good and risky environment with an efficient financial system. Towards this end we develop a model based on...

According to Austrian macroeconomic theory, capital accumulation today generates supply tomorrow. Will that supply match tomorrows demand? In this paper we study this question in a multi-good and risky environment with an efficient financial system. Towards this end we develop a model based on...