Discussion Papers

In the presence of overlapping generations, markets are incomplete because it is impossible to engage in risksharing trades with the unborn. In such...

We provide a model that links an asset’s market liquidity — i.e., the ease with which it is traded — and traders’ funding liquidity — i.e., the ease...

Corporate finance theories suggest that problems of asymmetric information and moral hazard in credit markets can be addressed by choosing short-term...

This paper analyzes how non-voting shares affect the takeover outcome in a single-bidder model with asymmetric information and private benefit...

We propose a model in which assets with identical cash flows can trade at different prices. Infinitely-lived agents can establish long positions in a...

Complex interactions between fundamentals and liquidity during unstable periods in financial markets are succinctly modeled with co-ordination games...

This paper solves for a firm’s optimal cash holding policy within a continuous time, contingent claims framework that has been extended to incorporate...

We analyze the structure and evolution of the allocation of decision and control rights in venture capital contracts by using a sample of 464...

We study the role of prestige and social networks in the selection of outside directors, and the subsequent effect on firm value. Both prestige and...

Recovery rates are negatively related to default probabilities (Altman et al., 2005). This paper proposes and estimates a model in which this...

When a firm has external debt and monitoring by shareholders is essential, managerial bonuses are shown to be an optimal solution. A small managerial...

For a large number of companies from different countries, we analyze how company corporate governance practices and country regulatory regimes...

We provide a test of the Monday effect in daily stock index returns. Unlike previous studies we define the Monday effect based on the stochastic...

A reduction in inflation can fuel run-ups in housing prices if people suffer from money illusion. For example, investors who decide whether to rent or...

In many countries, pension funds based on individual accounts have been affected by high operating costs. Contract theory helps to unravel the nature...

This paper analyzes the welfare effects of economic transparency in the conduct of monetary policy. We propose a model of monopolistic competition...