Discussion Papers

This paper investigates a negative externality of new business creation. When being perceived as a good manager is a necessary condition to establish...

Given that, in equilibrium, all agents freely opt for strictly positive own coverage, competitive models of asymmetric information predict a positive...

This paper examines persistence over time in the performance of fund managers responsible for making the investment decisions of UK pension funds...

This paper shows that many of the empirical biases of the Black and Scholes option pricing model can be explained by Bayesian learning effects. In the...

We consider the impact of history on the survival of a monopolist selling single units in discrete time periods, whose quality is learned slowly. If...

Risk management systems in current use treat the statistical relations governing asset returns as being exogenous, and attempt to estimate risk only...

It is often argued that asset prices exhibit patterns incompatible with the behaviour of rational, optimising agents. This paper proposes a rational...

Recent debate on the reform of the international financial architecture has highlighted the potentially important role of the official sector in...

We study the relation of financial development and the pace of technological advance in a dynamic agency theoretic model. A firm which is financed by...

This paper investigates, in a simple model of overlapping moral hazard problems between banks and firms, how the number of bank relationships affect...

The paper sets out to tackle the following puzzle when insiders of a firm have more information than outside investors. The insiders' desire to sell...

In this paper we explain the apparent "diversification discount" of conglomerates without assuming inefficient-cross subsidisation through internal...

We develop generalised indirect inference procedures that handle equality and inequality constraints on the auxiliary model parameters. We also show...

In this paper we provide a characterisation of the welfare properties of rational expectations equilibria of economies in which, prior to trading...

“Cash is dirty ... Cash is heavy ... Cash is inequitable ... Cash is quaint, technologically speaking ... Cash is expensive ... Cash is obsolete.”...

Two features distinguish residential real estate from financial assets: households’ consumption demand for a dwelling and the indivisibility of...