Performance evaluation, Uncertainty, Risk-sharing, Controllability

S. D. Deshmukh, S. D. Chikte; Dynamic Pricing with Stochastic Entry, The Review of Economic Studies, Volume 43, Issue 1, 1 February 1976, Pages 91–97, https://d

This study provides, as a result of comprehensive search, a better description of the intertemporal behaviors of corporate debt policy, comparable to those that exist for dividend policy. Although leverage policy may vary a great deal from firm to firm, we found that: (1) The rather simple partial adjustment model with constant payout ratio to have the best predictive performance and other superior models include the first-order markov process and the historical average leverage ratio; (2) in general, firms seem to operate with a concept of “target leverage ratio, ” e.g., target ratio computed from the partial adjustment models, or from historical or industry averages; (3) there is some weak evidence of the presence of unused debt capacity for the total sample; (4) the average speed of adjustment to close the gap between the desired and actual leverage ratio is a respectable 67 percent in the first year (due to the lumpiness of debt issue, individual firms tend to be either under or overadjusted); (5) there are some indications that firms also adjust debt behavior to anticipated future increases or decreases in assets.There are several areas for future research, for instance, the best debt model could serve as the first stage of a possible two-stage equation in the empirical verification of the MSM's assumption of the independence of the investment decision to the financing decision (e.g., [7]), on a further exploration of how firms' expectations affect debt behavior. Finally, the existence of a rational target leverage ratio should encourage research interest concerning the existence of an empirically testable optimal leverage ratio.

Recent financial literature has discussed how a creditor should determine its investigation and extension policy. Mehta [8, 9] has developed a sequential process for credit extension, and others [1, 2, 4, 7, 10, 12, 14] have used credit-scoring functions to develop decisions rules. Instead of discussing the use of a particular system or the development of a new system, this paper shifts the focus to selection of the best of alternative systems. Different creditors face different profit-loss ratios on loans, business volume, and prior probabilities of good and bad customers. Furthermore, since the alternative systems have different initial costs, effectiveness, and investigation costs per application, no one system is optimal for all creditors. Finally, any credit-scoring alternative declines in effectiveness over time. Measurement of the overall effectiveness of a system requires that the optimal time between updating the system be known.

In this paper, a short-run partial-adjustment model of the demand for credit union shares was specified and estimated with time series data. The estimated results were used to derive long-run, equilibrium demand coefficients and elasticities. The main conclusions are that credit union shares are substitutes for deposits at savings and loan associations, time and savings deposits at commercial banks, and marketable bonds. Moreover, the implications of the statistical results are that credit union and savings and loan shares are more closely related to more liquid assets than to long-term assets. While real income was employed as a constraint variable, it was employed as a maintained hypothesis since the use of a wealth constraint led to perverse results. Also, some evidence was presented that the elasticities of the demand function for credit union shares are different from those of an aggregate savings deposits function. Thus, it is likely that an aggregate demand function will contain aggregation bias.

[The paper derives a function that describes the size distribution of incomes. The two functions most often used are the Pareto and the lognormal. The Pareto function fits the data fairly well towards the higher levels but the fit is poor towards the lower income levels. The lognormal fits the lower income levels better but its fit towards the upper end is far from satisfactory. There have been other distributions suggested by Champernowne, Rutherford, and others, but even these do not result in any considerable improvement. The present paper derives a distribution that is a generalization of the Pareto distribution and the Weibull distribution used in analyses of equipment failures. The distribution fits actual data remarkably well compared with the Pareto and the lognormal.]

S. S. L. Chang, H. O. Stekler; Optimal Stabilization Policies for Deterministic and Stochastic Linear Systems: Comments, The Review of Economic Studies, Volume

Journal Article Alvin Hansen and the Fiscal Policy Seminar Get access Walter S. Salant Walter S. Salant Brookings Institution Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 90, Issue 1, February 1976, Pages 14–23, https://doi.org/10.2307/1886082 Published: 01 February 1976

Journal Article The Weighting Problem in Testing the Linkage Hypothesis Get access Prem S. Laumas Prem S. Laumas Northern Illinois University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 90, Issue 2, May 1976, Pages 308–312, https://doi.org/10.2307/1884632 Published: 01 May 1976