Using survey data on secured funding arrangements provided by broker–dealers for their clients—a class of contracts that includes bilateral repo—we document that financing rates, collateral haircuts, lending maturities, and position limits move strongly together over time and across asset classes. Liquidity of the underlying securities, as opposed to their volatility or credit risk, is the main driver of this behavior, with dealer balance-sheet constraints also playing a role in the funding of less-liquid security types. A simple model of dealer–client interaction rationalizes these findings. Instrumenting with changes in market conventions, we find that funding conditions had little effect on cash securities markets between 2011 and 2019, but the tightening of terms during the market stress of early 2020 likely impaired liquidity and reduced asset returns to some degree.

Introduction, 108. — I. The three approaches and the issues facing them, 109. — II. Similar objectives will require different policies, 114. — III. Contrast between development strategy and benefit-cost analysis, 117. — IV. Conclusion, 119.

Journal Article British Taxation: Imperial and Local Get access Joseph King Joseph King London Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 14, Issue 2, February 1900, Pages 277–284, https://doi.org/10.2307/1883772 Published: 01 February 1900

The way in which taxation affects corporate financial policy, and the level of investment through the structure of the cost of capital, is still a bone of contention. Various specifications of the cost of capital have been used in econometric models (for example, Jorgenson [3]) although in a recent theoretical paper Stiglitz [10] has claimed that, ignoring uncertainty, the cost of capital is simply the rate of interest.3 In this paper we shall analyse the effect of personal and corporate taxation on both the firm's choice of financial policy and its investment decision. We shall see that the latter is influenced by the former because the cost of capital depends upon the optimal financial policy. The results have implications for the specification of the neoclassical investment model which has come to play such an important part in the econometric study of investment behaviour, because the cost of capital is a good deal more complicated than most of this work allows for. Another problem which will be examined is how expectations of future changes in tax rates affect the firm's policy. In recent years governments have often announced tax changes in advance, and increasing attention is being paid to the use of announcements of future tax changes as a policy tool in its own right. These announcement effects can have a significant impact on investment behaviour. To make it easier to see the role of taxation we shall assume a world of perfect certainty. There are three justifications for this neglect of uncertainty. First, when tax changes are announced in advance, expectations that these changes will take place are held with a very high degree of certainty. Secondly, this assumption makes our results directly comparable with those of the neoclassical investment model. Finally, in a world of certainty we know that the firm will, if it is acting in the shareholders' interests, maximize the market value of the stock. But in a world of uncertainty which does not have a complete set of Arrow-Debreu markets it is not clear just what the firm should be trying to maximize. This is because shareholders have different subjective beliefs about what the best policy is, and there are no contingent commodity markets for them to hedge on. If one shareholder believes that the firm would make enormous profits by drilling for oil in the North Sea and nobody else believes that this would be successful, then for this shareholder the optimal policy is to drill even though the market value of the firm's stock would slump in the short run.4 Section 2 discusses a model of the valuation of the company and the way in which this is influenced by taxation. This brings out the interaction between the systems of personal and corporate taxation. In Section 3 we analyse the firm's optimal financial policy where it has a choice between financing investment by using retentions, borrowing, or

Journal Article Corporate Taxation and Dividend Behaviour: a further Comment Get access M. A. King M. A. King University of Cambridge and Harvard University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 39, Issue 2, April 1972, Pages 231–234, https://doi.org/10.2307/2296875 Published: 01 April 1972

Journal Article Corporate Taxation and Dividend Behaviour—A Comment Get access M. A. King M. A. King University of Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 38, Issue 3, July 1971, Pages 377–380, https://doi.org/10.2307/2296390 Published: 01 July 1971

With risk-averse arbitrageurs and an effective lower bound (ELB) on nominal rates, nonlinear interactions among short-rate expectations, bond supply, and term premia emerge in equilibrium. These interactions, which are absent from affine models, help explain the observed behavior of the yield curve near the ELB, including evidence about unconventional monetary policy. The impact of both short-rate expectations and bond supply are attenuated at the ELB. However, in simulations of the post-crisis experience in the U.S., shocks to investors’ duration-risk exposures have much smaller effects than shocks to the anticipated path of short rates. The latter shocks matter, in part, because of the reduction in interest-rate volatility associated with a longer expected stay at the ELB—a novel channel of unconventional policy.

I. Introductory. Method and purpose of this paper; Mitchell's figures subjected to more refined methods, 656. — II. Comparison of wholesale and retail prices, 658; lag of retail prices not clearly established, 659. — Producers' goods and consumers' goods; examination of annual, quarterly and monthly data, 660. — III. Raw materials, partly manufactured and finished goods move concurrently, 663. — Influence of raw materials eliminated, 664. — Dissimilar price fluctuations of producers' and consumers' goods, 665. — IV. Organic and inorganic goods; Sombart's theory tested, 666. — V. Wages in England and United States; closer relation between wages and wholesale prices in the former, 668. — VI. Summary and conclusions. Mitchell confirmed in part only, 671. — Annual figures not necessarily homogeneous; quarterly figures suggested, 673.

Journal Article Does Conservation Involve Cost? Get access Willford I. King Willford I. King University of Wisconsin Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 30, Issue 3, May 1916, Pages 595–600, https://doi.org/10.2307/1885242 Published: 01 May 1916