Rosa Barbolla, Luis C. Corchón; An Elementary Proof of the Existence of a Competitive Equilibrium in a Special Case*, The Quarterly Journal of Economics, V

We derive and test a dynamic discrete-time model of asset returns. Both the risks of individual securities and equilibrium risk premia change predictably in the model, but these changes can be attributed to movements in the returns and prices of only two well-diversified portfolios. Any other components of returns should be unpredictable. Using the generalized method of moments, the model is estimated and tested on portfolios of equities. We find the data supportive of the model’s restrictions, even when instruments designed to capture the January effect are employed.

ABSTRACT We compare different indexation schemes in terms of their ability to facilitate forgiveness and reduce the investment disincentives associated with the large LDC debt overhang. Indexing to an endogenous variable (e.g., a country's output) has a negative moral hazard effect on investment. This problem does not arise when payments are linked to an exogenous variable such as commodity prices. Nonetheless, indexing payments to output may be useful when debtors know more about their willingness to invest than lenders. We also reach new conclusions about the desirability of default penalties under asymmetric information.

The literature on leadership suggests that the performance context of a succession event and the origin of a newly appointed leader moderate the relationship between the succession and its consequences for performance in large corporations.We tested that premise with data from 477 large corporations and a measure of excess stock market returns.The findings show that investors are most favorably predisposed to successions in which outsiders are appointed to financially healthy firms.