A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.
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Results 314 resources
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The authors investigate the structure of preferences and uncertainty that guarantees that prices are fully revealing even though asset markets are incomplete and there are more sources of uncertainty than assets in the economy. A sufficient condition for fully revealing prices is that investors have preferences of the (possibly state-dependent) linear-risk-tolerance class. Finally, the authors discuss how their result allows one to extend certain existing literature on demand aggregation, welfare analysis, and the pricing of contingent claims to the case in which markets are incomplete and investors have asymmetric private information. Copyright 1995 by American Economic Association.
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A countertrade contract ties an export to an import. Usually, countertrade is criticized as a form of bilateralism and reciprocity and, thus, as an inefficient form of international exchange. In this paper, the authors argue that there are circumstances in which the tying of two technologically unrelated trade flows may be efficiency-enhancing. They show that countertrade can be an efficient institution in international trade that solves moral-hazard problems and restores creditworthiness of highly indebted countries. The authors test the implications of their model using a sample of 230 countertrade contracts. Copyright 1995 by American Economic Association.
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The authors examine the impact of changes in equity-option margin requirements on the liquidity of options and underlying stock markets. They find that the decrease in margin was associated with an increase in spreads and trade informativeness, and a decrease in depth for the underlying stocks. In contrast, option spreads decreased indicating a change in the relative allocation of informed traders between the two markets. When the required margin was increased, no significant change was observed in the underlying stocks but option spreads increased. Overall, the authors' results indicate that uninformed traders are more sensitive to the margin dimension of trading costs.
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Recently, U.S. environmental law has shown a tendency toward increased lender liability. A model of a potentially judgment-proof owner of a firm, a lender, and a potential victim is developed in which this policy can increase accident frequency and reduce efficiency. Full, partial, and zero lender-liability rules and a minimum equity requirement are analyzed. Partial lender liability and an equivalent minimum equity requirement deliver the highest level of efficiency, although the former can deliver a higher contribution by the lender to the victim than the latter. Policy and empirical implications are also discussed. Copyright 1995 by American Economic Association.
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The authors investigate the determinants of capital structure choice by analyzing the financing decisions of public firms in the major industrialized countries. At an aggregate level, firm leverage is fairly similar across the G-7 countries. The authors find that factors identified by previous studies as correlated in the cross-section with firm leverage in the United States are similarly correlated in other countries as well. However, a deeper examination of the U.S. and foreign evidence suggests that the theoretical underpinnings of the observed correlations are still largely unresolved.
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This paper presents empirical evidence against the standard dichotomy in macroeconomics that separates growth from the volatility of economic fluctuations. In a sample of ninety-two countries as well as a sample of OECD countries, the authors find that countries with higher volatility have lower growth. The addition of standard control variables strengthens the negative relationship. The authors also find that government spending-induced volatility is negatively associated with growth even after controlling for both time- and country-fixed effects. Copyright 1995 by American Economic Association.
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The Heckscher-Ohlin-Vanek (HOV) theorem, which predicts that countries will export products that are made from factors in great supply, performs poorly. However, deviations from HOV follow pronounced patterns. Trade is missing relative to its HOV prediction. Also, rich countries appear scarce in most factors and poor countries appear abundant in all factors, a fact that squares poorly with the HOV prediction that abundant factors are exported. As suggested by the patterns, HOV is rejected empirically in favor of a modification that allows for home bias in consumption and international technology differences. Copyright 1995 by American Economic Association.
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