We examine the implications of a North-South trade accord where investments in the Southern partner nation exhibit country risk. Our analysis demonstrates that treatment of foreign investment, inducing additional foreign capital inflows. Moreover, the impact of the accord on Southern credibility...

The amount of information in the yield curve for forecasting future changes in short rates varies with the maturity of the rates involved. Indeed, spreads between certain long and short rates appear unrelated to future changes in the short rate--contrary to the rational expectations hypothesis...

Private placement debt issues are more effective than public bonds in resolving information asymmetries and controlling moral hazard problems. Firms that issue only private placements (non-switchers) are found to have more information problems than firms that have access to the public bond...

This paper investigates the comovements of stocks and bonds at the individual firm level. Based on a sample of 702 corporate bonds, individual stock returns and bond yield changes are found to be negatively correlated, suggesting that the comovements of individual stocks and bonds are largely...

This paper describes an empirical framework for analyzing the monetary transmission mechanism through which changes in monetary policy affect real GDP and inflation. The framework reflects the work of a large number of empirical researchers who have built econometric models of the impacts of...

We examine the implications of a North-South trade accord where investments in the Southern partner nation exhibit country risk. Our analysis demonstrates that North-South trade accords can serve as "credibility-enhancing" mechanisms towards treatment of foreign investment, inducing additional...

This paper studies a class of models developed by Townsend (1993) and Sargent (1991). These models feature dynamic signal extraction problems in which firms with heterogeneous information draw inferences from endogenously generated time series about the value of common persistent shock. Because...