This paper provides an explanation for momentum and reversal in stock returns within a rational expectations framework in which investors are heterogeneous in their information and investment opportunities. We assume that informed agents privately receive advance information about company...

This paper develops a real options model to study the interaction between industry structure and takeover activity. In an asymmetric industry equilibrium, firms have an endogenous incentive to merge when restructuring decisions are motivated by operating and strategic benefits. The model...

Consumer debt and bankruptcy are central issues today because of their explosive trends over the last 20 years in the U.S. economy. However, there is no convincing explanation for these facts. A drop in information costs, a potential cause, has not been evaluated mainly because there is no...

We present a new automated, objective and intuitive scoring method to measure the content of central bank communication about future policy rate moves. We apply the methodology to statements released by the Federal Open Market Commitee (FOMC) after monetary policy meetings. Using high-frequency...

This paper develops a competitive equilibrium model of CEO compensation and industry dynamics. CEOs make product pricing and product improvement decisions subject to shareholders' compensation choices and idiosyncratic shocks to product quality. The choice of high-powered incentives optimally...

We explore the implications of current account adjustment for monetary policy within a simple two-country DSGE model. Our framework nests Obstfeld and Rogoff’s (2005) static model of exchange rate responsiveness to current account reversals. It extends this approach by endogenizing the dynamic...

estimate the sharing rule using 2000 Census data and implement a semi-parametric test of the over-identifying restrictions.

higher job satisfaction than the employed, even after controlling for income and hours worked. However, there is a large amount of heterogeneity in this effect: while “independent types” experience a large increase in job satisfaction from being self-employed, “hierarchical types” even...

In this paper we compare in a consistent way micro and macro labor supply elasticities. The individual elasticity is obtained from the Panel Study of Income Dynamics (PSID). The aggregate, time-series, elasticity is estimated from the exact aggregation of the individual units in the PSID, each...

rates that are consistent with U.S data.