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Asset Pricing Implications of Macroeconomic Interventions An Application to Climate Policy

Mehra, Rajnish - National Bureau of Economic Research (NBER) - 2013

This paper illustrates that evaluating alternate abatement polices that affect the growth path of an economy on the basis of their effects on asset valuation may not be welfare enhancing. We show that the class of abatement polices considered in the integrated assessment literature are robust...

Persistent link: https://www.econbiz.de/10010821892

CAPM for Estimating the Cost of Equity Capital: Interpreting the Empirical Evidence

Jagannathan, Ravi; Da, Zhi; Guo, Re-Jin - National Bureau of Economic Research (NBER) - 2009

We argue that the empirical evidence against the Capital Asset Pricing Model (CAPM) based on stock returns does not invalidate its use for estimating the cost of capital for projects in making capital budgeting decisions. Since stocks are backed not only by projects in place, but also the...

Persistent link: https://www.econbiz.de/10005718639

A Model of R&D Valuation and the Design of Research Incentives

Hsu, Jason C.; Schwartz, Eduardo S. - National Bureau of Economic Research (NBER) - 2003

We develop a real options model of R&D valuation, which takes into account the uncertainty in the quality of the research output, the time and cost to completion, and the market demand for the R&D output. The model is then applied to study the problem of pharmaceutical under-investment in R&D...

Persistent link: https://www.econbiz.de/10005085206

R&D Investments with Competitive Interactions

Miltersen, Kristian R.; Schwartz, Eduardo S. - National Bureau of Economic Research (NBER) - 2004

In this article we develop a model to analyze patent-protected R&D investment projects when there is (imperfect) competition in the development and marketing of the resulting product. The competitive interactions that occur substantially complicate the solution of the problem since the decision...

Persistent link: https://www.econbiz.de/10005774460

Pharmaceutical Stock Price Reactions to Price Constraint Threats and Firm-Level R&D Spending

Golec, Joseph; Hegde, Shantaram; Vernon, John A. - National Bureau of Economic Research (NBER) - 2005

Political pressure in the United States is again building to constrain pharmaceutical prices either directly or through legalized reimportation of lower-priced pharmaceuticals from foreign countries. This study uses the Clinton Administration's Health Security Act (HSA) of 1993 as a natural...

Persistent link: https://www.econbiz.de/10005778358

Conflict, Evolution, Hegemony, and the Power of the State

Levine, David; Modica, Salvatore - National Bureau of Economic Research (NBER) - 2013

In a model of evolution driven by conflict between societies more powerful states have an advantage. When the influence of outsiders is small we show that this results in a tendency to hegemony. In a simple example in which institutions differ in their "exclusiveness" we find that these...

Persistent link: https://www.econbiz.de/10010950707

Growth and Intellectual Property

Levine, David; Boldrin, Michele - National Bureau of Economic Research (NBER) - 2006

Intellectual property (IP) protection involves a trade-off between the undesirability of monopoly and the desirable encouragement of creation and innovation. Optimal policy depends on the quantitative strength of these two forces. We give a quantitative assessment of current IP policies. We...

Persistent link: https://www.econbiz.de/10005829844

Repugnance as a Constraint on Markets

Roth, Alvin - National Bureau of Economic Research (NBER) - 2006

This essay examines how repugnance sometimes constrains what transactions and markets we see. When my colleagues and I have helped design markets and allocation procedures, we have often found that distaste for certain kinds of transactions is a real constraint, every bit as real as the...

Persistent link: https://www.econbiz.de/10005049997

Production Chains

Levine, David - National Bureau of Economic Research (NBER) - 2010

More advanced technologies demand higher degrees of specialization - and longer chains of production connecting raw inputs to final outputs. Longer production chains are subject to a "weakest link" effect: they are more fragile and more prone to failure. Optimal chain length is determined by the...

Persistent link: https://www.econbiz.de/10008756468

Economics and Reality

Uhlig, Harald - National Bureau of Economic Research (NBER) - 2010

economics and reality. More precisely, it asks how reality in the form empirical evidence does or does not influence economic … from general to specific. For the general perspective, I examine the following four points of view. First, economics is a … science. Second, economics is an art. Third, economics is a competition. Forth, economics politics. I then examine four …

Persistent link: https://www.econbiz.de/10008674229