In this paper we are concerned with the performance of stock option contracts in the provision of managerial incentives. In our simple framework, we restrict the space of contracts available to the principal to those conformed by a fixed payment and a package of call options on the firm's stock....

In this paper we present a recursive method for the numerical simulation of nonoptimal dynamic equilibrium models. This method builds upon a convergent operator over an expanded set of state variables. The fixed point of this operator defines the set of all Markovian equilibria. We study...

This paper is concerned with growth patterns of US health care expenditures. Within a representative sample of OECD countries, we lay out a growth accounting exercise for health care expenditures to assess the influence of several explanatory variables. Our analysis demonstrates that the...

In this paper we consider a sequential trading economy with incomplete financial markets and a finite number of infinitely lived agents. We propose a specification of agents' budget sets and show that such specification features several desirable properties. We then establish the existence of an...

In this paper we are concerned with the performance of stock option contracts in the provision of managerial incentives. In our simple framework, we restrict the space of contracts available to the principal to those conformed by a fixed payment and a call option on the firm’s stock. As...

equilibria in models with heterogeneous agents and market frictions. This method is based upon a convergent operator over an expanded set of state variables. The fixed point of this operator defines the set of all Markovian equilibria. We study approximation properties of the operator as well as...

Price markups are highly correlated with stock market values, whereas other financial measures of profitability exhibit much less variability and are weakly correlated with stock values. We propose a variant of the neoclassical growth model to study the role of innovation, price markups, and...

En este trabajo realizamos un estudio empírico de los efectos macroeconómicos de la integración europea en las incorporaciones que han tenido lugar entre 1970 y 2000. Para ello investigamos los efectos de la integración sobre distintas variables de la economía real. Nuestros resultados...