How should firms decide whether and when to invest in new capital equipment, additions to their workforce, or the development of new products? Why have traditional economic models of investment failed to explain the behavior of investment spending in the United States and other countries? In...

The descriptive and empirical literature in Industrial Organization abounds with reference to economies of scale, product differentiation, and absolute advantages in cost or demand enjoyed by some firms over others. In particular, they feature prominently in Bain's list of barriers to entry in....

Includes bibliographical references (p. 15).

Includes bibliographical references (p. 27-28).

The Making of Economic Policy begins by observing that most countries' trade policies are so blatantly contrary to all the prescriptions of the economist that there is no way to understand this discrepancy except by delving into the politics. The same is true for many other dimensions of...

We develop a formula for the market value of debt when the borrower’s repayment capacity varies stochastically, and shortfalls are rolled over. The value of a marginal dollar of nominal claim is an S-shaped function of the ratio of the repayment capacity to the amount of nominal debt. Shifts...