Managers use derivatives to reduce cash flow volatility and achieve earnings smoothing. In 1998, FASB issued SFAS No. 133, under which firms are no longer allowed to simultaneously record all offsetting gains and losses on the items being hedged. Thus, critics argued that this treatment could...

The authors estimate a structural model of optimal life-cycle housing and consumption in the presence of realistic labor income and house price uncertainties. The model postulates constant elasticity of substitution between housing service and nonhousing consumption, and explicitly incorporates...