American International Group, Inc. (AIG), a large insurance company, received a massive bailout during the financial crisis in response to difficulties centered on the company's multifaceted exposure to residential mortgage-backed securities. The company is back on its feet, albeit in more...

This paper surveys a broad range of studies and highlights the main findings of the empirical literature regarding business finance and productivity. Numerous studies analyse the productivity effects of financial development and frictions. The results suggest: 1) Financial development likely has...

This paper considers bankruptcy law design in a setting that is appropriate for entrepreneurial firms. These firms are characterized by a dependence on an owner-manager who is essential to the firm and must be given incentive through an ownership stake to maximize the value of the project. The...

If mortgage borrowers default strategically, their future house price expectations should affect their present mortgage default decisions. Merging the Freddie Mac loan performance dataset with the Michigan Survey of Consumers data containing households' subjective expectations, this paper...

This paper can be divided in two sections. First, based on the price model in “Noise trader risk in financial market” by J. Bradford Delong et al. (1987), we analyze the implications to Value at Risk and probability of default in option-theoretic model. We find that bubbles are ill-impounded...