We study the effects of the reform of the system of severance payments (TFR) of Italian employees on the cost and the access to credit for small and medium-size enterprises (SMEs). The most direct consequence of the reform is to reduce in the long run the amount of liquid assets available to...

The degree to which stock markets can perform theirrole of allocating resources efficiently in the presence of moral hazard isinvestigated. First, an existing framework is extended in order to define stockmarket equilibrium in such a way that allows for a dispersed initial ownershipdistribution...

We analyze optimal hedging contracts and show that although hedging aims at sharing risk, it can lead to more risk-taking. News implying that a hedge is likely to be loss-making undermines the risk-prevention incentives of the protection seller. This incentive problem limits the capacity to...