This paper examines an economy in which agents with private information about their own productive capabilities seek to raise capital to fund their investment projects. We employ an equilibrium concept which is closely related to Coalition Proof Nash Equilibrium. In equilibrium, all agents who...

The existence of a relationship between real growth and inflation has been investigated by economists for more than 200 years. In the decades after World War II, much of the profession came to view this relationship, represented by the Phillips curve, as describing a menu of choices for...

There is now a large literature documenting the statistical relation between stock prices and dividends at the aggregate level. A robust finding is that stock prices are too volatile to be explained by subsequent changes in dividends. Observations of large market swings, like the crash of...