reference dependent preferences and labor supply the case of new york city taxi drivers i develop a model of daily labor supply where preferences are dependent on a reference daily income level and i apply this model to data on the labor supply of new york city taxi drivers i find that there may be a reference level of income on a given day that affects labor supply however there is substantial day to day variation in a given driver s reference level and most shifts end before reaching the reference income level this pattern is inconsistent with an important role for reference dependent preferences

good ipos draw in bad inelastic banking capacity and hot markets we posit that screening ipos requires specialized labor which is in fixed supply a sudden increase in demand for ipo financing increases the compensation of ipo screening labor this results in reduced screening encouraging sub marginal firms to enter the ipo market further fueling the demand for screening labor the model s conclusions are consistent with empirical findings of increased underpricing during hot markets positive correlation between issue volume and underpricing and with tipping points between hot and cold markets finally the model makes sharp predictions relating the ipo market to fundamental values of firms and to investment banking returns

bad times good credit banks limited knowledge about borrowers creditworthiness constitutes an important friction in credit markets is this friction deeper in recessions thereby contributing to cyclical swings in credit or is the friction reduced as bad times reveal information about firm quality we test these alternative hypotheses using internal ratings data from a large swedish cross border bank and credit scores from a credit bureau the ability to classify corporate borrowers by credit quality is greater during bad times and worse during good times soft and hard information measures both display countercyclical patterns our results suggest that information frictions in corporate credit markets are intrinsically countercyclical and not due to cyclical variation in monitoring effort the presence of countercyclical information frictions provides a rationale for countercyclical provisions or capital in banks to smooth credit cycles

an empirical analysis of the daily labor supply of stadium venors this paper analyzes the daily labor supply behavior of food and beverage vendors at a single stadium over an entire baseball season this labor market is attractive for the study of labor supply both because ofvendors unilateraly decide whether to participate on each game date and because canges in product demand conditions across days are large and highly predictable generating exogenous game to game variation in the vendor wage i exploit the observable shift in product demand conditions across games to esumate the labor supply participation elasticity of stadium vendors estimates that recognize that demand conditions and vendor labor supply decisions simultancously determine the venofdor wage always find substantial labor supply elasticities typically in the 55 65 range in contract estimates that ignore the endoreneity of the ties these results highlight the imporatance of using demand shift markets

flight to quality in banking and economic activity abstract recent explanations of the transmission mechanism of monetary policy have emphasized that riskier lower net worth borrowers are more dependent on bank lending than larger less risky borrowers evidence from the federal reserve s survey on terms of bank lending indicates that the proportion of relatively high quality new loans safe moves countercyclically and granger causes gdp and inventory investment in the aftermath of a tightening of monetary policy the safe variable increases and in turn policy tends to relax once safe has risen

the international transmission of credit bubbles theory and policy we live in a new world economy characterized by nancial globalization and historically low interest rates this environment is conducive to countries experiencing credit bubbles that have large macroeconomic eects at home and are quickly propagated abroad in previous work we built on the theory of rational bubbles to develop a framework to think about the origins and domestic eects of these credit bubbles this paper extends that framework to include many countries and general preferences and uses it to study how nancial integration aects the properties of credit bubbles how the latter are transmitted across countries and the role of international policy coordination

managing credit bubbles we study a dynamic economy where credit is limited by insu cient collateral and as a result investment and output are too low in this environment changes in investor sentiment or market expectations can give rise to credit bubbles that is expansions in credit that are backed not by expectations of future pro ts i e fundamental collateral but instead by expectations of future credit i e bubbly collateral credit bubbles raise the availability of credit for entrepreneurs this

disruptive change in the taxi business the case of uber in most cities the taxi industry is highly regulated and utilizes technology developed in the 1940s ride sharing services such as uber and lyft which use modern internet based mobile technology to connect passengers and drivers have begun to compete with traditional taxis this paper examines the efficiency of ride sharing services vis a vis taxis by comparing the capacity utilization rate of uberx drivers with that of traditional taxi drivers in five cities the capacity utilization rate is measured by the fraction of time a driver has a fare paying passenger in the car while he or she is working and by the share of total miles that drivers log in which a passenger is in their car the main conclusion is that in most cities with data available uberx drivers spend a significantly higher fraction of their time and drive a substantially higher share of miles with a passenger in their car than do taxi drivers four factors likely contribute to the higher capacity utilization rate of uberx drivers 1 uber s more efficient driver passenger matching technology 2 the larger scale of uber than taxi companies 3 inefficient taxi regulations and 4 uber s flexible labor supply model and surge pricing more closely match supply with demand throughout the day

lending terms and aggregate productivity abstract several empirical studies suggest that lending terms are eased in expansions and tightened in recessions thereby influencing the mix of financed entrepreneurs we study a model of adverse selection in competitive financial markets and show that lending terms deteriorate with the aggregate state under two general conditions if exogenous increments to entrepreneurs productivity raise returns to investment and or tighten the credit line needed to screen out a given entrepreneur type competition results in contracts with less screening two endogenous effects on productivity emerge production scales grow closer to optimal but lower productivity entrepreneurs enter the mix of producers the positive negative effect dominates at low high aggregate states

competition and increasing returns to scale a model of bank size this study examines the causal effects of bank size on banks survival asset quality and leverage two forces drive these effects increasing returns to scale derived from banks expertise and competition the first enables bigger banks to survive competition better have higher asset quality and be more leveraged it drives banks into a race for expansion this race toughens competition between banks which edges out small banks and may worsen all banks asset quality consequently the banking industry will be dominated by a small number of highly leveraged banks in this study financial intermediation arises endogenously and co exists with direct finance

criteria for responsible business practice in smes an exploratory case of u k fair trade organisations this paper develops a set of 16 criteria divided into four groupings for responsible business practice rbp in small and medium sized enterprises smes drawn from the existing sme rbp literature the current lack of a general set of criteria against which such activity can be judged is noted and this deficit is redressed in order to make an initial assessment in support of the criteria so derived an exploratory feasibility study of rbp in u k fair trade organisations was conducted the findings from this study show that most but not all of the rbp criteria seem to be applicable to u k fair trade organisations but it is recommended that the complete set of criteria continues to be used in further research until such time as there is a general consensus as to which criteria are appropriate implications for rbp in small businesses in general and for fair trade organisations in particular are drawn out and suggestions for further research are identified

bank competition and credit standards this article offers an explanation for the substantial variation of credit standards and price competition among banks over the business cycle as the economic outlook improves the average default probabilities of borrowers decline this affects the profitability of screening and causes bank screening intensity to display an inverse u shape as a function of economic prospects low screening activity in expansions creates intense price competition among lenders and loans are extended to lower quality borrowers as the economic outlook worsens price competition diminishes and credit standards tighten significantly deposit insurance may contribute to the countercyclical variation of credit standards copyright 2004 oxford university press

covenants and collateral as incentives to monitor although monitoring borrowers is thought to be a major function of financial institutions the presence of other claimants reduces an institutional lender s incentives to do this thus loan contracts must be structured to enhance the lender s incentives to monitor covenants make a loan s effective maturity and the ability to collateralize makes a loan s effective priority contingent on monitoring by the lender thus both covenants and collateral can be motivated as contractual devices that increase a lender s incentive to monitor these results are consistent with a number of stylized facts about the use of covenants and collateral in institutional lending modern finance theory suggests that financial intermediaries such as commercial banks insurance companies and finance companies monitor and control their borrowers on behalf of other investors 1 this article investigates how the loans made by these institutions can be structured so as to best enhance the institutions role as delegated monitors covenants and collateral are common features of loans made by financial institutions but these features are somewhat difficult to justify consider loan covenants clauses in a loan contract that require the borrower to take or refrain from various actions berlin and mester 1992 magee and sridhar 1994 and park 1994 show that by giving institutions the right to renegotiate or call loans when covenants are violated covenants serve as tripwires that enhance the flexibility and efficiency of financial contracting also as documented in smith and warner 1979 control rights from covenants reduce borrower adverse selection or moral hazard nevertheless by allowing institutions to demand repayment based on any information contractible or not

capital requirements monetary policy and aggregate bank lending theory and empirical evidence capital requirements linked solely to credit risk are shown to increase equilibrium credit rationing and lower aggregate lending the model predicts that the bank s decision to lend will cause an abnormal runup in the borrower s stock price and that this reaction will be greater the more capital constrained the bank i provide empirical support for this prediction the model explains the recent inability of the federal reserve to stimulate bank lending by increasing the money supply i show that increasing the money supply can either raise or lower lending when capital requirements are linked only to credit risk the motivation of this article is first to examine the impact of risk based capital requirements namely those that link mandatory capital to asset ratios for banks to their loans on aggregate bank lending these requirements called the basle capital rules or bis guidelines went into effect in march 1989 for banks in the leading industrialized nations these rules initially required banks to maintain capital equal to 7 25 percent of business and most consumer loans with the requirement increasing to 8 percent by the end of 1992 secondly i wish to understand the link between monetary policy and aggregate bank credit in the presence of risk based capital requirements my curiosity is sparked in part by two recent phenomena one is the experience of the u s economy which displayed sluggish growth during 1989 93 despite a monetary policy that attempted to spur bank lending and economic activity and the other is the striking decline in loans relative to security holdings mostly government bonds in the asset portfolios of u s

demand fluctuations in the ready mix concrete industry i investigate the role of demand shocks in the ready mix concrete industry using census data on more than 15 000 plants i estimate a model of investment and entry in oligopolistic markets these estimates are used to simulate the effect of eliminating short term local demand changes a policy of smoothing the volatility of demand has a market expansion effect the model predicts a 39 increase in the number of plants in the industry since bigger markets have both more plants and larger plants a demand smoothing fiscal policy would increase the share of large plants by 20 finally the policy of smoothing demand reduces entry and exit by 25 but has no effect on the rate at which firms change their size

informational frictions and the credit crunch in this paper i estimate the magnitude of an informational friction limiting credit reallocation to firms during the 2007 to 2009 financial crisis because lenders rely on private information when deciding which relationship to end borrowers looking for a new lender are adversely selected i show how to separately identify private information from information common to all lenders but unobservable to the econometrician by using bank shocks within a discrete choice model of relationships quantitatively these informational frictions appear to be too small to explain the credit crunch in the u s syndicated corporate loan market

deconstructing the relationship between corporate social and financial performance for four decades research on the role and responsibilities of business in society has centered on the business case for corporate social responsibility csr and an increasing number of studies on the corporate social performance csp corporate financial performance cfp link emerged leading to controversial results heeding the call for a deeper understanding of the mechanisms linking certain csr efforts to certain performance outcomes this study provides a stakeholder based organizing framework rooted in an extensive review of existing literature on the link between csp and cfp in so doing we aim at guiding research and practice toward less simplistic understandings of the csp cfp connection thus advancing the debate over the consequences of voluntary integrating csr into business operations and into relationships with stakeholders by disentangling specific drivers and outcomes of the csp cfp link we underline the importance of setting clear boundaries and specifying levels of analysis to generate comparable results

debt contracts and financial intermediation with costly screening we develop a credit market model with adverse selection where risk neutral bor rowers self select because lenders make use of a costly screening technology equilibrium contracts are debt contracts and this is robust to randomization in contrast to results for the costly state verification model this framework permits optimal financial intermediary structures in that there is delegated screening in equilibrium if many borrowers are required to fund individual investment projects contrats de dette et internendiation financiere quand le tamisage est couteux les auteurs developpent un modele de marche du credit avec selection adverse otu les emprunteurs qui sont neutres par rapport au risque se selectionnent eux memes parce que les pr6teurs utilisent une technologie de tamisage qui est cohteuse les contrats d equilibre sont des contrats de dette et ces resultats s averent robustes meme quand on utilise des processus au hasard contrairement a ce qui se passe dans le cas du modele cooteux de verification par l etat ce cadre d analyse suggere des structures d intermediation financiere optimales en ce que en equilibre il y a delegation du tamisage si plusieurs emprunteurs sont necessaires pour

frictions in a competitive regulated market evidence from taxis this paper presents a dynamic equilibrium model of a taxi market the model is estimated using data from new york city yellow cabs two salient features by which most taxi markets deviate from the efficient market ideal are first matching frictions created by the need for both market sides to physically search for trading partners and second regulatory limitations to entry to assess the importance of these features we use the model to simulate the effect of changes in entry alternative matching technologies and different market density we use the geographical features of the matching process to back out unobserved demand through a matching simulation the matching function exhibits increasing returns to scale which is important to understand the impact of changes in this market and has welfare implications for instance although alternative dispatch platforms can be more efficient than street hailing platform competition is harmful because it reduces effective density

doing well while doing bad csr in controversial industry sectors in this article we examine the empirical association between firm value and csr engagement for firms in sinful industries such as tobacco gambling and alcohol as well as industries involved with emerging environmental social or ethical issues i e weapon oil cement and biotech we develop and test three hypotheses the window dressing hypothesis the value enhancement hypothesis and the value irrelevance hypothesis using an extensive us sample from 1995 to 2009 we find that csr engagement of firms in controversial industries positively affects firm value after controlling for various firm characteristics to address the potential endogeneity problem we further estimate a system of equations and change regression and continue to find a positive relation between csr engagement and firm value our findings support the value enhancement hypothesis and are consistent with the premise that the top management of us firms in controversial industries in general considers social responsibility important even though their products are harmful to human being society or environment

valuation adverse selection and market collapses we study a market for funding real investment where valuation meaning investors devoting resources to acquiring information about future payoffs creates an adverse selection problem unlike previous models more valuation is associated with lower market prices and so greater returns to valuation this strategic complementarity in the capacity to do valuation generates multiple equilibria with multiple equilibria the equilibrium without valuation is most efficient despite funding some unprofitable investments switches to valuation equilibria valuation runs look like credit crunches a large investor can ensure the efficient equilibrium only if it can precommit to a price and potentially only if subsidized

alternative information sources and the information content of bank loans this paper examines the information content of bank loan agreements we differentiate borrowers according to financial analysts percentage earnings forecast errors and most recent forecast revisions the empirical results suggest that banks rely on other indicators as initial screening devices to determine where to best deploy their evaluation and monitoring efforts if these other indicators are reliable and signalimproving prospects banks do little further investigation however if the indicators are noisy and signal declining prospects banks have incentives to expend resources to investigate the borrowers resulting in the production of valuable information recent theories of financial intermediation concentrate on the role of banks in reducing informational asymmetry leland and pyle 1977 suggest that informational asymmetries may be the primary reason that intermediaries exist campbell and kracaw 1980 demonstrate that an important function of financial intermediation is the production of information diamond 1984 develops a model which shows that financial intermediaries can exist simply because they provide an efficient means of evaluating and monitoring borrowers these information transmission theories argue that banks provide unique information production services in an imperfect capital market they suggest that banks know more about the prospects of the firms they lend to than do others thus bank loan agreements should convey useful information to the market a number of researchers empirically examine the uniqueness of bank loans fama 1985 approaches the issue by examining the rates on certificates of deposit and other high grade commercial papers he concludes that since bank borrowers bear the cost of reserve requirements there must be something special about bank loans james 1987 conducts an event study around the announcement of bank credit agreements and reports a significantly positive two day announcement return his results provide evidence support

anxious periods and bank lending we examine the lending behavior of banks during anxious periods the main characteristic of anxious periods is that the perceptions and expectations about economic conditions worsen for economic agents even though the economy is not in a recession we identify distinct periods of anxiety for consumers ceos firms and analysts subsequently we study the lending behavior of us banks during the anxious quarters from 1985 to 2010 using bank level data the results show that banks lending falls when consumers and analysts are anxious and this effect is more pronounced when banks hold a higher level of credit risk these effects are more pronounced in anxious periods that were followed by recessions and in these periods loan growth also responds negatively to the anxiety of ceos yet these effects are quite less prevalent in the period after 2001

got rejected real effects of not getting a loan using a lender cutoff rule that generates plausibly exogenous variation in credit supply i investigate a new channel through which funding shocks are transmitted to the real economy based on a sample of more than 15 000 loan applications from small and medium sized enterprises i find that precautionary savings motives can aggravate real effects low liquidity firms whose loan applications were rejected increase cash holdings and cut noncash assets in excess of the requested loan amount these results point to the amplifying effect of precautionary savings motives in the transmission of credit supply shocks received december 11 2016 editorial decision february 22 2018 by editor philip strahan

informed lending and security design we examine the role of security design when lenders make inefficient accept or reject decisions after screening projects lenders may be either too conservative in which case they reject positive npv projects or too aggressive in which case they accept negative npv projects in the first case the uniquely optimal security is debt in the second case it is levered equity in equilibrium profitable projects that are relatively likely to break even are financed with debt while less profitable projects are financed with equity highly profitable projects are financed by uninformed arm slength lenders professional lenders have specialized expertise in screening projects unlike the typical entrepreneur to whom they lend they have been exposed to a wide variety of projects in the past professional lenders have experienced loan officers and analysts who know precisely what information is relevant how to treat soft information such as management quality and how to weigh the various pieces of information in making a forecast of the project s cash flows and default risk this paper examines how securities should be optimally designed when lenders make inefficient accept or reject decisions after screening projects in our model screening generates an informative albeit private signal about the project s profitability high signals indicate a positive net present value npv and low signals indicate a negative npv where the project s npv is increasing

estimation of a model of entry in the airline industry this paper considers the effect of an airline s scale of operation at an airport on the profitability of routes flown out of that airport the empirical methodology uses the entry decisions of airlines as indicators of underlying profitability the results extend the empirical literature on airport presence by providing a new set of estimates of the determinants of city pair profitability these estimates imply that city pair profits increase in airport presence and decrease rapidly in the number of entering firms the literature on empirical models of oligopoly entry is also extended via a focus on the role of differences between firms

new york city cab drivers labor supply revisited reference dependent preferences with rational expectations targets for hours and income this paper reconsiders whether cabdrivers labor supply decisions reflect reference dependent preferences following botond koszegi and matthew rabin 2006 we construct a model with targets for hours as well as income both determined by rational expectations estimating using henry s farber s 2005 2008 data we show that the reference dependent model can reconcile his 2005 finding that drivers stopping probabilities are significantly related to hours but not income with the negative wage elasticity of hours found by colin camerer et al 1997 and farber 2005 2008 the model yields sensible estimates that avoid farber s 2008 criticism that drivers income targets are too unstable to allow a useful reference dependent model of labor supply

extreme screening policies abstract we show that a lender often experiences increasing marginal returns to screening in a standard setting where the lender decides how intensively to screen the projects of prospective borrowers the increasing marginal returns imply that even small changes in industry parameters can produce large changes in equilibrium screening intensity in particular a small reduction in the expected return from borrowers projects can produce a pronounced increase in the screening of prospective borrowers with substantial corresponding welfare effects

foreign bank lending evidence from the global financial crisis abstract we exploit highly disaggregated bank firm data to investigate the dynamics of foreign vs domestic credit supply in italy around the period of the lehman collapse which brought a sudden and unexpected deterioration of economic conditions and a sharp increase in credit risk taking advantage of the presence of multiple lending relationships to control for credit demand and risk at the individual firm level we show that foreign lenders restricted credit supply to the same firm more sharply than their domestic counterparts a number of exercises testing alternative explanations for this result suggest that such more intense restriction also reflects the functional distance between a foreign bank s headquarter and the italian credit market

credit booms and lending standards evidence from the subprime mortgage market this paper links the u s subprime mortgage crisis to demand side factors that contributed to the rapid expansion of the u s mortgage market we show that denial rates were relatively lower in areas that experienced faster credit demand growth and that lenders in these high growth areas attached less weight to applicants loan to income ratios the results are robust to controlling for supply side factors including house price appreciation mortgage securitization and other economic fundamentals and to several robustness tests controlling for endogeneity the results are consistent with the notion that a relaxation of lending standards triggered by an increased demand for loans contributed to the boom and the ensuing crisis together with other supply side explanations these findings shed new light on the relationship between credit booms and financial instability

deregulation and bank financial policy the standard view that banks can value maximize by exploiting non risk rated deposit insurance ignores the potential loss of a valuable bank charter due to insolvency recognition of this effect changes the bank s optimal financial policy and can induce extreme risk averting as well as risk taking behavior however as the value of the bank charter falls the risk taking strategy is more apt to dominate therefore current deregulation of the banking industry by easing entry and devaluing charters holds the potential for increases in the incidence of insolvency unless offsetting policies are instituted

the time and budget constraints of the firm this short paper surveys some recent research on the internal organization of firms with an emphasis on task allocation and synchronization it focuses on an organization facing no incentive problems but time constraints and costs of communication it highlights two motives for communication concern for delay and concern for throughput it also considers the interaction between the time and budget constraints of the firm and its implication for organization design

the impact of public ownership in the lending sector we examine the effects of increased government ownership of suppliers in the lending sector which induces increased concern with total welfare and reduced concern with profit such increased ownership of a lender can have unanticipated effects for instance it can increase lender profit furthermore borrower welfare often declines as government ownership increases in a lender with a relatively limited ability to discern the true quality of borrowers projects in addition there are settings in which increased government ownership of a lender has no impact on either lender profit or borrower welfare resume l impact de la propriete publique sur le secteur des prets les auteurs examinent les effets de la propriete gouvernementale croissante des offreurs dans le secteur des prets un phenomene qui se traduit en un plus grand interet pour le bien etre global et un interet moindre pour le profit un tel accroissement de la propriete publique peut avoir des effets non anticipes par exemple cela peut accroitre les profits des preteurs de plus le bien etre des emprunteurs decline souvent a proportion que la croissance de la propriete gouvernementale d un preteur connote une competence relativement limitee pour discerner la veritable qualite des projets des emprunteurs enfin il existe des circonstances dans lesquelles l accroissement de la propriete gouvernementale d une institution preteuse n a aucun impact soit sur le profit du preteur soit sur le bien etre de l emprunteur

time to build and fluctuations in bulk shipping abstract this paper explores the nature of fluctuations in world bulk shipping by quantifying the impact of time to build and demand uncertainty on investment and prices we examine the impact of both construction lags and their lengthening in periods of high investment activity by constructing a dynamic model of ship entry and exit a rich dataset of secondhand ship sales allows for a new estimation strategy resale prices provide direct information on value functions and allow their nonparametric estimation we find that moving from time varying to constant to no time to build reduces prices while significantly increasing both the level and volatility of investment jel g31 l11 l62 l92

new tools to foster corporate socially responsible behavior according to the green paper presented by the european commission in july 2001 corporate social responsibility csr is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis commission of the european communities 2001b p 6 on this basis in 2002 the italian government and especially the italian ministry of welfare launched an initiative called csr sc social commitment in order to foster the proactive social role of italian enterprises with great attention on sme involvement the technical partner of the italian ministry of welfare for this initiative is bocconi university the goal of this contribution is to present the main results of csr sc research project developed by bocconi university the paper provides a detailed picture of the general scheme designed to carry out the research project and a review of the different methodologies used to support the solutions proposed

improving the numerical performance of static and dynamic aggregate discrete choice random coefficients demand estimation the widely used estimator of berry levinsohn and pakes 1995 p roduces estimates of consumer preferences from a discrete choice demand model with random coefficients market level demand shocks and endogenous prices we derive numerical theory results characterizing the properties of the nested fixed point algorithm used to evaluate the objective function of blp s estimator we discuss problems with typical implementations including cases that can lead to incorrect parameter estimates as a solution we recast estimation as a mathematical program with equilibrium constraints which can be faster and which avoids the numerical issues associated with nested inner loops the advantages are even more pronounced for forward looking demand models where the bellman equation must also be solved repeatedly several monte carlo and real data experiments support our numerical concerns about the nested fixed point approach and the advantages of constrained optimization for static blp the constrained optimization approach can be as much as ten to forty times faster for large dimensional problems with many markets

accounting standards and debt covenants has the balance sheet approach led to a decline in the use of balance sheet covenants abstract recent years have seen a sharp decline in the use of balance sheet based covenants in private debt contracts i hypothesize that changes in accounting standards can explain part of this decline standard setting has shifted towards a balance sheet approach which i predict has made the balance sheet less useful for contracting i measure the effect of the balance sheet approach on specific borrowers using a volatility ratio i find that borrowers with greater volatility ratios are less likely to have balance sheet based covenants this evidence is consistent with reductions in the contracting usefulness of the balance sheet being associated with reductions in balance sheet covenants

labor supply of new york city cabdrivers one day at a time life cycle models of labor supply predict a positive relationship between hours supplied and transitory changes in wages because such changes have virtually no effect on life cycle wealth previous attempts to test this hypothesis empirically with time series data have not been supportive estimated elasticities are typically negative or nonsignificant such analyses however are vulnerable to measurement error and other estimation problems we use data on daily observations of wages and hours for new york city cab drivers to estimate the supply response to transitory fluctuations in wages cab drivers decide daily how many hours to supply and face wages that are positively correlated within days but largely uncorrelated between days using these data our central finding is that wage elasticities are persistently negative from 5 to 1 in three different samples even after correcting for measurement error using instrumental variables these negative wage elasticities challenge the notion that cab drivers trade off labor and leisure at different points in time and question the empirical adequacy of life cycle formulations of labor supply

securitization under asymmetric information over the business cycle l auteur etudie l efficience de la titrisation comme moyen d intermediation financiere a l aide d un modele ou sont formalises des projets d investissement heterogenes et l asymetrie de l information sur la qualite des actifs titrises il montre qu en conservant une partie du risque l emetteur des actifs titrises signale de maniere credible leur qualite

why bank credit policies fluctuate a theory and some evidence in a rational profit maximizing world banks should msdntain a credit policy of lending if and only if borrowers have positive net present value projects why then are changes in credit policy seemingly correlated with changes in the condition of those demanding credit this paper argues that rational bank managers with short horizons will set credit policies that influence and are influenced by other banks and demand side conditions this leads to a theory of low frequency business cycles driven by bank credit policies evidence from the banking crisis in new england in the early 1990s is consistent with the assumptions and predictions of the theory

credit booms and macrofinancial stability this paper explores several questions about credit booms and busts when do credit booms occur when do they end up in busts and when do they not what are the implications for different policies if curbing credit growth and or mitigating the associated risks is an objective we find that credit booms are often associated with financial reform and economic growth they also tend to be more frequent in fixed exchange rate regimes only one in three credit boom episodes are followed by a financial crisis these booms tend to be larger and last longer macroprudential tools have at times proven effective in containing booms and more often in limiting the consequences of busts due to the buffers they helped to build

information production dilution costs and optimal security design abstract we investigate the problem of a firm wishing to finance a project by issuing securities under asymmetric information we find that when outside investors can produce noisy information on the firm s quality the degree of information asymmetry resulting in equilibrium is endogenous and depends on the information sensitivity of the security issued thus in contrast to the prediction of the pecking order theory see e g myers and majluf j financial econom 13 1984 187 a security with low sensitivity to private information such as debt does not always dominate one with high information sensitivity such as equity a firm s preference for equity rather than debt depends on the costs of information production the precision of the information production technology and the extent of the information asymmetry we also study the optimal security design problem and find that depending on the cost and precision of the information production technology risky debt or a composite security with a convex payoff emerges as optimal securities

incomplete information high low bidding and public information in first price auctions high low bidding refers to auctions of a series of objects where for a subset of the auctioned objects one of two buyers bids high on some objects and low on others while the other buyer does the reverse this paper shows that high low bidding does not imply collusive behavior among buyers in particular through a formal modeling of a noncooperative game of information acquisition and bidding decisions it shows that high low bidding can be obtained the paper also demonstrates that if the cost of information to a seller is less than the equilibrium joint expected information cost of the buyers then it pays the seller to provide public information finally if the provision of public information is not feasible but a seller can know whether buyers have acquired information then it pays the seller to make known to the buyers and to pursue a policy that just prior to the start of an auction the seller will announce which buyer has acquired information