This paper analyzes the relationship between capital structure and earning management. For analyzing we use 119 non-financial companies that listed in Tehran Stock Exchange from 2000 to 2008. The researchers will focus on comparing the Jones Model and the Modified Jones Model, which are the two most frequently used model in empirical analysis nowadays. Earnings management is a kind of managemen...

In this paper, we analyze whether the total debt ratios and bank loan ratios of Chinese listed companies had any impact on their fixed investment in 2001-2006, and whether this impact, if it existed, differed among companies with differing investment opportunities. Our results are as follows. First, our analysis reveals that the total debt ratio (bank loan ratio) did have a negative impact on f...

Consider the problem of a government that wants to control its debt-to-GDP (gross domestic product) ratio, while taking into consideration the evolution of the inflation rate of the country. The uncontrolled inflation rate follows an Ornstein-Uhlenbeck dynamics and affects the growth rate of the debt ratio. The level of the latter can be reduced by the government through fiscal interventions. T...

What is the association between debt and anxiety? Is the relationship between age and anxiety in part due to financial debt? Recently there has been a renewed interest for the reconceptualization and measurement of socioeconomic status that moves beyond the standard education, occupation, and income. This paper uses credit card debt and stress regarding debt to examine the relationship among ag...

We analyze the determinants of government debt under the twin assumptions that governments have limited horizons and default only when government income falls short of debt service requirements. We derive a government’s maximum sustainable debt ratio, that is, the debt ratio chosen by a myopic government whose horizon does not extend beyond its current term in office. Maximum sustainable debt v...

I document that government debt is related to risk premia in various asset markets: (i) the debt-to-GDP ratio positively predicts excess stock returns with out-of-sample R2 up to 30% at a five-year horizon, outperforming many popular predictors; (ii) the debt-to-GDP ratio is positively correlated with credit risk premia in both corporate bond excess returns and yield spreads; (iii) higher debt-...

Our general pattern of deficits and debt has much in common with that of many other Organization for Economic Cooperation and Development (OECD) countries, including the United States—that is, a very high ratio of debt to GDP coming out of the Second World War, followed by a rapid decline of the debt ratio as the military was demobilized, as economic growth took off, and as the effective intere...

Evidence has been mounting (over the centuries) that the interest based debt financing regime is under ever increasing distress. All of the earlier crises whatever label they carried− exchange rate crisis or banking crisis – have been debt crises in essence. At the present, empirical research suggests that the debt-to-GDP ratio of the richest members of the G-20 threatens to touch 120% m...

In this paper we analyze how the primary surplus to GDP ratio in the US reacts to variations in the public debt-GDP ratio. In contrast to earlier studies we perform non-parametric and semi-parametric estimations. Our results show that the response of the primary surplus to GDP ratio is a positive nonlinear function of the debt-GDP ratio. Further, our estimations demonstrate that the coefficient...