This paper studies the design of unemployment insurance when neither the searching effort nor the savings of an unemployed agent can be monitored. If the principal could monitor the savings, the optimal policy would leave the agent savings-constrained. With a constant absolute risk-aversion (CARA) utility function, we obtain a closed form solution of the optimal contract. Under the optimal cont...

Social commerce is an emerging platform that entails different social features to attract the attention of online consumers. Borrowing insights from psychological contract theory, this study examines characteristics platforms, such as interactivity and rating reviews influence consumers’ purchase intentions. An survey 430 consumers was conducted on a popular site in China. Partial least squar...

This paper discusses two ways to amend the optimal lending contract under asymmetric information studied in Clementi and Hopenhayn (2006) to change its long-run implications so that firm growth and exit driven by borrowing constraints exist in the long run. One way assumes that the entrepreneur has a lower discount factor than the bank, and the other assumes the bank has limited commitment. The...

To what extent is public debt private liquidity? Much policy advice given in the aftermath of the financial crisis rests on the assumption that increasing public debt relaxes borrowing constraints of private households. This is the case for ad-hoc debt limits, which are exogenous to public policy. Instead, if debt limits are fully endogenous, as e.g. in the case of the natural borrowing limit, ...

A model of micro loans is used to determine the equilibrium borrowing rates, and default probabilities. Monitoring by lenders is critical for an equilibrium to exist in our model if the maturity of the loan is long. With short maturity loans, monitoring is shown to be counterproductive. The manner in which the loan rates depend on the market structure, monitoring costs, joint-liability provisio...

borrowing in different accents – similar to languages – is done because of the trade between that accent and other languages and accents and shows the dynamism of the accent. on the other hand it proves the relationship between different cultures in spite of their historical or geographical distance. by a deep research in syrian accent the borrowing from persian, turkish, french, italian and en...

The main purpose of this paper is to describe how different assumptions about temptation and self-control affect the optimal borrowing and saving contracts in a simple stochastic income setting. I find that the optimal savings plan when temptation is myopic consists of a mandatory minimum level of savings, while the optimal plan for farsighted temptation can have several fully restrictive manda...

This paper quantifies the importance of aggregate fluctuations in microeconomic uncertainty for firm dynamics over the business cycle in an economy with endogenously frictional financial markets. To begin, I provide evidence on asymmetric response across age and size groups of firms in the U.S. to the changes in aggregate economic conditions. I argue that age rather than size is a relevant marg...

A typical household has a home mortgage as its most significant financial contract. The form of this contract is correspondingly important. This paper studies the choice between a fixed-rate (FRM) and an adjustable-rate (ARM) mortgage. In an environment with uncertain inflation, a nominal FRM has risky real capital value whereas an ARM has a stable real capital value. However an ARM can increas...