We analyze monetary conditions in US asset markets — corporate equity, real estate, Treasury bond and corporate & foreign bond — from a market specific perspective, proposing the concept of market leverage. Market leverage measures the average leverage of all asset holders in a particular asset market. The concept builds on an accountingbased network that links balance sheet leverages of asset ...

This paper determines the equilibrium ownership structure in an emerging market deregulated by privatization and investment liberalization. It is shown that bidding competition in the privatization stage is necessary but not sufficient for reaching an efficient equilibrium market structure. Competition in the ensuing entry stage is also necessary. Otherwise, one firm can induce another to take ...

I offer a theory of joint ownership by extending the standard property right theory of the firm to situations where parties can endogenously choose the degree of specificity of their investments (i.e., both the type of investment—specific and general—and the level of each). When specific and general investments are complements, the standard GHM results are obtained and joint ownership is subopt...

In a property-rights framework, we study how the organizational form and quantity contracts interact in generating investment incentives. Our model nests standard property-rights and hold-up models as special cases. We admit general message-dependent contracts but provide conditions under which non-contingent contracts are optimal. This allows to fully characterize optimal contracts. First, we ...

Investors can choose to hold diversified or levered, concentrated portfolios of risky assets. This paper studies the dynamics of asset prices in an economy in which both investment styles coexist in equilibrium even though all agents are ex-ante identical. I capture the tradeoff between risk sharing and productivity gains by introducing what I call “active capital.” People who participate in su...

In a property-rights framework, I study how organizational form and quantity contracts interact in generating investment incentives. The model nests standard property-rights and holdup models as special cases. I admit general message-dependent contracts, but provide conditions under which non-contingent contracts are optimal. First, I contribute to the foundation of the property-rights theory: ...

We study the factors that induce asset managers to hold both equity and bond positions in the same company (“twin ownership”), as well as the corporate finance implications of such a joint ownmership for the firms they hold. We show that twin ownership is determined by a tradeoff between the benefits of information acquisition and greater monitoring/enforcing that an equity stake confers to a b...