An agent can invest in a high—yield bond and a low—yield bond, holding either long or short positions in either asset. Any movement of money between these two assets incurs a transaction cost proportional to the size of the transaction. The low—yield bond is liquid in the sense that wealth invested in this bond can be consumed directly without a transaction cost; wealth invested in the high—yie...

The aim of this paper is to examine the concentration of wealth among the group of top wealth holders, defined as those with wealth in excess of a high cut off. The paper begins by considering the definition of this cut off, analogous to the definition of a poverty line at the other end of the distribution. It then considers what can be learned about the proportion classified as ‘rich’ and abou...

We begin the development of a theory of Banach spaces in the definable setting of o-minimal structures. We outline several results which develop the theory of compact embeddings for explicitly given function spaces. One aim is to explain the substantive underpinnings of an important observation used in the proof of the Reparameterization Theorem of Pila and Wilkie in [2]. We place this observat...

the bias against mangrove areas in siting fish farms prompted a comparison of the cost structure and yield performance in upland and mangrove locations. tools utilized included descriptive statistics, budgetary and cash flow analyses and profitability ratios. empirical results revealed that substantial revenue could be realized from both farms. while the upland farms yielded average gross reven...

This paper analyzes the real consequences of making a firm’s executives more accountable for the fidelity of a firm’s financial reports using a basic model of investment under asymmetric information with reporting. Greater accountability generally leads to less underinvestment but more overinvestment. The level of accountability that maximizes investment efficiency is low enough to allow some m...

In this paper, I show that a sizable component of emerging market sovereign yield spreads is due to factors other than default risk such as liquidity. I estimate the non-default component of the yield spreads as the basis between the actual credit default swap (CDS) premium and the hypothetical CDS premium implied by emerging market bond yields. On average, the basis is large and positive for s...

BEA is studying proposals to change the treatment of insurance services in the national accounts. There are 5 proposed changes: investment income will be added as a supplement to the premiums paid by policyholders; investment income is to include interest, dividends and capital gains; a measure of expected investment income will be incorporated; a measure of expected claims will be incorporated...

Various alternatives are available when designing a data collection system for portfolio investment (PI) statistics, in the context of balance of payments (BOP) and international investment position (IIP). Such systems differ according to the reporting agents they target, periodicity and level of aggregation, while the corresponding results vary in terms of implementation and running costs, ava...

Our simulation considers producers in a competitive energy market. Risk averse producers face uncertainty about future carbon regulation. Investment decisions are a two-stage equilibrium problem. Initially, investment is made under regulatory uncertainty; then the regulatory state is revealed and producers realize returns. We consider taxes, grandfathered permits and auctioned permits and show ...

What is the best way to incorporate a risk premium into the discount rate schedule for a real investment project with uncertain payo¤s? The standard CAPM formula suggests a beta-weighted average of the return on a safe investment and the mean return on an economy-wide representative risky investment. Suppose, though, that the project constitutes a tail-hedged investment, meaning that it is expe...