Using a recursive empirical model of the real interest rate, GDP growth and the primary government deficit in the United States, I solve for the ergodic distribution of the debt/GDP ratio. If such a distribution exists, the government is satisfying its intertemporal budget constraint. One key finding is that historical fiscal policy would bring the current high-debt ratio back to its normal lev...

Agency theory posits that debt-like compensation (such as defined-benefit pensions and other deferred compensation) aligns managerial interests more closely with those of debtholders and reduces the agency cost of debt. Consistent with theory, we find that a higher CEO relative leverage, defined as the ratio of the CEO's inside leverage (debt-toequity compensation) to corporate leverage, is ass...

Using a micro-founded model and a likelihood based inference method, we address three questions in this paper. First, what monetary and scal policy regimes characterized post-war U.S. data? Second, was equilibrium indeterminacy a feature of the economy before Paul Volcker's chairmanship at the Federal Reserve? Third, what were the effects of shifts in monetary and scal policy on the aggregate e...

In the coal industry world with intense competition, it causes competition to develop and involves importance of organization's monetary exhibition. Concentrating on performance is vital in terms solvency, liquidity solvency ratios. This study expects decide impact CR, DER DAR, ROA mining companies. It hoped that will provide knowledge about DER, DAR ROA. research form quantitative descriptive ...

1.1 Overview of the US mortgage market Owner-occupied housing and the mortgages used to finance it are currently the single largest asset and liability on the household balance sheet. As shown in Graph 1, residential mortgage debt has grown so that households now owe just over $8 trillion. Consumer credit, which includes personal loans, auto loans and credit card balances, now stands at just ov...

We investigate the effects of manager characteristics on capital structure. We first develop a dynamic structural model that incorporates managerial discretion in effort and financing, as well as agency conflicts between managers and outside investors. We derive the manager’s dynamic contract and implement it through financial securities. This leads to a dynamic capital structure for the firm c...

The objective of the contribution is to propose a new methodology for determining optimal credit absorption capacity an enterprise while maintaining positive function financial leverage, i.e., maximum possible loan that would continuously bring benefit enterprise. proposed determines according EVA Equity and Entity. Based on theoretical analysis both indicators, possibility applying this purpos...

The paper examines the interrelationship between fiscal and monetary policy in a two-country monetary union. The worst scenario occurs when an independent central bank (CB) sets the nominal interest rate and responds to rising government debt/GDP ratios by monetisation. The result is high inflation, high debt/GDP ratios and a large public sector. Government debt and inflation are contained if t...

We examine the relation between a borrowing firm’s ownership structure and its choice of debt source using a novel, hand-collected data set on corporate ownership, control and debt structures for 9,831 firms in 20 countries from 2001 to 2010. We find that the divergence between control rights and cash-flow rights of a borrowing firm’s largest ultimate owner has a significant impact on the firm’...