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This paper studies the effects of overreaction to recent news for macroeconomic outcomes in the context of a quantitative model of sovereign debt and default. Overreaction is formalized in terms of …
Discussion paper
We establish new efficiency results for decentralized markets with quality uncertainty. Buyers encounter a succession of passing trade opportunities and related asset information, allowing them to …
Discussion paper
We conduct a welfare analysis of R&D subsidies and tax credits using a model of innovation policy incorporating externalities, limited R&D participation and financial market imperfections. We …
Discussion paper