infonet-economy

We present a flexible and scalable method to compute global solutions of high-dimensional non-smooth dynamic models. Within a time-iteration setup, we interpolate policy functions using an adaptive sparse grid algorithm with piecewise multi-linear (hierarchical) basis functions. As the dimensionality increases, sparse grids grow considerably slower than standard tensor product grids...

Based on a large international survey we analyze how German- French- and Italian-speaking Swiss differ in their investment decision behavior and competence as compared to their closest neighbors abroad speaking the same language. Although language may be closer to the individual self than the country of residence, we find that there are greater similarities in the decision...

The depth of the recent financial crisis is often attributed to excessively high leverage of corporations and banks. This column analyses corporate leverage in the long-run, and in particular the shift from bilateral to multilateral firm-bank relationships in the UK. This shift is related to the firms’ use of debt finance, and subsequently to their increased leverage

The majority of academic economists share the view that a corporation should serve the exclusive interests of its shareholders (shareholder value maximization). This view is fi rmly grounded on the extension, by Arrow (1953) and Debreu (1959) of the two welfare theorems to production economies with uncertainty and complete markets. This paper considers a variant of the Arrow-Debreu...

This dissertation includes three research papers, two of which are empirical studies and one of which illustrates a mechanism through a theoretical model. The first paper focuses on the effect of stock market liquidity on corporate cash holdings. This paper provides empirical evidence that stock market liquidity has a positive impact on cash holdings. The two main competing...