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Two Essays in Finance.

Record Type:	Language materials, manuscript : Monograph/item
Title/Author:	Two Essays in Finance./
Author:	Pokorny, John Alexander.
Description:	1 online resource (80 pages)
Notes:	Source: Dissertation Abstracts International, Volume: 79-04(E), Section: A.
Contained By:	Dissertation Abstracts International79-04A(E).
Subject:	Finance. -
Online resource:	click for full text (PQDT)
ISBN:	9780355319477

Two Essays in Finance.
Pokorny, John Alexander.

Two Essays in Finance. - 1 online resource (80 pages)

Source: Dissertation Abstracts International, Volume: 79-04(E), Section: A.

Thesis (Ph.D.)

Includes bibliographical references

In Chapter 1, I show that two nominal frictions, nominal debt and price stickiness, combine to create a channel for inflation to affect the real investment and leverage decisions of firms in the cross-section. With nominal debt, a positive inflation shock lowers the real value of current debt, increasing the marginal cost of adjusting debt, and thereby reduces the optimal amount of future debt. Inflation thus reduces the degree of debt overhang, increasing investment. Price stickiness leads to differences in real profitability following inflation shocks that drive cross-sectional differences in investment and leverage. In the US data, firms increase investment and reduce debt in response to positive inflation shocks, while in the cross section sticky-price firms have lower profitability and investment and higher debt than flexible firms after positive inflation shocks.

Electronic reproduction.
Ann Arbor, Mich. :
ProQuest,
2018

Mode of access: World Wide Web

ISBN: 9780355319477Subjects--Topical Terms:

559073
Finance.
Index Terms--Genre/Form:

554714
Electronic books.

Two Essays in Finance.
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100 1 $a Pokorny, John Alexander. $3 1180853
245 1 0 $a Two Essays in Finance.
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300 $a 1 online resource (80 pages)
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500 $a Source: Dissertation Abstracts International, Volume: 79-04(E), Section: A.
500 $a Adviser: Frederico Belo.
502 $a Thesis (Ph.D.) $c University of Minnesota $d 2017.
504 $a Includes bibliographical references
520 $a In Chapter 1, I show that two nominal frictions, nominal debt and price stickiness, combine to create a channel for inflation to affect the real investment and leverage decisions of firms in the cross-section. With nominal debt, a positive inflation shock lowers the real value of current debt, increasing the marginal cost of adjusting debt, and thereby reduces the optimal amount of future debt. Inflation thus reduces the degree of debt overhang, increasing investment. Price stickiness leads to differences in real profitability following inflation shocks that drive cross-sectional differences in investment and leverage. In the US data, firms increase investment and reduce debt in response to positive inflation shocks, while in the cross section sticky-price firms have lower profitability and investment and higher debt than flexible firms after positive inflation shocks.
520 $a In Chapter 2, coauthored with John Boyd and Abu Jalal, we look at the effects of inflation on nominal contracting in a costly state verification framework. The nominal repayment on a private debt contract does not obey the Fisher equation and is lower than the Fisher nominal rate. We also find that higher levels of expected inflation reduce welfare by increasing the expected costs of monitoring. We document the first result empirically by looking at a panel of interest rates across countries, finding that inflation enters non-linearly. This is not true of government debt, where the Fisher equation appears to hold.
533 $a Electronic reproduction. $b Ann Arbor, Mich. : $c ProQuest, $d 2018
538 $a Mode of access: World Wide Web
650 4 $a Finance. $3 559073
655 7 $a Electronic books. $2 local $3 554714
690 $a 0508
710 2 $a ProQuest Information and Learning Co. $3 1178819
710 2 $a University of Minnesota. $b Business Administration. $3 1179082
773 0 $t Dissertation Abstracts International $g 79-04A(E).
856 4 0 $u http://pqdd.sinica.edu.tw/twdaoapp/servlet/advanced?query=10603079 $z click for full text (PQDT)