Peter M Demarzo
Dados Biográficos
| ID | 1457056 |
|---|---|
| NOME | Peter M Demarzo |
| PRENOMES | Peter M |
| SOBRENOME | Demarzo |
| ASSINATURA | DEMARZO P M |
| AFILIAÇÕES | National Bureau of Economic Research |
| VERIFICADO | Não |
| TOTAL DE OBRAS | 7 |
| TOTAL DE CITAÇÕES | 111 |
| TOTAL COMO AUTOR | 7 |
| TOTAL COMO EDITOR | 0 |
| PRIMEIRO ANO DE PUBLICAÇÃO | 1992 |
| ANO MAIS RECENTE DE PUBLICAÇÃO | 2023 |
| ÍNDICE H | 3 |
Sovereign Debt Ratchets and Welfare Destruction
We study an impatient, risk-neutral government that cannot commit to a particular debt path, financed by competitive lenders. In equilibrium, debt adjusts slowly toward a debt-to-income target, exacerbating booms and busts. Strikingly, gains from trade dissipate when trading is continuous, leaving the government no better off than in financial autarky, owing to a sovereign “debt ratchet effect.” Moreover, citizens who are more patient than their …
Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation
We examine the pervasive view that "equity is expensive," which leads to claims that high capital requirements are costly and would affect credit markets adversely.We find that arguments made to support this view are either fallacious, irrelevant, or very weak.For example, the return on equity contains a risk premium that must go down if banks have more equity.It is thus incorrect to assume that the required return on equity remains fixed as capi…
Ownership Dynamics and Asset Pricing with a Large Shareholder
We analyze the optimal trading and ownership policy of a large shareholder who must trade off diversification and monitoring incentives. Without commitment, the problem is similar to durable goods monopoly: the share price today depends on expected future trades. We show that the large shareholder ultimately trades to the competitive price-taking allocation, even though it entails inefficient monitoring. With continuous trading, the large shareho…
Persuasion Bias, Social Influence, and Unidimensional Opinions
We propose a boundedly-rational model of opinion formation in which individuals are subject to persuasion bias; that is, they fail to account for possible repetition in the information they receive. We show that persuasion bias implies the phenomenon of social influence, whereby one's influence on group opinions depends not only on accuracy, but also on how well-connected one is in the social network that determines communication. Persuasion bias…
Persuasion Bias, Social Influence, and Uni-Dimensional Opinions
The Optimal Enforcement of Insider Trading Regulations
Regulating insider trading lessens the adverse selection problem facing market makers, enabling them to quote better prices. An Optimal enforcement policy must balance these benefits against the costs of enforcement. Such a policy must specify (i) the conditions under which the regulator conducts an investigation, (ii) the penalty schedule imposed if an insider is caught, and (iii) a transaction tax to fund enforcement. We derive the policy that …
Sequential Banking
The authors study environments in which agents may borrow sequentially from more than one leader. Although debt is prioritized, additional lending imposes an externality on prior debt because, with moral hazard, the probability of repayment of prior loans decreases. Equilibrium interest rates are higher than they would be if borrowers could commit to borrow from at most one bank. Even though the loan terms are less favorable than they would be un…
Persuasion Bias, Social Influence, and Unidimensional Opinions
We propose a boundedly-rational model of opinion formation in which individuals are subject to persuasion bias; that is, they fail to account for possible repetition in the information they receive. We show that persuasion bias implies the phenomenon of social influence, whereby one's influence on group opinions depends not only on accuracy, but also on how well-connected one is in the social network that determines communication. Persuasion bias…
Sequential Banking
The authors study environments in which agents may borrow sequentially from more than one leader. Although debt is prioritized, additional lending imposes an externality on prior debt because, with moral hazard, the probability of repayment of prior loans decreases. Equilibrium interest rates are higher than they would be if borrowers could commit to borrow from at most one bank. Even though the loan terms are less favorable than they would be un…
Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation
We examine the pervasive view that "equity is expensive," which leads to claims that high capital requirements are costly and would affect credit markets adversely.We find that arguments made to support this view are either fallacious, irrelevant, or very weak.For example, the return on equity contains a risk premium that must go down if banks have more equity.It is thus incorrect to assume that the required return on equity remains fixed as capi…
Sovereign Debt Ratchets and Welfare Destruction
We study an impatient, risk-neutral government that cannot commit to a particular debt path, financed by competitive lenders. In equilibrium, debt adjusts slowly toward a debt-to-income target, exacerbating booms and busts. Strikingly, gains from trade dissipate when trading is continuous, leaving the government no better off than in financial autarky, owing to a sovereign “debt ratchet effect.” Moreover, citizens who are more patient than their …
Sequential Banking
The authors study environments in which agents may borrow sequentially from more than one leader. Although debt is prioritized, additional lending imposes an externality on prior debt because, with moral hazard, the probability of repayment of prior loans decreases. Equilibrium interest rates are higher than they would be if borrowers could commit to borrow from at most one bank. Even though the loan terms are less favorable than they would be un…
The Optimal Enforcement of Insider Trading Regulations
Regulating insider trading lessens the adverse selection problem facing market makers, enabling them to quote better prices. An Optimal enforcement policy must balance these benefits against the costs of enforcement. Such a policy must specify (i) the conditions under which the regulator conducts an investigation, (ii) the penalty schedule imposed if an insider is caught, and (iii) a transaction tax to fund enforcement. We derive the policy that …
Persuasion Bias, Social Influence, and Uni-Dimensional Opinions
Persuasion Bias, Social Influence, and Unidimensional Opinions
We propose a boundedly-rational model of opinion formation in which individuals are subject to persuasion bias; that is, they fail to account for possible repetition in the information they receive. We show that persuasion bias implies the phenomenon of social influence, whereby one's influence on group opinions depends not only on accuracy, but also on how well-connected one is in the social network that determines communication. Persuasion bias…
Ownership Dynamics and Asset Pricing with a Large Shareholder
We analyze the optimal trading and ownership policy of a large shareholder who must trade off diversification and monitoring incentives. Without commitment, the problem is similar to durable goods monopoly: the share price today depends on expected future trades. We show that the large shareholder ultimately trades to the competitive price-taking allocation, even though it entails inefficient monitoring. With continuous trading, the large shareho…
Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation
We examine the pervasive view that "equity is expensive," which leads to claims that high capital requirements are costly and would affect credit markets adversely.We find that arguments made to support this view are either fallacious, irrelevant, or very weak.For example, the return on equity contains a risk premium that must go down if banks have more equity.It is thus incorrect to assume that the required return on equity remains fixed as capi…
Sovereign Debt Ratchets and Welfare Destruction
We study an impatient, risk-neutral government that cannot commit to a particular debt path, financed by competitive lenders. In equilibrium, debt adjusts slowly toward a debt-to-income target, exacerbating booms and busts. Strikingly, gains from trade dissipate when trading is continuous, leaving the government no better off than in financial autarky, owing to a sovereign “debt ratchet effect.” Moreover, citizens who are more patient than their …
Economics (5 obras) · Computer Science (4 obras) · Finance (4 obras) · Finance (4 obras) · Banking stability, regulation, efficiency (3 obras) · Business (3 obras) · Monetary economics (3 obras) · Political science (3 obras) · Politics (3 obras) · Cognitive psychology (2 obras)