Default and Renegotiation: A Dynamic Model of Debt
We analyse the role of debt in persuading an entrepreneur to pay out cash flows, rather than to divert them. In the first part of the paper we study...
The Governance of Exchanges: Members' Co-operatives Versus Outside Ownership
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Credit Cycles
This paper is a theoretical study into how credit constraints interact with aggregate economic activity over the business cycle. We construct a model...
Debt and Seniority: An Analysis of the Role of Hard Claims in Constraining Management
We develop a theory of long term debt based on the idea that debt and equity differ in their priority status relative to future corporate cash...
A Proposal for Bankruptcy Reform in the UK
There is a widespread belief that UK bankruptcy procedures are not working well, in spite of the 1986 reforms. A recent Coopers and Lybrand report...
A Theory of Debt Based on the Inalienability of Human Capital
Consider an entrepreneur who needs to raise funds from an investor, but cannot commit not to withdraw his human capital from the project. The...
A Theory of Corporate Financial Structure Based on the Seniority of Claims
We develop a theory of optimal capital structure based on the idea that debt equity differ in their priority status relative to future corporate cash...
Default and Renegotiation: A Dynamic Model of Debt
This paper considers a situation where an entrepreneur borrows funds from a creditor (e.g. a bank) to finance an investment project. The project will...
