Financial Economics under Structural Uncertainty and Low Property Rights: An Agency-Theoretic Perspective

AUTOR(ES)
DATA DE PUBLICAÇÃO

2003

RESUMO

The dissertation investigates three themes related to agency problems in financial markets in developing and transitional economies. These economies are usually plagued with low investor protection and high degrees of structural uncertainty, and hence prone to agency problems. The first chapter develops a stylized model characterized by poor contractual enforcement. The main assumption is that firms idiosyncratic are non-verifiable. Among others, the main result is that demand deposit contracts offered by banks may be the right financial contract to circumvent the under-financing problem, because the threat of a run prevents banks to misuse depositors funds. The second chapter develops the theme relating collateral value and macroeconomic instability when property rights are costly to exercise. Under this assumption, collateral is implicitly destroyed, since security holders cannot have access to collaterals full value in case of default. The main conclusion is that when demand for insurance is high, a sufficient amount of securities cannot be issued, as the economy runs short on collateral to back them up. The last chapter focuses on reputation concerns as a way to control central banks. The environment is one of structural uncertainty, where the central bank and the public are not fully aware of values of some parameters governing the economy. Besides the usual reputations concern that may lead to central bank conservatism, the conclusion is that the potential information revealed by less conservative monetary policies re-enforces the pressure for conservatism today. This is because of central banks risk aversion, as more information in future will lead to more volatile policies, hurting the policy maker from an ex-ante perspective.

ASSUNTO(S)

proteção developing economies mercado financeiro economia controle control central banks investor protection investimentos política financeira macroeconomic instability economias em desenvolvimento financial markets banco central

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