The Relevance of Financial Policy
AbstractWhen the asset market is incomplete, equilibrium allocations are not invariant to changes in the financial policies of firms: in the presence of secondary assets, such as options, whose payoffs depend nonlinearly on the price of equity, the range of attainable reallocations of revenue varies as a firm alters its position in the asset market. Corporate financial policy is thus relevant. When assets are nominal, monetary policy implemented through open market operations is effective.
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Bibliographic InfoPaper provided by University of Bonn, Germany in its series Discussion Paper Serie A with number 262.
Date of creation: Aug 1989
Date of revision:
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Other versions of this item:
- Detemple, J. & Gottardi, P. & Polemarchakis, H., 1989. "The Relevance Of Financial Policy," Papers fb-89-11, Columbia - Graduate School of Business.
- Detemple, J. & Gottardi, P. & Polemarchakis, H.M., . "The relevance of financial policy," CORE Discussion Papers RP -1157, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Detemple, J. & Gottardi, P. & Polemarchakis, H., 1990. "The relevance of financial policy," CORE Discussion Papers 1990011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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