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 Columbia - Graduate School of Business in its series Papers with number fb-89-11.
Length: 20 pages
Date of creation: 1989
Date of revision:
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Postal: U.S.A.; COLUMBIA UNIVERSITY, GRADUATE SCHOOL OF BUSINESS, PAINE WEBBER , New York, NY 10027 U.S.A
Phone: (212) 854-5553
Web page: http://www.columbia.edu/cu/business/
More information through EDIRC
financial policy ; market ; enterprises ; prices ; monetary policy;
Other versions of this item:
- J. Detemple & P. Gottardi & H. M. Polemarchakis, 1989. "The Relevance of Financial Policy," Discussion Paper Serie A 262, University of Bonn, Germany.
- 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).
- 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).
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stiglitz, Joseph E, 1974.
"On the Irrelevance of Corporate Financial Policy,"
American Economic Review,
American Economic Association, vol. 64(6), pages 851-66, December.
- Gottardi, P., 1990.
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158, Cambridge - Risk, Information & Quantity Signals.
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- Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
- Eckwert, Bernhard, 1993. "Allocative effects of financial assets and the long run neutrality of money when markets are incomplete," European Economic Review, Elsevier, vol. 37(1), pages 75-95, January.
- DREZE, Jacques H. & POLEMARCHAKIS, Heracles M., 1998. "Intertemporal general equilibrium and monetary theory," CORE Discussion Papers 1998053, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Chongmin Kim, 2004. "Corporate financial policy with pension accounts: an extension of the Modigliani-Miller theorem," International Economic Journal, Taylor & Francis Journals, vol. 18(2), pages 215-236.
- repec:ner:carlos:info:hdl:10016/2908 is not listed on IDEAS
- POLEMARCHAKIS, Heracles M. & ROCHON, Céline, 1999. "Debt, liquidity and dynamics," CORE Discussion Papers 1999034, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Polemarchakis, H. M. & Seccia, G., 2000. "A Role for Monetary Policy when Prices Reveal Information: An Example," Journal of Economic Theory, Elsevier, vol. 95(1), pages 107-115, November.
- Dahai Yu, 1998. "Two equivalence theorems for government finance," International Finance Discussion Papers 622, Board of Governors of the Federal Reserve System (U.S.).
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