Working Papers

"Debt, Taxes and Liquidity" with Hui Chen and Neng Wang (2014)

"Investment, Liquidity, and Financing under Uncertainty," with Neng Wang and Jinqiang Yang (2013)

"The Good Banker" (2013)

"The Dynamics of Optimal Risk Sharing," with Christopher Harris (2013), NBER Working Paper Series, No: 16094

"Cream Skimming in Financial Markets” with Tano Santos and Jose Scheinkman (2012).

"Should Derivatives be Privileged in Bankruptcy?" with Martin Oehmke

Executive Compensation and Risk Taking”, with Hamid Mehran, and Joel Shapiro (2010)

Intracompany Governance and Innovation”, with Sharon Belenzon, and Tomer Berkovitz, (2009). NBER Working Paper No. w15304

Recent Publications

"Corporate Finance, Incomplete Contracts, and Corporate Control" (2013) Journal of Law, Economics, and Organization (forthcoming)

"Leadership, Coordination and Corporate Culture," with Laura Veldkamp and Markus Brunnermeier, Review of Economic Studies, (2013)

"Market Timing, Investment, and Risk Management" with Hui Chen and Neng Wang, Journal of Financial Economics, Volume 109, Issue 1: 40-62 (2011).

"Strategic conduct in credit derivative markets" with Martin Oehmke (2013), International Journal of Industrial Organization (forthcoming)

"Covenant lite lending, liquidity, and standardization of financial contracts", with Kenneth Ayotte, in Research Handbook on the Economics of Property Law, Kenneth Ayotte and Henry E. Smith (eds.), Edward Elgar, Cheltenham, UK, (2011)

Sovereign Default Risk in Financially Integrated Economies”, with Olivier Jeanne, IMF Economic Review Volume 59, Issue 2: 162-194 (2011)

Why Bank Governance is Different”, with Marco Becht and Ailsa Roell, Oxford Review of Economic Policy, Volume 27, Number 3, pp. 437–463 (2011)

Capital Access Bonds: Contingent Capital with an Option to Convert”, with Frederic Samama, Economic Policy, pp. 275–317, April (2012)

Leadership, Coordination and Corporate Culture”, with Laura Veldkamp and Markus Brunnermeier, Review of Economic Studies, (2012) forthcoming.

Authority in Organizations: A Survey”, with Mathias Dewatripont in the Handbook of Organizational Economics (Robert Gibbons and John Roberts, eds.), Princeton University Press, forthcoming 2011

The Credit Ratings Game”, with Xavier Freixas and Joel Shapiro, Journal of Finance, forthcoming (2011)

Optimal Property Rights in Financial Contracting”, with Kenneth Ayotte, Review of Financial Studies, forthcoming (2011)

A Unified Theory of Tobin's q, Corporate Investment, Financing, and Risk Management”, with Hui Chen and Neng Wang, Journal of Finance, forthcoming (2011)

“Credit Default Swaps and the Empty Creditor Problem”, with Martin Oehmke, Review of Financial Studies, forthcoming (2011)

Outside and Inside Liquidity”, with Tano Santos, and José Scheinkman, Quarterly Journal of Economics, forthcoming (2011)

Economists’ Perspectives on Leadership”, with Laura Veldkamp and Markus Brunnermeier, in Handbook of Leadership and Theory, Nitin Nohria and Rakesh Khurana (eds.), Harvard Business Press, 2010

Satisficing Contracts”, with Antoine Faure-Grimaud, Review of Economic Studies, July 2010

How to rethink sovereign bankruptcy: a new role for IMF?”, with David A. Skeel, Jr. in Overcoming Developing Country Debt Crises, Barry Herman, Jose Antonio Ocampo and Shari Spiegel (eds.), Oxford University Press, 2010

Market and Public Liquidity”, with Tano Santos and Jose Scheinkman, American Economic Review, May 2009

"Thinking Ahead: The Decision Problem," with Antoine Faure-Grimaud, Review of Economic Studies, 2009

"Structuring and Restructuring Sovereign Debt: The Role of Seniority," with Olivier Jeanne, Review of Economic Studies, 2009

"Redesigning the International Lender of Last Resort," with David A. Skeel, Chicago Journal of International Law, Summer 2005

"Corporate Finance and Monetary Transmission Mechanism," with Xavier Freixas, The Review of Financial Studies, 2006, 19, 829-870

"Executive Compensation and Short-termist Behavior in Speculative Markets," with Jose Scheinkman and Wei Xiong, The Review of Economic Studies, 2006, 73, 577-611

"An introduction to the governance and taxation of not-for-profit organizations," with Hamid Mehran, Journal of Accounting Economics, 2006, 41,293-305

"Pay for Short-term Performance: Executive Compensation in Speculative Markets," with Jose Scheinkman and Wei Xiong, The Journal of Corporation Law, 2005, 30(4), 721-748

"Corporate Law and Governance," with Marco Becht and Ailsa Roell, in the Handbook of Law and Economics, edited by A.M. Polinsky and S. Shavell, November 2007

"Conflicts of Interest, Information Provision and Competition in Financial Service Industry," with Joel Shapiro and Xavier Freixas, Journal of Financial Economcis, 2007, 85(2), 297-330

"Odious debts or odious regimes?" with David Skeel, in Law and Contemporary Problems, forthcoming 2007

"Structuring and Restructuring Sovereign Debt: The Role of a Bankruptcy Regime," with Olivier Jeanne, Journal of Political Economy, forthcoming 2008

Books

  Sovereign Wealth Funds and Long-Term Investing, with Frederic Samama and Joseph E. Stiglitz (eds), Columbia University Press, 2011
     
  The Economics of Contracts, (editor), Edward Elgar Publishing Inc., 2008
     

Contract Theory, with Mathias Dewatripont, MIT Press, 2005

     
  Credit Markets for the Poor, with Howard Rosenthal (eds), Russell Sage Foundation, 2005


Industrial Organization and Antritrust (PDF)

Contracts as a Barrier to Entry (joint with Philippe Aghion), The American Economic Review, Vol. 77, No. 3. (Jun. 1987), pp. 388-401. 

Vertical Restraints in a Model of Vertical Differentiation, (joint with Giacomo Bonanno), The Quarterly Journal of Economics, Vol. 103, No. 3. (Aug. 1988), pp. 555-570. 

A Theory of Predation Based on Agency Problems in Financial Contracting (joint with David S. Scharfstein), The American Economic Review, Vol. 80, No. 1. (Mar. 1990), pp. 93-106. 

The Foreclosure Effects of Vertical Mergers (joint with Michael D. Whinston), Journal of Institutional and Theoretical Economics, Vol. 147, pp. 207-226, 1991. 

Incomplete Contracts, Vertical Integration, and Supply Assurance (joint with Michael Whinston), The Review of Economic Studies, Vol. 60, No. 1. (Jan. 1993), pp. 121-148. 

The Firm as a Communication Network (joint with Mathias Dewatripont), Quarterly Journal of Economics Vol. CIX, No. 4. (December 1994), 809-839.

The Time and Budget Constraints of the Firm (joint with Mathias Dewatripont), European Economic Review, Vol. 39, pp. 691-699, 1995. 

Predatory Pricing:  Strategic Theory and Legal Policy (joint with Joseph F. Brodley and Michael H. Riordan) 1999. 

Predatory Pricing: Response to Critique and Further Elaboration (joint with Joseph F. Brodley, and Michael H. Riordan), The Georgetown Law Journal, Vol. 89, No. 8, pp. 2496-2528, August 2001. 

Conflicts of Interest, Information Provision and Competition in Banking (joint with Joel Shapiro and Xavier Freixas), NBER Working Paper No. W10571 (June 2004).

Ownership and Managerial Competition: Employee, Customer, or Outside Ownership (joint with Chenggang Xu) mimeo March 1999. 

Corporate Finance

The Financial Structure of the Firm and the Problem of Control (joint with Philippe Aghion) European Economic Review, Vol. 33, pp. 286-293, 1989. 

A Theory of Predation Based on Agency Problems in Financial Contracting (joint with David S. Scharfstein), The American Economic Review, Vol. 80, No. 1. (Mar. 1990), pp. 93-106. 

An Incomplete Contracts Approach to Financial Contracting (joint with Philippe Aghion), The Review of Economic Studies, Vol. 59, No. 3. (Jul. 1992), pp. 473-494. 

Debt-Renegotiation (joint with D. Scharfstein) New Palgrave Dictionary in Money and Finance, 1992.

Optimal Debt Structure with Multiple Creditors (joint with D. Scharfstein), Journal of Political Economy, Vol. 104, pp. 1-26, 1996.

Corporate Finance, The Theory of the Firm, and Organization (joint with D. Scharfstein), Journal of Economic Perspectives, (Winter 1998).

Optimal Design of Bank Bailouts: The Case of Transition Economies (joint with Philippe Aghion and Steven Fries), Journal of Institutional and Theoretical Economics, Vol. 155, pp. 51-70, 1999. 

Equity Bonds and Bank Debt: Capital Structure and Financial Market Equilibrium Under Asymmetric Information (with Xavier Freixas), Journal of Political Economy, (April 2000).

Contagious Bank Failures in a Free Banking System (joint with Philippe Aghion and Mathias Dewatripont) 2000.

Incentive Effects of Conditional Bank Recapitalisation: Lending and Disclosure of Non-Performing Loans (with Philippe Aghion and Steven Fries) in Hiroshi Osano and Toshiaki Tachibanaki (eds.) Banking, Capital Markets and Corporate Governance, Palgrave, Oxford, (November 2001).

On the Design of Bank Bailout POlicy in Transition Economies (joint with Philippe Aghion and Steven Fries) in Anna Meyendorff and Anjan V. Thakor (eds.) Designing Financial Systems in Transition Economies: Strategies for Reform in Central and Eastern Europe, MIT Press, (2002).

Banking in Emerging Markets, Journal of Financial Intermediation, Vol. 11, pp. 362-65, 2002.

Exit Options in Corporate Finance: Liquidity versus Incentives (joint with Philippe Aghion and Jean Tirole) September 2000.

Liquidity and Financial Instability: An Introduction (joint with Franklin Allen), Journal of the European Economic Association, forthcoming Vol. 2, No. 6, 2004.

Corporate Finance and The Monetary Transmission Mechanism (joint with Xavier Freixas), mimeo (2004).

Corporate Governance

Blocks, Liquidity, and Corporate Control (with Ernst-Ludwig von Thadden), Journal of Finance, (February 1998).

Liquidity and Control: A Dynamic Theory of Corporate Ownership Structure (joint with Ernst-Ludwig von Thadden), Journal of Institutional and Theoretical Economics, Vol. 154, pp. 177-211, 1998.

Corporate Governance and Control (joint with Marco Becht and Ailsa Roell) the Handbook of the Economics of Finance, edited by George Constantinides, Milton Harris and Rene Stulz, North-Holland, 2003.

Corporate Governance and Control  ECGI - Finance Working Paper No. 02/2002. 

Executive Compensation and Short-termist Behavior in Speculative Markets (joint with Jose Scheinkman and Wei Xiong), March 26, 2003. 

Pay for Short-Term Performance: Executive Compensation in Speculative Markets (joint with Jose Scheinkman and Wei Xiong) mimeo Princeton University (2004).

Conflicts of Interest, Information Provision and Competition in Banking (joint with Joel Shapiro and Xavier Freixas), NBER Working Paper No. W10571 (June 2004).

Political Economy

Government Domestic Debt and the Risk of Default: A Political-Economics Model of the Strategic Role of Debt (joint with Philippe Aghion) 1990. 

Economic Theories of the Break-up and Integration of Nations (joint with Gerard Roland and Enrico Spolaore), European Economic Review, (May 1996).

The Break Up of Nations: A Political Economy Analysis (joint with Gerard Roland) Quarterly Journal of Economics, (November 1997).

Distributional Conflicts, Factor Mobility and Poltical Integration (joint with Gerard Roland), American Economic Review, Papers and Proceedings, (May 1996).

The Political Economy of Debt Moratoria, Bailouts and Bankruptcy (joint with Howard Rosenthal) in: Defusing Default: Incentives and Institutions, edited by Marco Pagano, Chapter 3, pp. 77-115, 2001. 

Political Interventionin Debt Contracts (joint Howard Rosenthal), Journal of Political Economy, Vol. 110, pp. 1103-34, (October 2002).

Incomplete Social Contracts (with Philippe Aghion), Journal of the European Economic Association, Vol. 1, pp. 38-67, 2003.

Sovereign Debt

Towards a Statutory Approach to Sovereign Debt Restructuring: Lessons from Corporate Bankruptcy Practice Around the World, November 23, 2002. 

Inside the Black Box: How Should A Sovereign Bankruptcy Framework be Structured? (joint with David A. Skeel), Emory Law Journal, Vol. 53, pp. 763-822, 2004.

Structuring and Restructuring Sovereign Debt: The Role of Seniority (joint with Olivier Jeanne), NBER Working Paper No. 11071, 2005.

Redesigning the International Lender of Last Resort (joint with David A. Skeel), 2005.

Economic Theory

Decentralization, Duplication, and Delay (joint with Joseph Farrell), The Journal of Political Economy, Vol. 98, No. 4. (Aug. 1990), pp. 803-826. 

Optimal Learning by Experimentation (joint with Philippe Aghion, Christopher Harris, Bruno Jullien), The Review of Economic Studies, Vol. 58, No. 4. (Jun. 1991), pp. 621-654. 

Strategic Experimentation (joint with Christopher Harris), Econometrica, (March 1999).

Strategic Experimentation: The Undiscounted Case (joint with Christopher Harris) in: Incentives Organization, and Public Economics, Papers in Honour of Sir James Mirrlees, edited by Peter J. Hammond and Gareth D. Myles, Chapter 4, pp. 53-68, 2000. 

Strategic Experimentation: a Revision (joint with Christopher Harris), Center Discussion Paper, University of Tilburg, (March 1996).

Thinking Ahead: The Decision Problem (joint with Antoine Faure-Grimaud), JEL Classifications D81, D84, C61, June 2005.

Economics of Transition and Development

Distribution and Growth in Models of Imperfect Capital Markets (joint with Philippe Aghion) European Economic Review, Papers and Proceedings of the 6th Annual Congress of the European Economic Association, Vol. 36 No. 2/3, pp. 603-611, (April 1992).

Privatization in Central and Eastern Europe (joint with G. Roland), Economic Policy, Vol. 15, pp. 275-303, (October 1992).

Privatization, and the Separation of Ownership and Control: Lessons from Chinese Enterprise Reform, Economics of Transition, Vol. 3 No.1, pp. 1-12, 1995.

A Theory of Trickle-Down Growth and Development (joint with Philippe Aghion), Review of Economic Studies, Vol. 64, pp. 151-172, (April 1997).

Optimal Design of Bank Bailouts: The Case of Transition Economies (joint with Philippe Aghion and Steven Fries), Journal of Institutional and Theoretical Economics, Vol. 155, pp. 51-70, 1999.

The Great Divide and Beyond: Financial Architecture in Transition (joint with Erik Berglof), Journal of Economic Perspectives, Vol. 16, No. 1, (Winter 2002).

Banking in Emerging Markets, Journal of Financial Intermediation, Vol. 11, pp. 362-65, 2002.

The Economics of Mass Privatization: Czechoslovakia, East Germany, Hungary and Poland (joint with Gerard Roland), Financial Markets Group discussion paper 155, London School of Economics, (November 1992).

Contract Theory

The Employment Relation and the Theory of the Firm: Arm's Length Contracting versus Authority (joint with Ashvin Rajan), mimeo, 2001.

The Principle of Maximum Deterrence Revisited, mimeo, U.C. Berkeley, 1987.

Ownership and Managerial Competition: Employee, Customer, or Outside Ownership (joint with Chenggang Xu) mimeo March 1999. 

Renegotiation and the Dynamics of Contract Design, European Economic Review, (May 1990).