Keywords:
Stock (firearms)
Recent literature on the design of optimal monetary policy has shown that deviations from price stability are small whenever prices are sticky. This paper reconsiders this issue by introducing capital accumulation in the model. Optimal monetary policy in this setup implies small deviations from price stability. The monetary authority optimally uses inflation as an explicit tax on monopolistic profits to reduce the price markup across states. Variable markup is achieved in this setup because the share of investment demand over output varies across states and in response to TFP shocks.
Monopolistic competition
Capital (architecture)
Investment
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Capital (architecture)
Terms of trade
Value (mathematics)
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Although we may not be conscious of it, politics has a significant influence on our lives; almost everything we do is affected by political decisions. But what do we mean when we talk about politics or the political system or government?
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he Fourth General Elections held in February 1967 constitute a watershed in the post-independence political history of India. The monolithic Congress regime and its haloed leadership had concealed both the many operational weaknesses and the basic inner strength and resilience of the Indian system. While strongly reaffirming the people's deep involvement in the democratic process, the electoral verdict shattered the Congress Party's virtual monopoly of political power. It also exposed the artificiality of the political stability, democratic maturity and parliamentary sophistication at which the system had appeared to be operating. Results of the fresh elections held in five of the seventeen States in February 1969 only carried the process a stage further. The most important developments in the post-1967 political and parliamentary scene in India were the formation of coalition governments of widely heterogeneous elements in several States and the numerous defections on the floor of the State legislatures which affected the fate of ministries and the course of politics. This phenomenon, the politics of defection as it is commonly called now, has several psychological and socionomic dimensions and is closely related to the dynamics of human relations and leadership processes. In the present paper, an endeavor has been made to study it objectively, as a psycho-sociological reality, in terms of simple political legitimacy and constitutional legality and in the context of some of the more identifiable legal, political and psychological variables in order to understand its motivations, implications and consequences and more particularly its impact on the problems, processes and prospects of parliamentary democracy in India. Of the sixteen States of the Union that went to the polls in 1967 (there were no elections in Nagaland) the Congress Party did not gain an absolute majority in eight and failed to form the government in seven. Even in those States in which the Congress retained control, its strength was much depleted and in several cases defection by a few members changed the Party's legislative majority into a minority. In seven of the eight States where Congress failed to win an absolute majority, however, no single party took its
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We use a novel identification approach to test whether stock acquirers are overvalued prior to merger announcements or whether they have high growth opportunities (Q-theory). We argue that the overvaluation of firms drives both high short selling activity and a higher likelihood of stock mergers. We document that, as early as 12 months before a merger announcement, short selling activity is higher (lower) for firms that eventually make stock (cash) acquisitions. High short interest predicts long-term negative returns following the announcement. Finally, stock (but not cash) acquirers have higher short interest than their targets. We investigate alternative explanations for our results that do not assume short sellers only target overvalued firms and show that these explanations do not appear to explain our results. We conclude that overvalued firms self-select to become stock acquirers and that short selling activity does not completely eliminate acquirer overvaluation.
Stock (firearms)
Short interest ratio
Mergers and Acquisitions
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