Search results
Results from the WOW.Com Content Network
In RBC models, business cycles are described as "real" because they reflect optimal adjustments by economic agents rather than failures of markets to clear. As a result, RBC theory suggests that governments should concentrate on long-term structural change rather than intervention through discretionary fiscal or monetary policy.
At the same time, the resultant line items must talk to the business' operations: in general, growth in revenue will require corresponding increases in working capital, fixed assets and associated financing; and in the long term, profitability (and other financial ratios) should tend to the industry average, as mentioned above; see Financial ...
In financial economics, the dividend discount model (DDM) is a method of valuing the price of a company's capital stock or business value based on the assertion that intrinsic value is determined by the sum of future cash flows from dividend payments to shareholders, discounted back to their present value.
examines a model of climate change that is similar to the one used in the Stern Review but with a 3 percent social discount rate that slowly declines to 1 percent in 300 years rather than the 0.1 percent discount rate used in the Stern Review. In his model, the welfare of future generations is given less weight than the current generation's ...
In the long run, if demand remains the same and the more productive methods are adopted across the entire economy, the amount of labour required (as a ratio to capital, i.e. the organic composition of capital) would decrease. Now, assuming value is tied to the amount of labor necessary, the value of the physical output would decrease relative ...
The First Chicago method or venture capital method is a business valuation approach used by venture capital and private equity investors that combines elements of both a multiples-based valuation and a discounted cash flow (DCF) valuation approach.
When applied to capital income taxation, the Atkinson–Stiglitz theorem argues that since present and future consumption are equally complementary to leisure due to weakly separable preferences (and hence there is no Corlett–Hague motive for capital income taxation), capital income taxes do not alleviate the tax distortions caused by labor ...
Economic capital is a function of market risk, credit risk, and operational risk, and is often calculated by VaR. This use of capital based on risk improves the capital allocation across different functional areas of banks, insurance companies, or any business in which capital is placed at risk for an expected return above the risk-free rate.