Showing papers by "James Tybout published in 1988"
TL;DR: In this paper, a dynamic model of corporate balance sheet structures and net worth growth is fit to firm-level panel data from Uruguay and the results imply that rapid changes in the exchange rate have large effects on corporate sector leverage and liquidity.
Abstract: A dynamic model of corporate balance sheet structures and net worth growth is fit to firm-level panel data from Uruguay. Basic findings are: (1) net income is very sensitive to financial costs and demand for output; (2) there is a direct proportionality between net income and net worth expansion; (3) firms absorb most short-run fluctuations in net worth via adjustments in assets, not debts; and (4) the interest elasticity of corporate demand for peso debt is very small. Inter alia, these results imply that rapid changes in the exchange rate have large effects on corporate sector leverage and liquidity. Copyright 1988 by MIT Press.
5 citations
TL;DR: The authors developed algebraic representations of the various possible distortions that inflation can introduce in financial statements, and of the associated corrections that have been developed by accountants, and reviewed empirical evidence concerning the impact of these adjustments, and noted that when inflation rates are substantial, the change in accounting figures can be quite dramatic.
Abstract: This paper develops algebraic representations of the various possible distortions that inflation can introduce in financial statements, and of the associated corrections that have been developed by accountants. Adjustments to balance sheets and income statements are presented for two basic cases: general inflation, and inflation cum changing relative prices. Empirical evidence concerning the impact of these adjustments is reviewed, and it is noted that when inflation rates are substantial, the change in accounting figures can be quite dramatic. [134]
2 citations
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TL;DR: In this paper, the authors identify the macro conditions under which industrial growth and financial stability are most likely, and those conditions which are most prone to create disaster, and develop an empirical model which allows one to calibrate the strength and timing of each effect.
Abstract: This study identifies the macro conditions under which industrial growth and financial stability are most likely, and those conditions which are most prone to create disaster. The paper models interest rates, exchange rates, and aggregate demand conditions as affecting industrial growth and financial risk through two channels. First, because these variables affect firms' income, they affect firms net worth expansion. Second, because the link between macro variables and income depends upon the proportions in which firms hold fixed capital, inventories, financial assets, and debts, changes in macro variables also induce portfolio adjustments. The paper then develops an empirical model which allows one to calibrate the strength and timing of each effect. The paper is composed of two sections; one to develop the model, and one to report an application to Uruguayan data. There is also a brief summary section.