Testing Contract Theory: A Survey of Some Recent Work

While the theoretical literature on contracts has been enormous since the seventies, empirical tests of the theory have long remained scarce. However, new empirical work has been developed in the last ten years that sheds light on the empirical validation of the theory. This paper aims at surveying the recent empirical work on contracts. The focus throughout is on the need to properly account for unobserved heterogeneity.

Investment, the cost of capital, and monetary policy in the nineties in France: a panel data investigation

Using a large panel of 6,946 French manufacturing firms, this paper investigates the effect of monetary policy on investment from 1990 to 1999 through the cost-of-capital and the cash-flow channels. We compare several specifications of neo-classical demand for capital, taking into account transitory dynamics. The user cost of capital has a significant negative elasticity with respect to capital using traditional Within estimates, or as long as cash-flow is not added to the regression when using Generalised Method of Moments estimates. Asymmetries of effect of monetary policy are evaluated for different groups of firms which differ in terms of informational asymmetries. When dummy variables related to firms which are more sensitive to cash-flow are added in the model, the user cost elasticity is significant again JEL Classification: C23, D21, D92cost of capital, generalised method of moments, Investment, monetary policy

Edge states for topological insulators in two dimensions and their Luttinger-like liquids

Topological insulators in three spatial dimensions are known to possess a precise bulk/boundary correspondence, in that there is a one-to-one correspondence between the 5 classes characterized by bulk topological invariants and Dirac hamiltonians on the boundary with symmetry protected zero modes. This holographic characterization of topological insulators is studied in two dimensions. Dirac hamiltonians on the one dimensional edge are classified according to the discrete symmetries of time-reversal, particle-hole, and chirality, extending a previous classification in two dimensions. We find 17 inequivalent classes, of which 11 have protected zero modes. Although bulk topological invariants are thus far known for only 5 of these classes, we conjecture that the additional 6 describe edge states of new classes of topological insulators. The effects of interactions in two dimensions are also studied. We show that all interactions that preserve the symmetries are exactly marginal, i.e. preserve the gaplessness. This leads to a description of the distinct variations of Luttinger liquids that can be realized on the edge.Comment: 13 pages with 4 Tables. Version 2: published version. Some clarifying discussions has been added; main results are unchange