The Adjusted Solow Residual and Asset Returns

The purpose of this study is to examine the effects of a measured aggregate productivity shock on asset returns. To achieve this, a simple equilibrium business cycle model is presented to show that an aggregate productivity shock can be identi?ed as a factor affecting asset returns. The paper uses the Solow residual to measure productivity changes, but deviates from standard practice by incorporating variations in capital utilization rates. The paper ?rst develops the theoretical link between productivity shocks and asset returns with no adjustment costs, and then tests that link with the two measures of productivity, the Solow residual with and without variation in capital utilization. Results based on U.S post-war data show signi?cant differences in the dynamic impacts of these two measures of productivity. The VAR evidence suggests that technology changes, measured with variation in capital utilization, have a delayed impact on asset returns, a distinct ?nding. Finally, policy implications of the ?ndings are discussed.

Distributional Implications of Imperfect Capital Markets

The primary aim of this study is to analyze the impact of imperfections in capital markets on individuals' lifetime allocation plans and the resulting implications for income distribution. The model builds upon Samuelson's overlapping generation model with human capital and bequest motives playing central roles. The model developed here introduces a limit on the individual's ability to borrow. One of the most important consequences of this constraint is that human investment falls short of the level where its marginal return is equal to that of non-human investment. The comparative static results show that an individual who has been subject to the borrowing constraint would increase human investment unambiguously if he were allowed to borrow freely against future earnings. Discussions of the distributive implications of this result suggest that the elimination of the borrowing constraint has a potential of enhancing both intragenerational income equality and intergenerational mobility. The simulation results show that the elimination of the borrowing limit would bring about a significant improvement in income distribution without having an adverse effect on efficiency.

What are Best Practices for Retaining Employees During Mergers and Acquisitions?

The purpose of this report is to guide decision makers at this company, by offering the most recent theories and practices regarding talent retention programs. Recently mergers and acquisitions have become a major part of global business. During the M&A, it is important to manage the organizational and human resource issues. Our team focused on gathering real business cases. Then we highlight some suggestions from the best practices to create successful M&A. It is our intent that the research findings in this report will help to enlighten and inform the company’s leaders to guide the effective human management program centered on key talent, ultimately leading to organizational success