Optimal employment subsidies and market structures in industries with unemployment

In this paper we analyze the issue of optimal employment subsidiesin imperfectly competitive industries in which a distortionin the labour market generates involuntary unemployment. Asa benchmark case, we focus on monopolies and duopolies and oncomplete information between firms and government. We characterizethe levels and creations of employment in the subsidized industryand we check when such employment policies are more favorableto the least productive firms.     

Corporate incentives for hedging and hedge accounting

This article explores the information effect of financial riskmanagement. Financial hedging improves the informativeness ofcorporate earnings as a signal of management ability and projectquality by eliminating extraneous noise. Managerial and shareholderincentives regarding information transmission may differ, however,leading to conflicts regarding an optimal hedging policy. Weshow that these incentives depend on the accounting informationmade available by the firm. Under some circumstances, if hedgetransactions are not disclosed (i.e., firms report only aggregateearnings), managers hedge to achieve greater risk reductionthan they would if full disclosure were required. In these cases,it is optimal for shareholders to request only aggregate accountingreports.