We propose and test a catering theory of nominal stock prices. The theory predicts that when investors place higher valuations on low-price firms, managers respond by supplying shares at lower price levels, and vice-versa. We confirm these predictions in time-series and firm-level data using

We propose and test a catering theory of nominal stock prices. The theory predicts that when investors place higher valuations on low-price firms, managers will maintain share prices at lower levels, and vice-versa. Using measures of time-varying catering incentives based on valuation ratios, split

of Arizona. We thank Jay Ritter for providing data. Baker and Greenwood gratefully acknowledge financial support from the Division of Research of the Harvard Business School. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

I develop a general equilibrium model with sticky prices, credit constraints, nominal loans and asset prices. Changes in asset prices modify agents ’ borrowing capacity through collateral value; changes in nominal prices affect real repayments through debt deflation. Monetary policy shocks move

We examine the frequency of price changes for 350 categories of goods and services covering about 70 % of consumer spending, based on unpublished data from the BLS for 1995 to 1997. Compared with previous studies we find much more frequent price changes, with half of goods' prices lasting less

Abstract not found

Awareness of individual and group activities is critical to successful collaboration and is commonly supported in CSCW systems by active, information generation mecha-nisms separate from the shared workspace. These mechanisms pena~ise information providers, presuppose rel-evance to the recipient

GPFS is IBM's parallel, shared-disk file system for cluster computers, available on the RS/6000 SP parallel supercomputer and on Linux clusters. GPFS is used on many of the largest supercomputers in the world. GPFS was built on many of the ideas that were developed in the academic community

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Abstract not found