Refinance
Event details
| Date | 20.11.2015 |
| Hour | 10:30 › 12:00 |
| Speaker | John YIRAN ZHU (University of Pennsylvania) |
| Location | |
| Category | Conferences - Seminars |
This paper provides a micro-foundation for refinance. The micro-foundation relates the optimality of refinanceable contracts to the financing relationship being governed by a preference for robustness. As an application, I consider a canonical, dynamic financial contracting setting with asymmetric information, where the borrower privately observes the state of the world. Preference for robustness is sufficient and, in some sense, almost necessary for the optimal contract to be refinanceable debt.
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