Fed in Print
All Title Author Abstract Keywords
Bank Series Content Type Author JEL Classification Keyword

Journal Article

The reduced form as an empirical tool: a cautionary tale from the financial veil


Abstract: An analysis of the limitations of the reduced-form empirical strategy as a method of testing the Modigliani-Miller model of corporate financial structure, demonstrating that an empirical strategy that is not closely tied to an underlying economic theory of behavior will usually yield estimates that are too imprecise or too unreliable to form a basis for policy.

Access Documents

File(s): https://fraser.stlouisfed.org/scribd/?toc_id=354664&filepath=/docs/publications/frbclevreview/rev_frbclev_1996q1.pdf&start_page=17#scribd-open

File(s): File format is text/html http://www.clevelandfed.org/Research/Review/1996/96-q1-craig.pdf

Authors

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Review

Publication Date: 1996

Issue: Q I

Pages: 16-25