Working Paper
Debt, hedging, and human capital
Wall, Larry D.; Smith, Stephen D. (2005)
This paper provides a theory of debt and hedging based on human capital. We distinguish human capital from physical capital in two ways: (1) human capital is inalienable and can exercise a one-sided option to leave the firm, and (2) human capital is not perfectly replaceable. We show that a firm may reach the first best solution while issuing debt or equity to outsiders provided that either the insiders receive a senior claim or that the firm hedges. We then show that, given asymmetric information concerning costs, the only viable solution has the firm issuing debt to outsiders and hedging.
FRB Atlanta Working Paper , Paper 2005-30

Working Paper
Contractual opportunism, limited liability, and the role of financial coalitions
Smith, Stephen D.; Noe, Thomas H. (1994)
FRB Atlanta Working Paper , Paper 94-17

Working Paper
Decentralized production and public liquidity with private information
Nachman, David C.; Smith, Stephen D. (2000)
Firms with private information about the outcomes of production under uncertainty may face capital (liquidity) constraints that prevent them from attaining efficient levels of investment in a world with costly and/or imperfect monitoring. As an alternative, we examine the efficiency of a simple pooling scheme designed to provide a public (cooperative) supply of liquidity that results in the first best outcome for economic growth. We show that if, absent aggregate uncertainty, the elasticity of scale of the production technology is sufficiently small, then efficient levels of investment and ...
FRB Atlanta Working Paper , Paper 2000-2

Working Paper
Emerging debt and equity markets: an exploratory investigation of integration using daily data
Smith, Stephen D.; Rebello, Michael J.; Chahal, Mandeep S. (1996)
In this paper we examine integration between emerging and U.S. debt and equity markets. We first investigate price changes around significant "events," in this case changes in short-term U.S. interest rates brought about by actions of the Federal Reserve. Second, we estimate the predictability of returns using both domestic and U.S. variables. Finally, we test whether a single latent variable can explain these returns. The evidence suggests that the degree of integration varies with security types and the country of origin. However, these differences between security types become less ...
FRB Atlanta Working Paper , Paper 96-7

Journal Article
The convexity trap: pitfalls in financing mortgage portfolios and related securities
Smith, Stephen D.; Gilkeson, James H. (1992-11)
Economic Review , Issue Nov , Pages 14-27

Working Paper
Some implications of risk neutrality for time variation in stock returns
Smith, Stephen D.; Best, Ronald W. (1993)
FRB Atlanta Working Paper , Paper 93-4

Journal Article
Policy essay--new tools for regulators in a high-tech world
Tschinkel, Sheila L.; Smith, Stephen D. (1993-03)
Economic Review , Issue Mar , Pages 45-50

Journal Article
Financial panics, bank failures, and the role of regulatory policy
Wall, Larry D.; Smith, Stephen D. (1992-01)
Economic Review , Issue Jan , Pages 1-11

Working Paper
A note on competition, fixed costs, and the profitability of depository intermediates
Hasan, Iftekhar; Smith, Stephen D. (1992)
FRB Atlanta Working Paper , Paper 92-12

Working Paper
A note on forward biases and equilibrium foreign exchange hedging in a production economy
Kumar, Vikram; Smith, Stephen D. (1992)
FRB Atlanta Working Paper , Paper 92-9