John Rust | Georgetown University (original) (raw)

Papers by John Rust

SSRN Electronic Journal, 2015

This study reviews one of the unresolved research puzzles in corporate finance; why do companies ... more This study reviews one of the unresolved research puzzles in corporate finance; why do companies pay dividends? In this context, a qualitative study dealing with content analysis is carried out based on theoretical and empirical researches. After critically reviewing 407 research articles in dividend policy, 50 empirical studies were taken as the sample based on relevance to the research puzzle. The content analysis provides some significant insights and stylized facts with regard to the corporate dividend policy. However, the research conducted is fundamentally flawed in its design which is based on quantitative approaches in order to elucidate a behavioural explanation. As a result, most of the study findings cannot be relied upon to see consistency with the theories in question.Despite years of theoretical and empirical evidences, the findings show that the dividend puzzle still remains as an unresolved research phenomenon in corporate finance due to lack of unanimity among the researchers over the explanations. This study provides the reader with an all-embracing understanding of the theories and empirical explanations of the dividend puzzle. It is imperative for the researchers to focus on all empirical and theoretical explanations in a single study and test them simultaneously using a triangular approach in order to have a single consensus over this puzzle. Thus, developing a new paradigm or models to deal with the dividend puzzle is suggested and until then, the deduction of various theories in different studies is inconclusive and inconsistent.

Handbook of Computational Economics, 1996

The New Palgrave Dictionary of Economics

2005, http://www. be. edu/crr, 2003

Journal of Political Economy, 2003

work was made possible by the financial support of the Economic Research Initiative on the Uninsu... more work was made possible by the financial support of the Economic Research Initiative on the Uninsured at the University of Michigan. The authors also gratefully acknowledge additional financial support from the National Institute on Aging under grant 1 P01 AG022481-01A1. Ben´ıtez-Silva is grateful for the hospitality of the Departments of Economics of the University of Maryland and Universitat Pompeu Fabra during the completion of this paper, and to the Fundaci´on BBVA for financial support. We thank the staff of the University of Michigan Survey Research Center and the Health and Retirement Study for answering numerous questions. The opinions expressed in this paper are ours alone and do not represent the opinions of ERIU, or the Board of Governors of the Federal Reserve System or its staff. This paper analyzes the dynamics of health insurance coverage, health expenditures, and health status in the decade expanding from 1992 to 2002, for a cohort of older Americans. We follow 13,594...

We present a dynamic extension of the classic static model of Bertrand price competition that all... more We present a dynamic extension of the classic static model of Bertrand price competition that allows competing duopolists to undertake cost-reducing investments in an attempt to "leapfrog" their rival and attain, at least temporarily, low-cost leadership. The model resolves a paradox about investing in the presence of Bertrand price competition: if both firms simultaneously invest in the current state-of-the-art production technology and thereby attain the same marginal cost of production, the resulting price competition drives the price down to marginal cost and profits to zero. Thus, it would seem that neither firm can profit from undertaking the cost-reducing investment, so the firms should not have any incentive to undertake cost-reducing investments if they are Bertrand price competitors. We show this simple intuition is incorrect. We formulate a dynamic model of price and investment competition as a Markov-perfect equilibrium to a dynamic game. We show that even when...

This paper analyzes the dynamics of health insurance coverage, health expenditures, and health st... more This paper analyzes the dynamics of health insurance coverage, health expenditures, and health status in the decade expanding from 1992 to 2002, for a cohort of older Americans. We follow 13,594 individuals interviewed in Waves 1 to 6 of the Health and Retirement Study, most of whom were born between 1930 and 1940, as they transition from work into retirement. Although this i?½depression cohorti?½ is by and large fairly well prepared for retirement in terms of pension coverage and savings, we identify significant gaps in their health insurance coverage, especially among the most disadvantaged members of this cohort. We find that government health insurance programsi?½particularly Medicare and Medicaidi?½significantly reduce the number of individuals who are uninsured and the risks of large out of pocket health care costs. However, prior to retirement large numbers of these respondents were uninsured, nearly 18% at the first survey in 1992. Moreover, a much larger share, about 55% of...

Recruitment, Retention and Retirement in Higher Education, 2005

Journal of Economic Literature

This essay reviews Kenneth I. Wolpin's (2013) monograph The Limits of Inference without Theor... more This essay reviews Kenneth I. Wolpin's (2013) monograph The Limits of Inference without Theory, which arose from lectures he presented at the Cowles Foundation in 2010 in honor of Tjalling Koopmans. While I readily agree with Wolpin's basic premise that empirical work that eschews the role of economic theory faces unnecessary self-imposed limits relative to empirical work that embraces and tries to test and improve economic theory, it is important to be aware that the use of economic theory is not a panacea. I point out that there are also serious limits to inference with theory: 1) there may be no truly “structural” (policy invariant) parameters, a key assumption underpinning the structural econometric approach that Wolpin and the Cowles Foundation have championed; 2) there is a curse of dimensionality that makes it very difficult for us to elucidate the detailed implications of economic theo- ries, which is necessary to empirically implement and test these theories; 3) the...

We construct an intertemporal model of rent-maximizing behaviour on the part of a timber harveste... more We construct an intertemporal model of rent-maximizing behaviour on the part of a timber harvester under potentially multi-dimensional risk as well as geographical het- erogeneity. Subsequently, we use recursive methods (in particular, the method of dy- namic programming) to characterize the optimal policy function, the rent-maximizing timber-harvesting profile. One noteworthy feature of our application is the unique and detailed information we have organized in the form of a dynamic geographical information system to account for site-specific cost heterogeneity in harvesting and transportation as well as uneven-aged stand dynamics in timber growth and yield across space and time in the presence of stochastic lumber prices. Our model is a powerful tool with which to investigate issues of aggregation and to understand the evident cycles that are predicted in harvesting under our assumptions.