Please, find the announcement below.

---------- Forwarded message ---------- From: Dipartimento Economia e Finanza LUISS Guido Carli < economiaefinanza@luiss.it> Date: Tue, May 29, 2018 at 3:19 PM Subject: Research Seminars of the Dept. of Economics and Finance / agenda To: Dipartimento Economia e Finanza LUISS Guido Carli < economiaefinanza@luiss.it>

The next Research Seminars of the Dept. of Economics and Finance are scheduled as follow:

*June 5 from 12:00 to 13:00, room 104 viale Romania https://maps.google.com/?q=104+viale+Romania&entry=gmail&source=g.*

*Speaker:* Andreea Minca (Cornell University)

*Title:* Dynamic Leveraging-Deleveraging Games

*Abstract:* We introduce a new mechanism for leverage dynamics, which results from a multi-period game of lenders with differentiated beliefs about the firm's fundamental returns. The game features strategic substitutability for low existing leverage and one-sided strategic complementarity for high existing leverage. The resulting leverage process exhibits a mean-reverting regime around a long-run level, as long as it stays below an instability level. Above the instability level, leverage becomes explosive. We validate our model empirically using aggregate returns of financial firms over the 10 year period 2001-2010. Our model predicts the leveraging/deleveraging of this period, and in particular the 2008 collapse in short term debt.

*Dipartimento di Economia e Finanza*

Viale Romania, 32 - 00197 Roma https://maps.google.com/?q=Viale+Romania,+32+-+00197+Roma&entry=gmail&source=g *def@luiss.it def@luiss.it* t +39 06 85225550 <06%208522%205550>

*www.luiss.it http://www.luiss.it/*

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