We develop an equilibrium model with moral hazard, which arises because some productivity shocks are privately observed by firm managers only. We characterize the optimal contract and its implications for firm size, growth, and managerial pay-performance sensitivity and exploit them to quantify the severity of the moral hazard problem. Our estimation suggests that unobservable shocks are relatively modest and account for about 10% of the total variation of firm output. Nonetheless, moral-hazard-induced incentive pay is quantitatively significant and accounts for 50% of managerial compensation. Eliminating moral hazard would result in about a 1% increase in aggregate output.

中文翻译：

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动态道德风险的定量模型

我们开发了一个具有道德风险的均衡模型，该模型的出现是因为某些生产力冲击仅由公司经理私下观察到。我们描述了最优合同及其对公司规模、增长和管理层薪酬绩效敏感性的影响，并利用它们来量化道德风险问题的严重性。我们的估计表明，不可观察的冲击相对温和，约占企业产出总变化的 10%。尽管如此，道德风险引起的激励薪酬在数量上是显着的，占管理层薪酬的 50%。消除道德风险将导致总产出增加约 1%。