Why Iceland can now remove capital controls
Iceland has just announced it is getting rid of its capital controls. This column argues that the government’s plan is a credible, efficient and fair...
Default and political survival in networked democracies since 1870
Many fear that a Greek default would lead voters elsewhere in Europe to favour default over austerity. This column argues that it is more likely to...
Blended Automation: Integrating Algorithms on the Floor of the New York Stock Exchange
The recent automation of the American stock market has replaced floor intermediaries with trading algorithms, calling into question the sociological...
The Bankers’ Paradox: The Political Economy of Macroprudential Regulation
Macroprudential regulation, which has emerged as a new departure in financial regulation (albeit with a longer heritage), since the financial crash...
Why risk is hard to measure
Regulators and financial institutions increasingly depend on statistical risk forecasting. This column argues that most risk modelling approaches are...
Why risk is so hard to measure
This paper analyzes the robustness of standard risk analysis techniques, with a special emphasis on the specifications in Basel III. We focus on the...
When Arm’s Length Is Too Far. Relationship Banking over the Credit Cycle
Using a novel way to identify relationship and transaction banks, we study how banks’ lending techniques affect credit constraints of small and medium...
Dynamic Equilibrium with Rare Events and Heterogeneous Epstein-Zin Investors
We consider a general equilibrium Lucas (1978) economy with one consumption good and two heterogeneous Epstein-Zin investors. The output is subject to...
News Shocks and Asset Prices
We study the importance of anticipated shocks (news) for understanding the comovement between macroeconomic quantities and asset prices. We find that...
Post-Crisis banking regulation: Evolution of economic thinking as it happened on Vox
This column introduces a new Vox eBook collecting some of the best Vox columns on financial regulations, starting with the fundamentals of financial...
Post-Crisis Banking Regulation: Evolution of economic thinking as it happened on Vox
This eBook collects some of the best Vox columns on financial regulations, starting with the fundamentals of financial regulations, moving on to bank...
Wolf Pack Activism
It is alleged that activist hedge funds congregate around a common target, with one acting as the "lead" activist and others as peripheral activists...
A Tug of War: Overnight Versus Intraday Expected Returns
We decompose the abnormal profits associated with well-known patterns in the cross-section of expected returns into their overnight and intraday...
The Dynamics of Financially Constrained Arbitrage
We develop a model of financially constrained arbitrage, and use it to study the dynamics of arbitrage capital, liquidity, and asset prices...