Discussion Papers

We provide novel evidence of priced correlation risk in the foreign exchange market. Currencies that perform badly (well) during periods of high...

We investigate the hypothesis that shareholder empowerment may have led to more bank bailouts during the recent financial crisis. To test this...

We study economies of scale in banking by viewing banks as combinations of financial and human capital that create rents which accrue to investors and...

We study managerial incentive provision under moral hazard in a firm subject to stochastic growth opportunities. In our model, managers are dismissed...

We study the unique governance dynamics surrounding family ownership in a voluntary regulatory arena where we can directly observe the impact of firm...

In this paper we survey the theoretical and empirical literature on market liquidity. We organize both literatures around three basic questions: (a)...

We analyze how asymmetric information and imperfect competition affect liquidity and asset prices. Our model has three periods: agents are identical...

We study dynamic general equilibrium in one-tree and two-trees Lucas economies with one consumption good and two CRRA investors with heterogeneous...

We propose a new theory of suboptimal risk-taking based on contractual externalities. We examine an industry with a continuum of firms. Each firm’s...

In choosing transparency, firms must trade off the benefits from better access to finance against the cost of a greater tax burden. We study this...

We develop a model of securitized (Originate, then Distribute) lending, in which both publicly observed aggregate shocks to values of securitized loan...

We propose a new estimator of multivariate ex-post volatility that is robust to microstructure noise and asynchronous data timing. The method is based...

This paper explores how different types of financial regulation could combat many of the phenomena that were observed in the financial crisis of 2007...

We develop a stylized model of efficient contracting in which firms compete for CEOs. The optimal contracts are designed to retain and insure CEOs...

This paper explores the trading incentives of financial institutions induced by the interaction between regulatory accounting rules and capital...

The paper presents a theory of optimal transparency in the financial system when financial institutions have short-term liabilities and are exposed to...