Q&A: Bankrupt Firms: Who's Buying?
Why do shares of widely held bankrupt firms such as GM often trade well above zero even though the interests of common stock holders appear almost certain to be eliminated in reorganization? Is this...
View ArticleQ&A: Does Gold Belong in My Portfolio?
Based on spot price data from January 1970 through February 2010, the average return on gold bullion was almost exactly the same as the S&P 500 at 88 basis points per month. Volatility was...
View ArticleQ&A: Semi-Variance: A Better Risk Measure?
Is semi-variance a more useful measure of downside risk than standard deviation? My clients aren't worried about market surges, they're worried about market crashes. (Read the full entry)
View ArticleQ&A: Is Insider Trading Beneficial?
Some economists argue that prohibiting insider trading does more harm than good by reducing the flow of useful information. Do you agree? (Read the full entry)
View ArticleQ&A: Reducing Risk with Options
Can put or call options be used to achieve a more predictable risk-return tradeoff? For example, should I purchase put options to minimize equity portfolio losses? (Read the full entry)
View ArticleQ&A: Public vs. Private Equity
Should investors expect higher returns from private equity investments as compensation for the lack of liquidity? Does private equity offer a useful diversification benefit in a balanced portfolio?...
View ArticleQ&A: The Limits of Arbitrage
To what extent do the limits of arbitrage (Schleifer and Vishny, 1997) discredit the idea of market efficiency? (Read the full entry)
View ArticleQ&A: Are Chief Executives Overpaid?
What model for executive compensation at public companies would you like to see? Should shareholders vote on these matters? (Read the full entry)
View ArticleIncentivizing Better Quality of Care: The Role of Medicaid and Competition in...
This paper develops a model of the nursing home industry to investigate the quality effects of policies that either raise regulated reimbursement rates or increase local competition. Using data from...
View ArticleDoes Size Matter? Bailouts with Large and Small Banks -- by Eduardo Davila,...
We explore how large and small banks make funding decisions when the government provides system-wide bailouts to the financial sector. We show that bank size, purely on strategic grounds, is a key...
View ArticleEvolution of the Infant Health Production Function -- by Hope Corman, Dhaval...
Michael Grossman's seminal publication on the demand for health and health production (Grossman 1972) has spawned a substantial body of research focusing on the production of infant health. This...
View ArticleInferring the Ideological Affiliations of Political Committees via Financial...
About two thirds of the political committees registered with the Federal Election Commission do not self identify their party affiliations. In this paper we propose and implement a novel Bayesian...
View ArticleThe Effect of the Risk Corridors Program on Marketplace Premiums and...
We investigate the effect of the Risk Corridors (RC) program on premiums and insurer participation in the Affordable Care Act (ACA)'s Health Insurance Marketplaces. The RC program, which was defunded...
View ArticlePersistent Effects of Teacher-Student Gender Matches -- by Jaegeum Lim,...
We exploit data from middle schools in Seoul, South Korea, where students and teachers are randomly assigned to classrooms, and find that female students taught by a female versus a male teacher score...
View ArticleThe Mortality Effects of Retirement: Evidence from Social Security...
Social Security eligibility begins at age 62, and approximately one third of Americans immediately claim at that age. We examine whether age 62 is associated with a discontinuous change in aggregate...
View ArticleA Macroeconomic Model with Financial Panics -- by Mark Gertler, Nobuhiro...
This paper incorporates banks and banking panics within a conventional macroeconomic framework to analyze the dynamics of a financial crisis of the kind recently experienced. We are particularly...
View ArticleScale versus Scope in the Diffusion of New Technology: Evidence from the Farm...
Using the farm tractor as a case study, I show that lags in technology diffusion arise along two distinct margins, which I term scale and scope. Though tractors are now used in nearly every...
View ArticleOne Markup to Rule Them All: Taxation by Liquor Pricing Regulation -- by...
Government often chooses simple rules to regulate industry even when firms and consumers are heterogeneous. We evaluate the implications of this practice in the context of alcohol pricing where the...
View ArticleTaxes and Turnout -- by Felix Bierbrauer, Aleh Tsyvinski, Nicolas D. Werquin
We develop a model of political competition with endogenous turnout and endogenous platforms. Parties face a trade-off between maximizing their base and getting their supporters out to vote. We study...
View ArticleThe Effects of Quantitative Easing: Taking a Cue from Treasury Auctions -- by...
To understand the effects of large-scale asset purchase programs recently implemented by central banks, we study how markets absorb large demand shocks for risk-free debt. Using high-frequency...
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