Finance

Finance is an applied branch of economics that studies the ways in which individuals, business entities, and other organizations allocate resources over time and make decisions in the presence of uncertainty.

The faculty in the finance area have wide-ranging expertise in all major areas of finance, including:

  • Asset pricing, or how security prices and interest rates are determined in the market.
  • Corporate finance, or how corporations raise capital and make investment decisions.

The faculty strive to produce a broad range of finance-related research that addresses topics of interest to academic researchers, practitioners, and policymakers. We communicate that research both through publication in scientific journals, and through the development of relevant and rigorous MBA and Executive Education programs. We also train and mentor future finance scholars through our PhD Program, which is regarded as one of the top finance doctoral programs worldwide.

Recent Journal Articles in Finance

Saumitra Jha, Moses Shayo
Econometrica. December
2019

Can participation in financial markets lead individuals to re-evaluate the costs of conflict, change their political attitudes and even their votes? Prior to the 2015 Israeli elections, we randomly assigned...

Arvind Krishnamurthy, Zhiguo He, Konstantin Milbradt
American Economic Review . April
2019, Vol. 109, Issue 4, Pages 1230-1262

What makes an asset a “safe asset”? We study a model where two countries each issue sovereign bonds to satisfy investors’ safe asset demands. The countries differ in the float...

Barney Hartman-Glaser, Hanno Lustig, Mindy X. Zhang
Journal of Finance (accepted). March
30 , 2019

Although the aggregate capital share of U.S. firms has increased, capital share at the firm‐level has decreased. This divergence is due to mega‐firms that produce a larger output share without...

Shai Bernstein, Emanuele Colonnelli, Benjamin Iverson
Journal of Finance. February
2019, Vol. 74, Issue 1, Pages 5-53

This paper investigates the consequences of liquidation and reorganization on the allocation and subsequent utilization of assets in bankruptcy. Using the random assignment of judges to bankruptcy cases as a...

YiLi Chien, Hanno Lustig, Kanda Naknoi
Journal of Monetary Economics (in press). February
2019

Empirical moments of asset prices and exchange rates imply that pricing kernels have to be almost perfectly correlated across countries. If they are not, observed real exchange rates are too...

Arvind Krishnamurthy, Zhiguo He
American Economic Journal Macroeconomics (Forthcoming).
2019
Systemic risk arises when shocks lead to states where a disruption in financial intermediation adversely affects the economy and feeds back into further disrupting financial intermediation. We present a macroeconomic...
Juliane Begenau
Journal of Financial Economics (accepted).
2019

This paper develops a quantitative dynamic general equilibrium model in which households’ preferences for safe and liquid assets constitute a violation of Modigliani and Miller. I show that the scarcity...

Xavier Giroud, Joshua D. Rauh
Journal of Political Economy (forthcoming).
2019

Using Census microdata on multi-state firms and their organizational forms, we estimate the impact of state taxes on business activity. For C corporations, employment and the number of establishments have...

Rebecca Diamond, Timothy James McQuade
Journal of Political Economy (forthcoming).
2019

We estimate the spillovers of properties financed by the Low Income Housing Tax Credit (LIHTC) onto surrounding neighborhood residents. We nonparametrically estimate the impact of LIHTC development on nearby house...

Nicholas A. Bloom, Philip Bunn, Scarlet Chen, Paul Mizen, Pawel Smietanka, Greg Thwaites, Gary Young
Fiscal Studies. December
2018, Vol. 39, Issue 4, Pages 555-580

The UK’s decision to leave the EU in the 2016 referendum created substantial uncertainty for UK businesses. The nature of this uncertainty is different from that of a typical uncertainty...