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

Anat R. Admati
Journal of Economic Perspectives (forthcoming). July
2017

Financialized corporate governance as commonly practiced causes significant inefficiencies and harm. Corporations and governments routinely fail to design and enforce rules that reduce the opacity of corporations, create effective commitments...

Sumit Agarwal, gene Amromin, Itzhak Ben-David, Souphala Chomsisengphat, Tomasz Piskorski, Amit Seru
Journal of Political Economy. June
2017, Vol. 125, Issue 3, Pages 654-712

We evaluate the effects of the 2009 Home Affordable Modification Program (HAMP) that provided intermediaries with sizable financial incentives to renegotiate mortgages. HAMP increased intensity of renegotiations and prevented a...

Ralph S. J. Koijen, Hanno Lustig, Stijn Van Nieuwerburgh
Journal of Monetary Economics . June
2017, Vol. 88, Pages 50-69

We show that bond factors, which predict future U.S. economic activity at business cycle horizons, are priced in the cross-section of U.S. stock returns. High book-to-market stocks have larger exposures...

Jonathan B. Berk, Jules H. van Binsbergen
Financial Analyst Journal. May
2017, Vol. 73, Issue 2, Pages 25-32

We provide guidance to corporate managers and investors on how to select the discount rate when evaluating investment opportunities. When making corporate investment decisions on behalf of the equity investors...

Charles M. C. Lee, Eric C. So
Journal of Financial Economics. May
2017, Vol. 124, Issue 2, Pages 331-348

We show that analyst coverage proxies contain information about expected returns. We decompose analyst coverage into abnormal and expected components using a simple characteristic-based model and show that firms with...

Shai Bernstein, Arthur Korteweg, Kevin Laws
Journal of Finance. April
2017, Vol. 72, Issue 2, Pages 509-538

This paper uses a randomized field experiment to identify which start-up characteristics are most important to investors in early-stage firms. The experiment randomizes investors’ information sets of fund-raising start-ups. The...

Hanno Lustig, Michael Katz, Lars Nielson
The Review of Financial Studies. February
2017, Vol. 30, Issue 2, Pages 539-587

Local stock markets adjust sluggishly to changes in local inflation. When the local rate of inflation increases, local investors subsequently earn lower real returns on local stocks, but not on...

Journal Article|
Matthias Fleckenstein, Francis A. Longstaff, Hanno Lustig
The Review of Financial Studies (accepted).
2017

We study the nature of deflation risk by extracting the objective distribution of inflation from the market prices of inflation swaps and options. We find that the market expects inflation...

Gregor Matvos, Amit Seru, Rui Silva
Journal of Financial Economics (forthcoming).
2017

We find new facts that relate the evolution of firm scope to the changing frictions in external capital markets over the last three decades. We find that large, diversified publicly...

Marco Di Maggio, Benjamin Keys, Tomasz Piskorski, Rodney Ramcharan, Amir Kermani, Amit Seru, Vincent Yao
American Economic Review (conditionally accepted).
2017

Do households benefit from expansionary monetary policy? We investigate how indebted households’ consumption and saving decisions are affected by anticipated changes in monthly interest payments. We focus on borrowers with...