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

Markus Brunnermeier, Arvind Krishnamurthy
The Review of Corporate Finance Studies. November
2020, Vol. 9, Issue 3, Pages 656-665

The 2020 COVID-19 crisis can spur research on firms’ corporate finance decisions and their macroeconomic implications, similar to the wave of important research on banking and household finance triggered by...

Priyank Gandhi, Hanno Lustig, Alberto Plazzi
The Review of Financial Studies. September
2020, Vol. 33, Issue 9, Pages 4231–4271

Across a wide panel of countries, the top 10% of financial stocks on average account for over 20% of a country’s market capitalization but earn on average significantly lower returns...

Joshua D. Rauh, Irina Stefanescu, Stephen P. Zeldes
Journal of Public Economics. August
2020, Vol. 188

Companies that freeze defined benefit pension plans save the equivalent of 13.5% of the long-horizon payroll of current employees. Furthermore, firms with higher prospective accruals are more likely to freeze...

Sumit Agarwal, Wenlan Qian, Amit Seru, Jian Zhang
Journal of Financial Economics. August
2020, Vol. 137, Issue 2, Pages 430–450

Using a comprehensive sample of credit card data from a leading Chinese bank, we show that government bureaucrats receive 16% higher credit lines than non-bureaucrats with similar income and demographics,...

Hanno Lustig, Robert Richmond
Review of Financial Studies. August
2020, Vol. 33, Issue 8, Pages 3492–3540

We relate the risk characteristics of currencies to measures of physical, cultural, and institutional distance. The currencies of countries which are more distant from other countries are more exposed to...

Marco Giacoletti, Kristoffer T. Laursen, Kenneth J. Singleton
Journal of Finance. July
2020

We study risk premiums in the U.S. Treasury bond market from the perspective of a Bayesian econometrician BL who learns in real time from disagreement among investors about future bond...

Stefano Giglio, Matteo Maggiori, Johannes Stroebel
Econometrica. July
2020, Vol. 88, Issue 4, Pages 1767–1770

In Giglio, Maggiori, and Stroebel (2016), we propose and implement a new test for classic rational bubbles. Such bubbles derive their value from each agent’s rational expectation of being able...

YiLi Chien, Hanno Lustig, Kanda Naknoi
Journal of Monetary Economics. June
2020, Vol. 112, Pages 129-144

Empirical moments of asset prices and exchange rates imply that pricing kernels are almost perfectly correlated across countries. Otherwise, observed real exchange rates would be too smooth for high Sharpe...

Christopher Hennessy, Akitada Kasahara, Ilya A. Strebulaev
Journal of Financial Economics. March
2020, Vol. 135, Issue 3, Pages 555–576

Absent theoretical guidance, empiricists have been forced to rely upon numerical comparative statics from constant tax rate models in formulating testable implications of trade-off theory in the context of natural...

Barney Hartman-Glaser, Benjamin Hébert
Journal of Finance. February
2020, Vol. 75, Issue 1, Pages 463-506

We model the widespread failure of contracts to share risk using available indices. A borrower and lender can share risk by conditioning repayments on an index. The lender has private...

Faculty in Finance

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Lecturers in Finance

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