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

Arvind Krishnamurthy, Zhiguo He
American Economic Journal Macroeconomics (Forthcoming).
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...
Xavier Giroud, Joshua D. Rauh
Journal of Political Economy (forthcoming).

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).

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...

Barney Hartman-Glaser, Hanno Lustig, Mindy X. Zhang
Journal of Finance (forthcoming). December

Although the aggregate capital share for U.S. firms has increased, the firm-level capital share has decreased on average. The divergence is due to the largest firms. While these mega-firms now...

Hanno Lustig, Adrien Verdelhan
American Economic Review (forthcoming). December

Compared to the predictions of complete market models, actual exchange rates are puzzlingly smooth and only weakly correlated with macro-economic fundamentals, suggesting that market incompleteness plays a key role in...

Zhiguo He, Arvind Krishnamurthy
Annual Review of Financial Economics. November
2018, Vol. 10, Pages 173-197

“Intermediary asset pricing” understands asset prices and risk premia through the lens of frictions in financial intermediation. Perhaps motivated by phenomena in the financial crisis, intermediary asset pricing has been...

Brett Green, Jeffrey Zwiebel
Management Science. November
2018, Vol. 64, Issue 11, Pages 4967-5460

We test for a “hot hand” (i.e., short-term predictability in performance) in Major League Baseball using panel data. We find strong evidence for its existence in all 10 statistical categories...

Benjamin Hébert
The Review of Economic Studies. October
1 , 2018, Vol. 85, Issue 4, Pages 2214-2252

I show that, in a benchmark model, debt securities minimize the welfare losses associated with the moral hazards of excessive risk-taking and lax effort. For any security design, the variance...

Cosmin Ilut, Matthias Kehrig, Martin K. Schneider
Journal of Political Economy. October
2018, Vol. 126, Issue 5, Pages 2011-2071

Concave hiring rules imply that firms respond more to bad shocks than to good shocks. They provide a unified explanation for several seemingly unrelated facts about employment growth in macro-...