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

Barney Hartman-Glaser, Benjamin Hébert
Journal of Finance (forthcoming). February
2020

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...

Paul Pfleiderer
Economica. January
2020, Vol. 87, Issue 345, Pages 81-107

In this paper I discuss how theoretical models in finance and economics are used in ways that make them ‘chameleons’, and how chameleons devalue the intellectual currency and muddy policy...

Lin William Cong, Steven Grenadier, Yunzhi Hu
Journal of Financial Economics. January
2020, Vol. 135, Issue 1, Pages 1-15

We model a dynamic economy with strategic complementarity among investors and study how endogenous government interventions mitigate coordination failures. We establish equilibrium existence and uniqueness, and we show that one...

Paul Gompers, Will Gornal, Steven N. Kaplan, Ilya A. Strebulaev
Journal of Financial Economics. January
2020, Vol. 135, Issue 1, Pages 169-190

We survey 885 institutional venture capitalists (VCs) at 681 firms to learn how they make decisions. Using the framework in Kaplan and Strömberg (2001), we provide detailed information on VCs’...

Matteo Maggiori, Brent Neiman, Jesse Schreger
Journal of Political Economy (forthcoming). January
2020

We establish currency as an important factor shaping global portfolios. Using a new securitylevel dataset, we demonstrate that investor holdings are biased toward their own currencies to such an extent...

Will Gornall, Ilya A. Strebulaev
Journal of Financial Economics. January
2020, Vol. 135, Issue 1, Pages 120-143

We develop a valuation model for venture capital–backed companies and apply it to 135 US unicorns, that is, private companies with reported valuations above $1 billion. We value unicorns using...

Arvind Krishnamurthy, Timothy James McQuade, Adam Guren
Journal of Finance.
2020, Vol. Forthcoming

How can mortgages be redesigned to reduce housing market volatility, consumption volatility, and default? How does mortgage design interact with monetary policy? We answer these questions using a quantitative equilibrium...

Christopher A. Hennessy, Ilya A. Strebulaev
Journal of Finance (forthcoming). November
16 , 2019

We derive analytical relationships between shock responses and theory‐implied causal effects (comparative statics) in dynamic settings with linear profits and linear‐quadratic stock accumulation costs. For permanent profitability shocks, responses can...

Arvind Krishnamurthy, Zhiguo He
American Economic Journal Macroeconomics . October
2019, Vol. 11, Issue 4, Pages 1-37
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...
Peter A.E. Koudijs, Laura Salisbury, Gurpal Sran
forthcoming Journal of Finance. October
2019

We study whether banks are riskier if managers have less liability. We focus on New England between 1867 and 1880 and consider the introduction of marital property laws that limited...