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

Darrell Duffie, Antje Berndt, Rohan Douglas, Mark Ferguson
Review of Finance, forthcoming.
2018

We measure credit risk premia - prices for bearing corporate default risk in excess of expected default losses - using Markit CDS and Moody’s Analytics EDF data. We find dramatic variation...

Benjamin Hébert
The Review of Economic Studies (forthcoming). December
22 , 2017

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...

Shai Bernstein, Emanuele Colonnelli, Benjamin Iverson
Journal of Finance (forthcoming). November
2017

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...

Marco Di Maggio, Benjamin Keys, Tomasz Piskorski, Rodney Ramcharan, Amir Kermani, Amit Seru, Vincent Yao
American Economic Review. November
2017, Vol. 107, Issue 11, Pages 3350-3388

Exploiting variation in the timing of resets of adjustable-rate mortgages (ARMs), we find that a sizable decline in mortgage payments (up to 50 percent) induces a significant increase in car...

Darrell Duffie, Piotr Dworczak, Haoxiang Zhu
Journal of Finance. October
2017, Vol. 72, Issue 5, Pages 1983-2044

We characterize the price-transparency role of benchmarks in over-the-counter markets. A benchmark can, under conditions, raise social surplus by increasing the volume of beneficial trade, facilitating more efficient matching between dealers...

Benjamin Hébert, Jesse Schreger
American Economic Review. October
2017, Vol. 107, Issue 10, Pages 3119-3145

We estimate the causal effect of sovereign default on the equity returns of Argentine firms. We identify this effect by exploiting changes in the probability of Argentine sovereign default induced...

Victoria Vanasco
Journal of Finance. October
2017, Vol. 72, Issue 5, Pages 1937-1982

This paper explores the tension between asset quality and market liquidity. I model an originator who screens assets whose cash flows are later sold in secondary markets. Screening improves asset...

Charles M. C. Lee, Doron Israeli, Suhas Sridharan
Review of Accounting Studies. September
2017, Vol. 22, Issue 3, Pages 1048-1083

We examine whether an increase in ETF ownership is accompanied by a decline in pricing efficiency for the underlying component securities. Our tests show an increase in ETF ownership is...

Arvind Krishnamurthy
International Journal of Central Banking. September
2017, Vol. 13, Issue 3, Pages 277-285

I discuss the role of debt in financial crises and macroprudential tools to manage debt. A principal conclusion is that changes in mortgage contract designs, an ex ante measure aimed...

Jonathan B. Berk, Jules H. van Binsbergen, Binying Liu
Forthcoming: Journal of Finance. August
28 , 2017

We establish an important role for the firm by studying capital reallocation decisions of mutual fund firms. The firm’s decision to reallocate capital among its mutual fund managers adds at...