Working Papers

These papers are working drafts of research which often appear in final form in academic journals. The published versions may differ from the working versions provided here.

Arvind Krishnamurthy, Wenhao Li
September 2020

We develop a model of financial crises with both a financial amplification mechanism, via frictional intermediation, and a role for sentiment, via time-varying beliefs about an illiquidity state. We confront the model with data on...

Di Wu, Harikesh S. Nair, Tong Geng
August 28, 2020

As households reduce discretionary spending in response to the COVID-19 pandemic, concerns are high that a resulting fall in aggregate demand can lead to a lasting recession post-COVID-19. Consequently, policies aimed at stimulating consumer spending...

Aruna Ranganathan, Joshuamorris Hurwitz
August 24, 2020

A central project for occupational groups is acquiring and defending jurisdiction; scholars have investigated abstract knowledge, material resources, and social connections as channels by which this is accomplished. We propose a new mechanism, cultural capital,...

Aruna Ranganathan
August 11, 2020

Jobs consist of bundles of tasks. Most jobs involve one or a few core tasks as well as supplementary tasks, but we know little about how the nature of supplementary tasks might affect workers’ core...

Allison Koenecke, Michael Powell, Ruoxuan Xiong, Zhu Shen, Nicole Fischer, Sakibul Huq, Adham M. Khalafallah, Marco Trevisan, Pär Sparen, Juan J. Carrero, Akihiko Nishimura, Brian Caffo, Elizabeth A. Stuart, Renyuan Bai, Verena Staedtke, Nickolas Papadopoulos, Kenneth W. Kinzler, Bert Vogelstein, Shibin Zhou, Chetan Bettegowda, Maximilian F. Konig, Brett Mensh, Joshua T. Vogelstein, Susan Athey
August 2020

In severe viral pneumonia, including Coronavirus disease 2019 (COVID-19), the viral replication phase is often followed by hyperinflammation (‘cytokine storm syndrome’), which can lead to acute respiratory distress syndrome, multi-organ failure, and death. We previously...

Dana Foarta, Massimo Morelli
August 2020

Decision makers called to evaluate and approve a reform, proposed by an interest group, a politician, or a bureaucracy, suffer from a double asymmetric information problem: about the competence of the proposer and the consequences...

Zhengyang Jiang, Hanno Lustig, Stijn Van Nieuwerburgh, Mindy Z. Xiaolan
August 2020

When debt is priced fairly, governments face a trade-off between insuring bondholders and taxpayers. If the government decides to fully insure bondholders by manufacturing risk-free debt, then it cannot insure taxpayers against permanent macro-economic shocks...

Antje Berndt, Darrell Duffie, Yichao Zhu
July 23, 2020

This note presents a preliminary approach to the design of an across-the-curve credit spread index (AXI). The index is a measure of the recent average cost of wholesale unsecured debt funding for publicly listed...

Aruna Ranganathan
July 9, 2020

This paper uses ethnographic and interview data about four cases in two work settings in India to examine identification as a factor in workers’ reactions to workplace change. Novel technology and management practices are frequently...

Austin van Loon, Amir Goldberg, Sameer B. Srivastava
July 2020

What leads people to feel negatively about members of other social groups? While recent work has mostly focused on the strength of group identity, we propose that perceptions of intergroup difference, and the animus they...

Vladimir Asriyan, Dana Foarta, Victoria Vanasco
July 2020

We study the joint determination of product quality and complexity in a rational setting. We introduce a novel notion of complexity, which affects how costly it is for an agent to acquire information about product...

Dirk Bergemann, Francisco Castro, Gabriel Weintraub
June 30, 2020

We compare the revenue of the optimal third-degree price discrimination policy against a uniform pricing policy. A uniform pricing policy offers the same price to all segments of the market. Our main result establishes that...

Darrell Duffie, Samuel Antill
June 16, 2020

We explain how the common practice of size-discovery trade detracts from overall financial market efficiency. At each of a series of size-discovery sessions, traders report their desired trades, generating allocations of the asset and cash...

Ramesh Johari, Hannah Li, Gabriel Weintraub
June 16, 2020

We develop an analytical framework to study experimental design in two-sided platforms. In the settings we consider, customers rent listings; rented listings are occupied for some amount of time, then become available. Platforms typically use...

Bar Light, Gabriel Weintraub
June 4, 2020

The standard solution concept for stochastic games is Markov perfect equilibrium (MPE); however, its computation becomes intractable as the number of players increases. Instead, we consider mean field equilibrium (MFE) that has been popularized in...

Arvind Krishnamurthy, Markus Brunnermeier
June 2020
Zhengyang Jiang, Arvind Krishnamurthy, Hanno Lustig
June 2020

We develop a theory that links the U.S. dollar’s valuation in FX markets to foreign investors’ demand for U.S. safe assets. When the convenience yield that foreign investors derive from holding U.S. safe assets increases,...

Kostas Bimpikis, Yiangos Papanastasiou, Wenchang Zhang
June 2020

While information design has gained significant attention in the recent literature as a tool for shaping consumers’ purchase behavior, little is known about its use and implications in two-sided marketplaces, where both supply and demand...

Eduardo Davila, Benjamin Hébert
June 2020

This paper studies the optimal design of corporate taxes when firms are financially constrained. We identify a corporate taxation principle: taxes should be levied on unconstrained firms,