Working Papers

We discuss the conditions under which global imbalances, such as China being a large foreign creditor and the United States being a large foreign debtor, might also generate power imbalances. We highlight possible theoretical channels and…

We study whether AI methods applied to large-scale portfolio holdings data can improve financial regulation. We build a state-of-the-art, graph-based deep learning model tailored to security-level data on the holdings of financial intermediaries…

We develop a unified theory of delegated capital management by extending the paradigm of Berk and Green (2004) from mutual funds to alternative assets. With competitive markets and rational investors, we derive the optimal contract and account…

We model the attorney-client relationship as a dynamic moral hazard problem where the client faces a difficult inference challenge. Clients learn about case quality by “learning from silence,” but silence is a noisy signal: it can mean the case…

This paper analyzes interactions between corporate governance and law enforcement practices, focusing on cases where deterrence is weak and harmful misconduct is profitable. We show how managerial compensation contracts, including stock-based…

We compute the cross-country transfers that result from unconventional monetary policy in the Eurozone. The ECB funds the expansion of its aggregate balance sheet mostly by issuing bank reserves and cash in core countries. The national central…

This paper studies expectations formation when the underlying process has fat tails. Using a large sample of firm sales growth expectations, we document three facts: (i) the relationship between forecast revisions and future forecast errors is…

Over the last half-century, economic growth stagnated but stock-market wealth boomed. I present evidence that declining innovation productivity reconciles these trends. At the macro level, I document that R&D spending has fallen relative to…

This paper studies whether households are selectively inattentive to interest rates and examines its macroeconomic implications. We first use existing and newly-designed household surveys to establish that households close to durables purchases…

Student loans with income-contingent repayment insure borrowers against income risk but can reduce their incentives to earn more. Using a change in Australia’s income-contingent repayment schedule, I show that borrowers reduce their labor supply…

Sovereign debt yields have declined dramatically over the last half-century. Standard explanations, including aging populations and increases in asset demand from abroad, encounter difficulties when confronted with the full range of evidence. We…

Since the 2000s, U.S. public pension funds have actively shifted their risky investments away from public equities and toward alternative assets like private equity and hedge funds—some much more than others. We explore a range of possible…

Third-party litigation finance is an increasingly popular practice in commercial litigation. Despite calls for mandated disclosure, litigation funders are mostly anonymous to defendants, judges and juries. We first present an equilibrium model of…

We construct an international panel data set comprising three distinct yet plausible measures of government indebtedness: the debt-to-GDP, the interest-to-GDP, and the debt-to-equity ratios. Our analysis reveals that these measures yield…

Geoeconomics is the use of a country’s economic strength to exert influence on foreign entities to achieve geopolitical or economic goals. We discuss how concepts of power in the political science and economics literature can be used to guide…

What can we learn from the high-frequency responses in bond and currency markets to the recent tariff announcement about the status of the U.S. dollar as the global reserve currency? The dollar depreciated by 3.4% after April 4 in spite of rising…

Hegemonic powers, like the United States and China, exert influence on other countries by threatening the suspension or alteration of financial and trade relationships. Mechanisms that generate gains from integration, such as external economies…

We document the growth of retail options trading and provide evidence that retail investors are drawn to options by anticipated spikes in volatility. Retail investors purchase options in a concentrated fashion before earnings announcements,…

Geoeconomic pressure—the use of existing economic relationships by governments to achieve geopolitical or economic goals—is a prominent feature of global power dynamics. This paper introduces a methodology using large language models (LLMs) to…

We assess Euro Area financial integration correcting for the role of “onshore offshore financial centers” (OOFCs) within the currency union. The OOFCs of Luxembourg, Ireland, and the Netherlands serve dual roles as hubs of investment fund…