Working Papers

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…

It remains a continuing challenge for companies worldwide to reliably assess the greenhouse gas emissions incurred in connection with their operations. Here we argue that financial accounting offers an architectural template for corporate carbon…

Governments worldwide have recently launched policy support programs for hydrogen, where the level of support is to be tied to the carbon intensity of the hydrogen produced. Here we analyze the impact of alternative accounting rules for assessing…

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…

Populism has been on the rise, posing a threat to liberal democracy. Existing evidence suggests that globalization, economic shocks, and concerns over cultural change increase support for populist agendas. Yet less is known about interventions…

We show how to measure the welfare effects arising from increased data availability. When lenders have more data on prospective borrower costs, they can charge prices that are more aligned with these costs. This increases total social welfare and…

As LLMs become the default interface for search, news, and everyday problem-solving, they may filter and frame political information before citizens ever confront it. Identifying and mitigating partisan “bias”—output with a systematic slant…

This paper provides early evidence on the integration and impact of Generative Artificial Intelligence (AI) in accounting at the accountant and task levels. Using a multi-method approach, we first identify heterogeneous adoption patterns,…

We develop a rational, non-behavioral framework in which analysts use empirical Bayesian techniques to construct their forecasts. Our approach assumes that analysts construct a single empirical prior by aggregating information across all of the…

A solution concept that is a refinement of Nash equilibria selects for each finite game a nonempty collection of closed and connected subsets of Nash equilibria as solutions. We impose three axioms for such solution concepts. The axiom of…

Companies across industries face increasing pressure to assess the costs of decarbonizing their operations. This paper develops a generic model for constructing abatement cost curves in connection with carbon dioxide emissions. The resulting…

Artists and policy makers are concerned that Generative Artificial Intelligence (GenAI) may lead to disappearance of non-GenAI content. In this paper we study the implications of GenAI for the production and consumption of creative goods; such as…

Converting public information into stock picks is unlikely to be costless, yet the magnitude of public information processing costs is unknown. We quantify extra-marginal information costs for mutual fund managers by building an “AI analyst” that…

Individuals frequently perceive a tradeoff between health and taste, leading to poor dietary choices. This research identifies a novel pathway to healthier eating by harmonizing seemingly conflicting goals: seeking beauty in food. Across seven…