Liquidity and Governance
Is greater trading liquidity good or bad for corporate governance? We address this question both theoretically and empirically. We solve a model consisting of an optimal IPO followed by a [...]
Reducing Moral Hazard in Employment Relationships: Experimental Evidence on Managerial Control and Performance Pay
Moral hazard is endemic to employment relationships and firms often use performance pay and managerial control to address this problem. While performance pay has received much empirical attention, managerial control [...]
Financial derivatives, opacity, and crash risk: Evidence from large US banks
We test how the use of financial derivatives affects banks’ informational structure and future stock performance based on a sample of large bank holding companies in the US. Using banks’ [...]
Is more finance better? Disentangling intermediation and size effects of financial systems
Financial systems all over the world have grown dramatically over recent decades. But is more finance necessarily better? And what concept of financial system – a focus on its size, [...]
Financial liberalization and bank risk-taking: International evidence
Our results indicate that financial liberalization increases bank risk-taking in both developed and developing countries but through different channels. Financial liberalization promotes stronger bank competition that increases risk-taking incentives in [...]
Quantifying the Lasting Harm to the U.S. Economy from the Financial Crisis
The financial crisis and ensuing Great Recession left the U.S. economy in an injured state. In 2013, output was 13 percent below its trend path from 1990 through 2007. Part [...]
Recovery from Financial Crises: Evidence from 100 Episodes
We examine the evolution of real per capita GDP around 100 systemic banking crises. Part of the costs of these crises owes to the protracted nature of recovery. On average, [...]
Profits Without Prosperity
Five years after the official end of the Great Recession, corporate profits are high, and the stock market is booming. Yet most Americans are not sharing in the recovery. While [...]
Long-Term Damage from the Great Recession in OECD Countries
This paper estimates the long-term effects of the global recession of 2008-2009 on output in 23 countries. I measure these effects by comparing current estimates of potential output from the [...]
Investment Banks as Corporate Monitors in the Early 20th Century United States
We use the Clayton Antitrust Act of 1914 to study the effect of bankers on corporate boards in facilitating access to external finance. In the early twentieth century, securities underwriters [...]