The Same Old Song
When Spotify went public earlier this year, the company faced a $1.6 billion lawsuit alleging that it was streaming such hits as Tom Petty’s “Free Fallin’,” the Doors’ “Light My [...]
Policy News and Stock Market Volatility
We create a newspaper-based Equity Market Volatility (EMV) tracker that moves with the VIX and with the realized volatility of returns on the S&P 500. Parsing the underlying text, we [...]
Prone to Fail: The Pre-Crisis Financial System
In this essay, I will review the key sources of fragility in the core financial system. The first section focuses on the weakly supervised balance sheets of the largest banks [...]
Risky Bank Guarantees
Applying standard portfolio-sort techniques to bank asset returns for 15 countries from 2004 to 2018, we uncover a risk premium associated with implicit government guarantees. This risk premium is intimately [...]
A Shortage of Short Sales: Explaining the Underutilization of a Foreclosure Alternative
The Great Recession led to widespread mortgage defaults, with borrowers resorting to both foreclosures and short sales to resolve their defaults. I first quantify the economic impact of foreclosures relative [...]
Capitalization as a Two-Part Tariff: The Role of Zoning
This paper shows that the capitalization of local amenities is effectively priced into land via a two-part pricing formula: a “ticket” price paid regardless of the amount of housing service [...]
Monetary policy, macroprudential policy, and financial stability
Various factors have been advanced as possible causes of the build-up of risks leading to the Global Crisis, and multiple policies have been put forward to address them. This column [...]
The Total Risk Premium Puzzle
The risk premium puzzle is worse than you think. Using a new database for the U.S. and 15 other advanced economies from 1870 to the present that includes housing as [...]
Balancing the “Zoning Budget”
The politics of urban land use frustrate even the best intentions. A number of cities have made strong political commitments to increasing their local housing supply in the face of [...]
Four Facts Concerning Competition in U.S. Generic Prescription Drug Markets
We establish four facts concerning competition among U.S. generic drug suppliers, using IQVIA’s National Sales Perspective™ 2004Q4 – 2016Q3 data. We define a unique product market (“molform”), consisting of the [...]