A large literature in macroeconomics argues that general equilibrium effects matter for the transmission of fiscal policy shocks. For example, government spending or taxation changes (fiscal policy) have been shown to spill over through channels such as production factor (labor, capital, etc.) reallocation, output and input price changes, household consumption and saving responses, and monetary… Read More »
Do the recently mandated human capital disclosures (HCDs) have value implications for asset prices, and if so, do they affect shareholders and debtholders in the same way? Our recent study examines the information content of newly mandated HCDs for shareholders and debtholders. Importantly, we show that firms’ HCDs are not purely boilerplate and convey information… Read More »
Over the past few decades, there has been growing concern that corporations are increasingly exerting their influence on government policymaking. The discourse in this area, both within the political arena and academia, often focuses on domestic channels that firms use to influence policymaking. This includes channels such as lobbying, political contributions, and charitable giving. However,… Read More »
The meteoric rise in popularity of cryptocurrency in the investment sphere has generated significant challenges for the legal system. Since 2020, courts have been absorbing the litigation resulting from cryptocurrencies’ reputation as the next “hot investment,” as well as dealing with the litigious fallout from the previous cryptocurrency meltdown in 2018. As such, disputes arising… Read More »
Technology moves fast, and the law often struggles to keep up. This is particularly true in consumer finance, where new ways of constructing and delivering financial products and services can quickly outpace traditional regulatory frameworks. Indeed, the policy attention garnered by the financial technology (fintech) sector is largely focused on how best to regulate new… Read More »
Many of today’s most popular firms are selling products that exhibit network effects; that is, the value created by the product increases with the number of users adopting it. Examples include social media platforms (e.g., Twitter and LinkedIn), information technology providers (e.g., Apple and Huawei), and video game companies. Firms selling these network products can… Read More »
In my recent paper, I study whether and how private equity (PE) fund investors (hereafter general partners or GPs) manipulate their fund performance during fundraising periods. Recent studies (i) have found abnormally high PE fund valuations during fundraising periods and (ii) have debated (but have not settled) whether these valuations reflect manipulating the existing funds’… Read More »
Municipal bonds are the primary source of financing for local governments, with the value of outstanding municipal bonds reaching $4.1 trillion as of March 2022. Historically, the default rate of these bonds has been very low. This raises the question of why so many municipal bonds have different issuance costs (yield spread), even with similar… Read More »
Since William Nordhaus published his seminal work in 1994, economists have coalesced around the need to implement carbon taxes to address the negative externalities of greenhouse gas emissions on temperatures. Under this paradigm, properly designed carbon taxes induce firms to internalize the cost to society of their emissions, thereby restoring the socially optimal allocation. In… Read More »
Regulatory oversight is important for safeguarding investors’ interests and ensuring the efficient functioning of financial markets. However, oversight can sometimes fail due to extraordinary factors such as resource constraints and political connections. Our recent study shows that oversight failure can also occur because of reduced productivity of regulators due to severe fine particulate matter air… Read More »
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