Our primary faculty research groups are focused in our five core areas: applied microeconomics, econometrics, economic theory, finance, and macroeconomics. Our joint faculty includes experts from the Carey Business School and the School of Advanced International Studies.
Finance Group
Coverage includes: applied and theoretical finance, bankruptcy, corporate re-structuring, financial econometrics, financial regulation, fixed income securities, sovereign lending
- Faculty: Brendan Daley, Greg Duffee, Olivier Jeanne, Jonathan Wright
- Jointly Appointed Faculty: Alessandro Rebucci (Carey Business School)
- Undergraduate minor in financial economics offered in conjunction with the Center for Financial Economics
-
Diagnostic Business Cycles
A large psychology literature argues that, due to selective memory recall, decision-makers’ forecasts of the future are overly influenced by the perceived news. We adopt the diagnostic expectations (DE) paradigm [Bordalo et al. (2018), Journal of Finance, 73, 199–227] to capture this feature of belief formation, develop a method to incorporate DE in business cycle models,…
-
Designing Securities for Scrutiny
We investigate the effect of scrutiny (e.g., credit ratings, analyst reports, or mandatory disclosures) on the security design problem of a privately informed issuer. We show that scrutiny has important implications for both the form of security designed and the amount of inefficient retention of cash flows. The model predicts that issuers will design informationally…
-
Threats to Central Bank Independence: High-Frequency Identification with Twitter
A high-frequency approach is used to analyze the effects of President Trump’s tweets that criticize the Federal Reserve on financial markets. Identification exploits a short time window around the precise timestamp for each tweet. The average effect on the expected fed funds rate is negative and statistically significant, with the magnitude growing by horizon. The…
-
Due Diligence
We propose a model of due diligence and analyze its effect on prices, payoffs, and deal completion. In our model, if the seller accepts an offer, the winning bidder (or “acquirer”) can gather information and chooses when to complete the transaction. In equilibrium, the acquirer engages in “too much” due diligence. Our quantitative results suggest…
-
Market Power in Neoclassical Growth Models
This article examines the optimal accumulation of capital and the effects of government debt in neoclassical growth models in which firms have market power and therefore charge prices above marginal cost. In this environment, the real interest rate earned by savers is less than the net marginal product of capital. We establish a new method…