Margins as Canaries in the Coal Mine
Central clearing counterparties (CCPs) manage counterparty risk by requiring clearing members to post margins. This paper explores the role of margins...
How Reform Happens
What determines whether and how regulations are reformed? We use a newly constructed data set of 3,590 successful and failed regulatory reforms in 189...
Shareholder Empowerment and Ownership Structure in a Free-Contracting Environment
We study how firms choose to allocate control over strategic corporate decisions between shareholders and management in a historical setting where...
Price discovery with a richer market microstructure noise
We show that the standard econometric framework typically yields inconsistent estimates of price discovery measures in the presence of richer market...
Time-varying price discovery
We formulate a price discovery model in which the price discovery measures vary either locally, say, for instance, at intervals of 30 minutes or at a...
Biased Promotions
We present a model of biased promotions in which firm size, wages, and internal labor markets are endogenously determined in a competitive labor...
Government Arrears and Corporate Policies: Lessons from a Natural Experiment
We study how late payment in public procurement affects corporate policies by analyzing a public program that unexpectedly repaid local government...
Memory and Trading
I test the predictions of human memory models in a high-stakes trading environment. Using alphabetical rankings of stocks from portfolio statements, I...
The Co-Pricing Factor Zoo
We analyze 18 quadrillion models for the joint pricing of corporate bond and stock returns. Strikingly, we find that equity and nontradable factors...
Debt and Deficits: Fiscal Analysis with Stationary Ratios
We introduce a measure of a government’s fiscal position that exploits cointegrating relationships among fiscal variables. The measure is a loglinear...
The paradox of perfect supervision
Each financial crisis brings more financial supervision, more models and larger buffers – but still fragility persists. The paradox of perfect...
Research highlight
The Structure of Leveraged Buyouts and the Free-Rider Problem
The Review of Financial Studies, hhaf111
The Drivers and Implications of Retail Margin Trading
Using granular data covering both regulated (brokerage-financed) and unregulated (shadowfinanced) margin accounts in China, we provide novel evidence...
How financial authorities best respond to AI challenges
Artificial intelligence is transforming finance faster than the authorities can adapt. This column argues that while AI enhances the financial system...
Relative Basis and the Expected Returns of Commodity Futures
We propose a novel measure, dubbed “relative basis,” to better capture the commodity convenience yield. Our measure is the difference between the...
