Interest Rates and Inflation: What’s Next for the Federal Reserve?
Professor Pierre Yared describes why the U.S. economy is unlikely to see an economic downturn comparable with the 1970s.
Professor Pierre Yared describes why the U.S. economy is unlikely to see an economic downturn comparable with the 1970s.
Tano Santos, the Robert Heilbrunn Professor of Asset Management and Finance and Director of Columbia Business School’s Heilbrunn Center for Graham and Dodd Investing, discusses the school’s approach to value investing and finance.
This paper studies systemic risk in the interbank market. We first establish that in the German interbank lending market, a few large banks intermediate funding flows between many smaller periphery banks. We then develop a network model in which banks trade off the costs and benefits of link formation to explain these patterns. The model is structurally estimated using banks' preferences as revealed by the observed network structure before the 2008 financial crisis.
We demonstrate a novel link between relationship-specific investments and risk in a setting where division managers operate under moral hazard and collaborate on joint projects. Specific investments increase efficiency at the margin. This expands the scale of operations and thereby adds to the compensation risk borne by the managers. Accounting for this investment/risk link overturns key findings from prior incomplete contracting studies.
Bank bond portfolios remained deeply underwater in the fourth quarter of 2022, reducing banks' access to liquidity in the first quarter when deposits became far more precious.
Todd Baker is a financial services executive whose career has led him from corporate law to C-suite strategic business leadership roles at several of the largest domestic and international banks and roles as an academic, consultant, writer, speaker and commentator on banking, financial technology, consumer financial access and regulation issues.
Brett House is Professor of Professional Practice in the Economics Division at Columbia Business School. His research and writing are focused on macroeconomics and international finance, with interests in fiscal issues, monetary policy, international trade, financial crises, and debt markets. His work has been published in peer-reviewed journals and international media.
Yiming Ma is an Associate Professor in the Finance Division at Columbia Business School. She received her Ph.D. in Finance from the Stanford Graduate School of Business in 2018 and a B.A. in Economics & Mathematical and Global Affairs from Yale University in 2013.
Karl Mergenthaler, CFA is an Executive Director in the J.P. Morgan Investment Analytics & Consulting Group. His principal responsibility is to provide analytical and consulting services to pension funds and other institutional investors. Karl has more than 14 years of experience in the financial services industry. Prior to joining J.P. Morgan in 2007, Karl was an equity analyst and portfolio manager at Avatar Associates, where he was actively involved in the management of portfolios of Exchange Traded Funds (ETFs).
Mark A. Zurack teaches Capital Markets and Investments, Equity Derivatives and Equity Markets and Products at Columbia Business School. Mark is currently on the Board of Directors of the Binghamton University Foundation and also serves on the Boards of the Alzheimer's Association, Teach For America, Upper West Success Academy, ETC, Southampton Bath and Tennis and the Columbia Business School Social Enterprise Program. Prior to coming to Columbia, Professor Zurack worked at Goldman Sachs for 18 years. He joined GS in 1983 and started the equity derivatives research group.
Aamir A. Rehman is a Senior Fellow at the Richard Paul Richman Center for Business, Law, and Public Policy at Columbia University. His contributions to the Center focus on investors’ ESG considerations and the public aspects of private investments.
Harry Mamaysky is a Professor of Professional Practice at Columbia Business School, where he serves as the Director of the Program for Financial Studies. He is also on the Steering Committee of the Columbia-IBM Center for Blockchain and Technology. Harry teaches capital markets and asset pricing to MBA, Masters and PhD students, as well as Executive Education courses on the use of text data in finance, and on corporate bonds. He has consulted for a quantitative investment firm and for a nationally recognized statistical rating organization.
Professor Nissim earned his PhD in Accounting at the University of California, Berkeley, and joined Columbia Business School in 1997. He was granted tenure in 2005, and full professorship in 2007. He served as the Chair of the Accounting Division during the years 2006–2009 and 2014–2016.
Professor Jian Li joined Columbia Business School in 2021. She graduated with a PhD from the Joint Program of Financial Economics at the University of Chicago. Her research interest lies at the intersection of macroeconomics and finance. She is particularly interested in how financial intermediaries affect the real economy and how different types of financial institutions can contribute to financial instability.
Matthew Dell Orfano is a Senior member at Discovery Capital, focusing globally on multiple sectors, thematic trade construction, and special situations, in addition to managing their data efforts. He is responsible for individual positions and the internal thematically driven portfolio, which assimilates bottoms-up analysis and macro thematic from over 55 countries into actionable insights.
Kairong Xiao is Roger F. Murray Associate Professor of Business at Columbia Business School. His research interests span financial intermediation, corporate finance, monetary economics, industrial organization, and political economy.
For 29 years Michael has invested directly at the security level and indirectly as an asset allocator in traditional and alternative asset classes. He is a Managing Director, Head of Hedge Funds and Alternative Alpha, and on the Investment Committee at APG, a world leader in Environmental, Social and Governance Investing. Previously he was the Chief Investment Officer at MOV37 and Protege Partners.
This paper focuses on teaching the application of anthropology in business to marketing students. It begins with the premise that consumer marketers have long used ethnography as a component of their qualitative market research toolkit to inform their knowledge about and empathy for consumers. A question for market research educators who include ethnography in their curricula is if and how to teach the richness of anthropologically based approaches, especially given a decoupling of ethnographic method from anthropological theory in much consumer research practice.
Diversity initiatives are designed to help workers from disadvantaged backgrounds achieve equitable opportunities and outcomes in organizations. However, these programs are often ineffective. To better understand less-than-desired outcomes and the shifting diversity landscape, we synthesize literature on how corporate affirmative action programs became diversity initiatives and current literature on their effectiveness. We focus specifically on work dealing with mechanisms that make diversity initiatives effective as well as their unintended consequences.
As financial technology improves and data becomes more abundant, do market prices reflect this growing information and allocate capital more efficiently? While a number of recent studies have documented rises in aggregate price efficiency, we show that there are large cross-sectional differences. The previously-documented increases are driven by a rise in the informativeness of large, growth stocks. The informational efficiency of smaller assets' prices or prices of assets with less growth potential are either flat or declining.
By integrating the intersectional invisibility hypothesis with the behaviors from intergroup affect and stereotypes map framework, we examine the extent to which Black women’s dual-subordinated identities render them nonprototypical victims of discrimination, relative to White women and Black men, and the corresponding consequences.
We use supervisory loan-level data to document that small firms (SMEs) obtain shorter maturity credit lines than large firms, post more collateral, have higher utilization rates, and pay higher spreads. We rationalize these facts as the equilibrium outcome of a trade-off between lender commitment and discretion. Using the COVID recession, we test the prediction that SMEs are subject to greater lender discretion. Consistent with this hypothesis, SMEs did not draw down whereas large firms did, even in response to similar demand shocks.
We examine the ability of existing and new factor models to explain the comovements of G10-currency changes. Extant currency factors include the carry, volatility, value, and momentum factors. Using a new clustering technique, we find a clear two-block structure in currency comovements with the first block containing mostly the dollar currencies, and the other the European currencies.
We consider optimal government debt maturity in a deterministic economy in which the government can issue any arbitrary debt maturity structure and in which bond prices are a function of the government's current and future primary surpluses. The government sequentially chooses policy, taking into account how current choices - which impacts future policy -- feed back into current bond prices. We show that issuing consols constitutes the unique stationary optimal debt portfolio, as it boosts government credibility to future policy and reduces the debtfinancing costs.
Lenders (loan originators) frequently sell the right to service loans to other intermediaries (loan servicers). It is loan servicers rather than originators who are responsible for resolving borrowers’ financial distress. They are also required to make payment advances to investors on behalf of delinquent borrowers until the distress resolution process is complete. We begin with the observation that at the start of the COVID-19 pandemic, shadow banks— nondepository financial institutions—serviced approximately half of the total mortgage debt in the United States (Cherry et al.