America’s Silent Crisis
Preservation of our financial stability and military dominance is on the line, and it depends on getting our debt problem under control, says Professor Pierre Yared.
Preservation of our financial stability and military dominance is on the line, and it depends on getting our debt problem under control, says Professor Pierre Yared.
Adapted from “Global Value Chains in Developing Countries: A Relational Perspective from Coffee and Garments,” by Laura Boudreau of Columbia Business School, Julia Cajal Grossi of the Geneva Graduate Institute, and Rocco Macchiavello of the London School of Economics.
Work Breaks Don't Signal Career Brakes: Lee Georgs ’03
David is a Managing Partner with Health Enterprise Partners having joined the firm 16 years ago. Previously he was a Vice President for Susquehanna Growth Equity, a private equity group focused on growth stage technology companies. He was formerly the President and Chief Operating Officer of Onward Healthcare, Inc., a Welsh, Carson, Anderson & Stowe portfolio company. Prior to Onward, Dave was an Executive Vice President of Pinnacor, Inc., a General Atlantic portfolio company, which went public.
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.
Jay Dahya's primary areas of expertise are corporate finance, mergers and acquisitions, corporate governance, corporate valuation, and international financial markets. He has taught finance at the undergraduate, MBA, EMBA, and PhD level, and is the recipient of several teaching awards for his efforts in the classroom. His research has been published in leading finance journals including the Journal of Finance, Journal of Financial Economics, and Journal of Financial and Quantitative Analysis, among others.
Charles W. Calomiris is Henry Kaufman Professor Emeritus of Financial Institutions in the Faculty of Business and Professor Emeritus of International and Public Affairs at Columbia Business School, Director of the Business School’s Program for Financial Studies Initiative on Finance and Growth in Emerging Markets, and a professor at Columbia’s School of International and Public Affairs. His research spans the areas of banking, corporate finance, financial history, and monetary economics.
Daniel Wolfenzon is the Nomura Professor of International Finance at Columbia Business School. He received a Masters and a PhD in economics from Harvard University and holds a BS in economics and a BS in mechanical engineering from MIT. Professor Wolfenzon previously taught at the University of Michigan, the University of Chicago and NYU. He is also a Faculty Research Fellow at the National Bureau of Economic Research. His research interests are in corporate finance and organizational economics.
Shiva Rajgopal is the Roy Bernard Kester and T.W. Byrnes Professor of Accounting and Auditing at Columbia Business School. He has also been a faculty member at the Duke University, Emory University and the University of Washington. Professor Rajgopal’s research interests span financial reporting, earnings quality, fraud, executive compensation and corporate culture. His research is frequently cited in the popular press, including The Wall Street Journal, The New York Times, Bloomberg, Fortune, Forbes, Financial Times, Business Week, and the Economist.
Lawrence R. Glosten is the S. Sloan Colt Professor of Banking and International Finance at Columbia Business School. He is also co-director (with Merritt Fox and Ed Greene) of the Program in the Law and Economics of Capital Markets at Columbia Law School and Columbia Business School and is an adjunct faculty member at the Law School. He has been at Columbia since 1989, before which he taught at the Kellogg Graduate School of Management at Northwestern University, and has held visiting appointments at the University of Chicago and the University of Minnesota.
Michael Ewens is the David L. and Elsie M. Dodd Professor of Finance and co-director of the Private Equity Program. He is also a Research Associate at the National Bureau of Economic Research (NBER), Associate Editor of the Journal of Financial Economics, Associate Editor at the Review of Financial Studies, Associate Editor at Management Science, Associate Editor at the Journal of Corporate Finance, and co-editor of the Journal of Economics & Management Strategy. He received a Ph.D.
Professor Olivier Darmouni is a financial economist whose research interests span corporate finance, banking and industrial organization. He applies a variety of empirical methods to understand how frictions, in particular asymmetric information, affect credit markets. Prior to joining Columbia, Olivier graduated from a PhD in Economics from Princeton University.
Owen is a General Partner at Contour Venture Partners and previously from 2008 to 2016 was the Managing Director of NYC Seed, a very early seed stage venture capital fund in New York City. He also founded the NYC Seedstart accelerator and Overlap, an artificial intelligence software company for scheduling.
Matthias Breuer is an Associate Professor of Business in the Accounting Division of Columbia University’s Graduate School of Business. In his research, he examines issues of corporate transparency and information verification, with a particular focus on the role of regulation in addressing corporate information issues. His research has been recognized with multiple awards (e.g., the 2019 and 2021 Best Paper Awards of the American Accounting Association’s FARS Midyear Meetings), presented at leading universities and conferences, and published in reputable journals (e.g., the
Professor Parinitha (Pari) Sastry is an assistant professor of finance at Columbia Business School. Her research focuses on climate change, financial intermediation, and real-estate markets. She received her B.A. from Columbia University and her finance Ph.D. from the Massachusetts Institute of Technology. She has worked previously at the Department of Treasury, Task Force on Climate-Related Financial Disclosures, Brookings Institution, and New York Fed.
Earnings management involves actions by managers to influence reported financial results, often to present a more favorable view of company performance. In this chapter, we discuss the tools available to managers for earnings management. We first consider manipulation of net income through accruals and real earnings management. Then, we disaggregate earnings management along the income statement, comparing manipulation of revenue, expenses, and gains and losses.
We examine the relationship between stock return sensitivities to interest rate changes (interest rate sensitivities) and firm growth. A discounted cash flow method implies a negative association between interest rate sensitivities and growth expectations because, all else equal, the present value of distant cash flows declines more sharply than that of near-term cash flows when interest rates rise.
The government budget constraint ties the market value of government debt to the expected present discounted value of fiscal surpluses. We find evidence that U.S. Treasury investors fail to impose this no‐arbitrage restriction in the United States. Both cyclical and long‐run dynamics of tax revenues and government spending make the surplus claim risky. In a realistic asset pricing model, this risk in surpluses creates a large gap between the market value of debt and its fundamental value, the PDV of surpluses, suggesting that U.S. Treasuries may be overpriced.
How should an investor value financial data? The answer is complicated because it depends on the characteristics of all investors. We develop a sufficient statistics approach that uses equilibrium asset return moments to summarize all relevant information
about others’ characteristics. It can value data that is public or private, about one or many assets, relevant for dividends or for sentiment. While different data types, of course, have different valuations, heterogeneous investors also value the same data
Big data technologies change the way in which data and human labor combine to create knowledge. Is this a modest technological advance or a data revolution? Using hiring and wage data, we show how to estimate firms' data stocks and the shape of their knowledge production functions. Knowing how much production functions have changed informs us about the likely long-run changes in output, in factor shares, and in the distribution of income, due to the new, big data technologies.
Under standard assumptions, individuals and the government are indifferent between traditional tax-deferred retirement accounts and “front-loaded” (Roth) accounts. Adding investment fees to this benchmark, individuals are still indifferent but the government is not. We show that under weak conditions firms charge equal percent fees under both systems, yielding higher dollar fees under Traditional. We estimate that tax deferral increases demand for asset management services by $3.8 trillion, costing the government $23.4 billion in annual fees.
We propose a tractable model of dynamic investment, spinoffs, financing, and risk management for a multi-division firm facing costly external finance. Our analysis formalizes
We propose a theory of banking in which banks cannot perfectly control deposit flows. Facing uninsurable loan and deposit shocks, banks dynamically manage lending, wholesale funding, deposits, and equity. Deposits create value by lowering funding costs. However, when the bank is undercapitalized and at risk of breaching leverage requirements, the marginal value of deposits can turn negative as deposit inflows, by raising leverage, increase the likelihood of costly equity issuance.
ASC 842, which requires balance sheet recognition of right-of-use (ROU) lease assets, resulted in a large increase in reported assets since 2019, thus impairing the time-series consistency of metrics that use assets (e.g., asset turnover). This paper shows that ROU assets can be estimated quite precisely using lease disclosure. Adding the estimated ROU asset for pre-ASC 842 observations substantially improves the ability of operating assets to explain sales. It also increases the ability of growth in operating assets to predict sales growth and explain analysts’ revenue growth forecasts.