Fiscal Capacity: An Asset Pricing Perspective
LOLR Policies, Banks' Borrowing Capacities and Funding Structures
We investigate banks' benefits and costs of having access to LOLR. Integrating novel data sets we estimate the borrowing capacities of euro area banks at the ECB. Controlling for ratings, we find that banks with more fragile funding are likely to borrow more from the ECB during the great financial and euro area sovereign debt crises. We develop a dynamic model of a bank and calibrate it to our empirical estimates. A bank with access to LOLR has higher equity value and makes larger investments in new loans, but it is more leveraged, pays more dividends and issues less equity.
The More You Ask, the Less You Get: When Additional Questions Hurt External Validity
Researchers and practitioners in marketing, economics, and public policy often use preference elicitation tasks to forecast realworld behaviors. These tasks typically ask a series of similarly structured questions.
Thompson Sampling with Information Relaxation Penalties
We consider a finite-horizon multi-armed bandit (MAB) problem in a Bayesian setting, for which we propose an information relaxation sampling framework. With this framework, we define an intuitive family of control policies that include Thompson sampling (TS) and the Bayesian optimal policy as endpoints. Analogous to TS, which, at each decision epoch pulls an arm that is best with respect to the randomly sampled parameters, our algorithms sample entire future reward realizations and take the corresponding best action.
Working From Home and the Office Real Estate apocalypse
The authors thank Jonas Peeters, Neel Shah, and Luofeng Zhou for excellent research assistance and CompStak for generously providing data for academic research. We would like to thank Chen Zheng (discussant), Cameron LaPoint (discussant) and seminar participants at AREUEA (DC), AREUEA International (Dublin), the USC Macro-Finance Conference, the Chinese University of Hong Kong finance seminar, National University of Singapore, Columbia Business School finance seminar, and the Urban Economics Association Conference (DC).
Diminishing Treasury Convenience Premiums: Effects of Dealers’ Excess Demand and Balance Sheet Constraints
After the global financial crisis, the yields of U.S. Treasury bills frequently exceed other risk-free rate benchmarks, thereby pointing to a diminishing convenience premium. Constructing a new measure of dealers’ balance sheet constraints for providing intermediation in U.S. Treasury markets, we trace these diminishing convenience premiums to primary dealers’ ability to act as intermediaries.
Office Real Estate as a Hedge against Inflation and the Impact of Lease Contracts
This article analyzes the hedging potential of real estate and especially looks at the impact of lease contracts in various countries around the world on the inflation hedge capability for both expected and unexpected inflation. The dataset consists of direct real estate rent and capital value data for 59 cities/MSAs in 25 countries between 1991 and 2020 to make international comparison over a long time period possible. The results indicate that real estate is a good hedge against inflation, and especially against unexpected inflation.
Regional personality differences predict variation in COVID-19 infections and social distancing behavior
The early stages of the COVID-19 pandemic revealed stark regional variation in the spread of the virus. While previous research has highlighted the impact of regional differences in sociodemographic and economic factors, we argue that regional differences in social and compliance behaviors-the very behaviors through which the virus is transmitted-are critical drivers of the spread of COVID-19, particularly in the early stages of the pandemic.
Using Social Media to Change Gender Norms: An Experimental Evaluation Within Facebook Messenger in India
This paper experimentally tests the effectiveness of two short edutainment campaigns (under 25 minutes) delivered through Facebook Messenger at reshaping gender norms and reducing social acceptability of violence against women (VAW) in India. Participants were randomly assigned to watch video-clips with implicit or explicit messaging formats (respectively a humorous fake reality TV drama or a docu-series with clear calls to action).
Green Moral Hazards
Moral hazards are ubiquitous. Green ones typically involve technological fixes: Environmentalists often see ‘technofixes’ as morally fraught because they absolve actors from taking more difficult steps toward systemic solutions. Carbon removal and especially solar geoengineering are only the latest example of such technologies. We here explore green moral hazards throughout American history. We argue that dismissing (solar) geoengineering on moral hazard grounds is often unproductive.
Your Family Business Needs a Board
A board should be at the helm of any family business, steering the business in the right direction. If you wish to have a business that is resilient and has a positive impact on all stakeholders (e.g., employees, customers, vendors, and society) you must make sure your board is intact and functioning optimally. This article offers some questions to consider as you develop best practices for your own board, such as who should be on the board, whether you need an independent director, and how often your board should meet.
Identifying Factors Predicting Kidney Graft Survival in Chile Using Elastic-Net-Regularized Cox Regression
We developed a predictive statistical model to identify donor–recipient characteristics related to kidney graft survival in the Chilean population. Given the large number of potential predictors relative to the sample size, we implemented an automated variable selection mechanism that could be revised in future studies as more national data is collected. Materials and Methods: A retrospective multicenter study was conducted to analyze data from 822 adult kidney transplant recipients from adult donors between 1998 and 2018.