Faculty Research Groups | Finance

Corporate Cash Flow Outcomes Across Presidencies: Still a Presidential Puzzle

Feb 04 2025

Speaker: Kateryna Holland

Time: 12:00 PM - 1:00 PM

Location: Volanakis

Finance Brown Bag

Advertising Securities

Feb 26 2025

Speaker: Alexander Ljungqvist: Stockholm School of Economics

Time: 12:30 PM - 2:00 PM

Location: Volanakis

U.S. companies are prohibited from advertising their securities under Section 5 of the Securities Act of 1933. To investigate what might happen if issuers were allowed to market their securities to the public, we study Singapore, a jurisdiction that permits the use of advertising to solicit interest in initial public offerings (IPOs). Using proprietary data on a representative sample of individuals, we show that advertising strongly influences retail investors to apply. IPOs with weaker institutional demand are advertised more heavily to retail investors. Investors who are more responsive to advertising earn significantly lower risk-adjusted returns compared to other IPO investors. Overall, we provide new evidence on the costs and benefits of regulatory limitations placed on issuers of securities.

Revolving Credit to SMEs: The Role of Business Credit Cards

Mar 06 2025

Speaker: Greg Buchak: Stanford Graduate School of Business

Time: 12:15 PM - 1:45 PM

Location: Buchanan 151

We document that small businesses in the US are frequently excluded from borrowing through traditional term loans or credit lines and rely instead on standardized, high-interest rate business credit cards to meet their financing needs. We develop and estimate a structural model of firms’ card demand, utilization, and default choice, accounting for imperfect competition among lenders and the correlation between utilization and default. We find that high rates are primarily explained by markups rather than lender costs. In counterfactual analyses we study the impact of correlated lender cost shocks as well as proposed capital surcharges on undrawn credit limits.

Artificial Intelligence and the Labor Market

Apr 02 2025

Speaker: Lawrence Schmidt: MIT

Time: 12:30 PM - 2:00 PM

Location: Volanakis

We leverage recent advances in NLP to construct measures of workers’ task exposure to AI and machine learning technologies over the 2010 to 2023 period, varying across firms and time. Using a theoretical framework that allows for labor-saving technology to affect worker productivity both directly and indirectly, we show that the impact on wage earnings and employment can be summarized by two statistics. First, labor demand decreases in the average exposure of workers’ tasks to AI technologies; second, holding the average exposure constant, labor demand increases in the dispersion of task exposures to AI as workers shift effort to tasks not displaced by AI. Exploiting exogenous variation in our measures based on pre-existing hiring practices across firms, we find empirical support for these predictions, together with a lower demand for skills affected by AI. Overall, we find muted effects of AI on employment due to offsetting effects: occupations high exposed to AI experience relatively lower demand compared to less exposed occupations, but the resulting increase in firm productivity increases overall employment across all occupations.

The Power of the Common Task Framework

Apr 09 2025

Speaker: Theis Jensen: Yale University

Time: 12:30 PM - 2:00 PM

Location: Volanakis

The “Common Task Framework” (CTF) is a collaborative and competitive process in which researchers solve a task using shared data, a predefined success metric, and a leaderboard. Using an economic model, we show that the CTF incentivizes effort, increases innovation, and curbs misrepresentation by reducing research costs and improving comparability. Historical examples from computer science underscore its effectiveness. To demonstrate its broader applicability, we propose a CTF for financial economics: a platform open to all researchers designed to identify the pricing kernel and systematically evaluate asset pricing models, from traditional factor-based approaches to modern machine learning techniques.

Common Investors Across the Capital Structure: Private Debt Funds as Dual Holders

Apr 30 2025

Speaker: Isil Erel: Ohio State University Fisher College of Business

Time: 12:30 PM - 2:00 PM

Location: Volanakis

This paper examines the dual role of Business Development Companies (BDCs) as both creditors and shareholders in funding middle-market firms. We first show that BDCs, especially dual holders, serve a distinct market segment typically avoided by traditional bank lenders: mid-sized firms with low (or even negative) cash flows, limited collateral, but high growth potential. Our key finding is that dual-holder BDCs charge loan spreads that are 45 basis points higher than comparable loans extended by pure creditors, controlling for loan characteristics as well as (borrower × quarter) and (BDC × quarter) fixed effects, which account for unobserved and time-varying heterogeneity in both firm credit quality and lender funding conditions. We examine three mechanisms: enhanced monitoring through information access and governance rights of dual-holders; capital injections by dual-holders as a “public good” benefiting all creditors; and hold-up behavior by dual-holders as dominant financiers of their portfolio firms. Differentiating tests indicate that enhanced monitoring is the primary channel driving the loan pricing differential. Our study highlights the real economic impact of private credit, beyond merely filling gaps left by regulation- constrained banks.

The Welfare Benefits of Pay-As-You-Go Financing

May 07 2025

Speaker: David Sraer: UC Berkeley

Time: 12:30 PM - 2:00 PM

Location: Volanakis

Pay-as-you-go (PAYGo) financing is a novel contract that has recently become a popular form of credit, especially in low- and middle-income countries (LMICs). PAYGo financing relies on lockout technology that enables the lender to remotely disable the flow benefits of collateral when the borrower misses payments. This paper quantifies the welfare implications of PAYGo financing. We develop a dynamic structural model of consumers and estimate the model using a multi-arm, large scale pricing experiment conducted by a fintech lender that offers PAYGo financing for smartphones. We find that the welfare gains from access to PAYGo financing are equivalent to a 3.4% increase in income while remaining highly profitable for the lender. The welfare gains are larger for low-risk consumers and consumers in the middle of the income distribution. Under reasonable assumptions, PAYGo financing outperforms traditional secured loans for all but the riskiest consumers. We explore contract design and identify variations of the PAYGo contract that further improve welfare.

Security Losses, Interbank Markets, and Monetary Policy Transmission: Evidence from the Eurozone

May 14 2025

Speaker: Mariassunta Giannetti: Stockholm School of Economics

Time: 12:30 PM - 2:00 PM

Location: Volanakis

Banks that experienced larger losses in their pledgeable securities portfolios following the July 2022 monetary policy tightening became less able to borrow through the inter- bank market and subsequently reduced their corporate lending, regardless of whether the securities were booked at market or historical value. These effects were less pronounced for banks with abundant collateral and for domestic subsidiaries of banking groups, which received liquidity through their group’s internal capital market. Our results highlight a collateral channel in the bank-based transmission of monetary policy and show how differences in banking structure can contribute to an uneven transmission of monetary policy.

TBD

May 21 2025

Speaker: Constantine Yannelis: University of Chicago Booth School of Business

Time: 12:15 PM - 1:45 PM

Location: TBD

TBD

May 29 2025

Speaker: Christine Laudenbach: Goethe University, Leibniz Institute SAFE

Time: 12:15 PM - 1:45 PM

Location: Buchanan 151

The Debt Ceiling’s Disruptive Impact: Evidence from Many Markets

Sep 03 2025

Speaker: William Cassidy: Washington University Olin Business School

Time: 12:30 PM - 1:45 PM

Location: Volanakis

We show that the debt ceiling significantly impacts the duration of government liabilities through an unintended interaction of the Treasury’s issuance rules and the debt ceiling constraint. During debt ceiling episodes, the Treasury systematically allows more bills to mature than it issues. In recent years, this force has induced fluctuations in bill supply greater than one percent of GDP. Exploiting this, we devise an instrument for the supply of bills and show that the debt ceiling has distorted convenience premia and the price of short-term investment-grade corporate credit. We attribute the Treasury’s implicit decision to lengthen the duration of its liabilities as a response to an intermediation constraint.

The Effects of Cryptocurrency Wealth on Household Consumption

Sep 10 2025

Speaker: Tetyana Balyuk: Emory University

Time: 12:30 PM - 1:45 PM

Location: Volanakis

We use transaction-level bank and credit card data to examine how cryptocurrency wealth affects household consumption. We estimate a marginal propensity to consume (MPC) of 9.7% from crypto gains---roughly twice most previous estimates from unrealized equity gains. This higher MPC primarily reflects investor characteristics rather than asset type, as crypto investors also exhibit greater MPCs from equity gains. Consumption responses are symmetric for gains and losses and concentrated in discretionary spending. Our findings suggest that crypto wealth meaningfully influences the real economy, with households broadly treating crypto and equity wealth in similar ways.

Factor Investing with Delays

Sep 24 2025

Speaker: Yoshio Nozawa: University of Toronto

Time: 12:30 PM - 1:45 PM

Location: Volanakis

We present a tractable framework for evaluating the cost of delays induced by infrequent trading in the corporate bond market. Using 341 corporate bond factors from OpenBondAssetPricing.com and machine learning models trained on their underlying signals, we demonstrate that, before transaction costs, 51 factors outperform the bond market. However, this number drops to nearly zero after accounting for trading frictions because the cost of delay is amplified for highly profitable factors. Trading a subset of liquid bonds does not eliminate this cost because liquidity is hard to predict and sales delays cannot be avoided, underscoring the critical impact of delay costs.

A Tale of Two Anomalies: Value, Momentum, and Risk Sentiment

Oct 01 2025

Speaker: Alexei Zhdanov

Time: 12:30 PM - 1:45 PM

Location: Volanakis

We uncover a fundamental divide in how asset pricing anomalies respond to shifts in investor risk sentiment: build-up anomalies thrive in risk-off periods, while resolution anomalies collapse. Using momentum and value as representative cases, we show that value stocks and past losers experience sharp underperformance precisely when risk appetite deteriorates. Trading data offer an additional perspective: during risk-off episodes, retail investors flee value stocks, while short sellers double down, intensifying the drawdown. In contrast, momentum stocks evade similar selling pressure, reinforcing their resilience. Specifically, we distinguish between build-up and resolution anomalies, providing new evidence on the resilience of some anomalies in the face of deteriorating risk sentiment while others unravel. These differences in both returns and investor flows between anomaly types are difficult to coherently reconcile with a comprehensive theoretical explanation.

Treasury Auctions and Long-Term Bond Yields

Oct 06 2025

Speaker: Fabricius Somogyi: Northeastern University

Time: 1:15 PM - 2:15 PM

Location:

We study investor demand for Treasuries at auction. We document that from 1992 to 2010, global long-term bond markets have been positively surprised by demand at auctions of long-term US Treasuries. On average, global long-term yields have declined by 0.75 basis points per auction and these declines have been concentrated in auctions with strong investor demand. However, since 2010, this trend has reversed. Investor demand for Treasuries at auction has become more inelastic, while the supply of Treasuries has increased. This weaker demand for Treasuries has coincided with less foreign investor demand and a more illiquid secondary market.

Sustainable Investing in Practice: Objectives, Beliefs, and Limits to Impact

Oct 08 2025

Speaker: Dirk Jenter: London School of Economics

Time: 12:30 PM - 1:45 PM

Location: Volanakis

We survey 509 equity portfolio managers from both traditional and sustainable funds on whether, why, and how they consider firms’ environmental and social (“ES”) performance. ES performance influences stock selection, engagement, and voting for over three quarters of investors, including nearly two thirds of traditional ones. The primary motivation is financial, even among sustainable funds, with few willing to sacrifice financial returns for ES performance. A second driver is constraints, such as fund mandates, firmwide policies, and client wishes, which affect 72% of investors (62% from traditional funds). ES impact is seen as much less important, even for sustainable investors.

Data as a Networked Asset

Oct 10 2025

Speaker: Bo Bian: University of British Columbia

Time: 4:00 PM - 5:00 PM

Location: Zoom

Data is non-rival: a firm's customer data informs other firms about their customers. We uncover a network of inter-firm data conduits embedded in mobile applications. Data sharing induces comovement in firms' operational, financial, and stock-market performances, propagates shocks (e.g., cyberattacks), and induces herding in product design. Apple's privacy policy---a shock to inter-firm data flows---weakened these patterns. We develop a dynamic network model, where firms' performance and growth are interconnected through a data-sharing network. A network-augmented Gordon growth formula emerges for valuing data-generated cash flows. Our valuation metrics incorporate high-order and long-term spillovers and reveal systemically important firms.

Treasury Auctions and Long-Term Bond Yields

Oct 13 2025

Speaker: Fabricius Somogyi: Northeastern University

Time: 1:15 PM - 2:15 PM

Location:

We study investor demand for Treasuries at auction. We document that from 1992 to 2010, global long-term bond markets have been positively surprised by demand at auctions of long-term US Treasuries. On average, global long-term yields have declined by 0.75 basis points per auction and these declines have been concentrated in auctions with strong investor demand. However, since 2010, this trend has reversed. Investor demand for Treasuries at auction has become more inelastic, while the supply of Treasuries has increased. This weaker demand for Treasuries has coincided with less foreign investor demand and a more illiquid secondary market.

Hedging and Healing: How Business Cycle Exposure Affects the Safety Net

Oct 15 2025

Speaker: Xuelin Li: Columbia University

Time: 12:30 PM - 1:45 PM

Location: Volanakis

Tax exemption and government support are intended to insulate non-profit hospitals from business cycles, who are expected to provide stable community benefits. This paper documents erosion in the stability of this social safety net. The rising popularity of high-deductible health plans (HDHPs) reduces insurance risk sharing and increases the cyclicality of hospital operations. Hospital cash flows and utilization comove more strongly with local income shocks in high-HDHP areas. Claims data confirm that HDHP enrollees reduce inpatient visits in downturns, while hospitals cross-subsidize by raising prices for all patients. Over the longer run, hospitals hedge this risk by cutting staff, investment, uncompensated care, and Medicare admissions. Surprisingly, mission-driven non-profit hospitals hedge more aggressively, reflecting their lack of geographic diversification and internal capital markets compared to large for-profit systems.

TBD

Oct 16 2025

Speaker: Dominik Supera: Columbia University

Time: 12:15 PM - 1:45 PM

Location: Volanakis

TBD

Automation Under Constraints: Exchange Rates, Interest Rates, and Firm Investment

Oct 17 2025

Speaker: Meghana Ayyagari: George Washington

Time: 4:00 PM - 5:00 PM

Location: Zoom

A 33% depreciation of the yen from 2012–2015 made imported industrial robots cheaper for U.S. firms. Surprisingly, adoption surged among financially constrained firms - those with high leverage, low cash, or debt-constraint language in 10-Ks - while unconstrained firms barely responded. We rationalize this with a collateral model in which robots are pledgeable but also require non-pledgeable setup costs, so constrained firms face a higher effective cash “invoice” per robot and display stronger investment elasticities to both capital prices and borrowing rates. Using automation machinery import records, including robots, linked to Compustat, we find that constrained firms are about 1.5-1.7 × more responsive to exchange rate shocks and roughly 5 × more responsive to interest rate shocks than unconstrained firms. At the same time, exchange rate shocks have 2-9 × larger effects on automation adoption than interest rate shocks, underscoring that capital-input prices dominate borrowing conditions in shaping investment. Cross-sectional patterns are consistent with financing frictions, rather than risk or intangible setup costs, driving these differences. These results highlight a collateral channel through which macro shocks reallocate technology adoption toward constrained incumbents, with implications for diffusion, competitiveness, and inequality.

Collateralized Loan Obligations as Fire-Sale Insulation

Oct 22 2025

Speaker: William Diamond: University of Pennsylvania

Time: 12:30 PM - 1:45 PM

Location: Volanakis

We develop a model where CLOs are the optimal financial structure for securitizing assets that trade in illiquid markets. CLOs hold portfolios of risky loans, sell low-quality loans during crises, and finance themselves with safe, long-maturity debt. Banks that invest in CLOs’ safe debt are insulated from loan fire sales that could trigger a run if banks held risky loans directly. Unlike banks, CLOs with long-term financing can hold underperforming loans during a fire sale without triggering a run. Introducing CLOs to a bank-only financial system improves welfare and financial stability, but macroprudential regulation should also constrain CLOs’ leverage.

Long-Short Interest Rate Confusion

Oct 29 2025

Speaker: Chen Wang: University of Notre Dame Mendoza College of Business

Time: 12:30 PM - 1:45 PM

Location: Volanakis

We identify a common misconception that expected future changes in the policy rate predict corresponding future changes in long-term interest rates. People forecast similar shapes for the paths of policy and long rates over the next four quarters. This is a mistake because long rates should already incorporate public information about future policy rates and do not positively co-move with expected changes in policy rates. We show that this long-short rate confusion persists even among professional forecasters and distorts the real behavior of borrowers and investors. Our findings raise concerns about the efficacy of predictable monetary policy. When the central bank signals future policy rate increases, households and firms rush to lock in long-term debt before anticipated increases in long rates, undermining the intended contractionary effects of monetary tightening. These findings can help explain why forward guidance and gradual policy adjustment have often been less effective than standard macroeconomic models predict.

Mental Models and Financial Forecasts

Oct 31 2025

Speaker: Paul Decaire: Arizona State University

Time: 4:00 PM - 5:00 PM

Location: Zoom

We uncover financial professionals' mental models—the reasoning they use to explain their quantitative forecasts. We organize our analysis around a framework of top-down and bottom-up attention, where analysts endogenously choose both a valuation method and how to allocate attention across variables. Using the near-universe of 2.1 million equity analyst reports, we collect the valuation methods analysts adopt to compute their price targets. To measure attention, we then prompt large language models (LLMs) on a subset of over 300,000 reports to extract 11.8 million lines of reasoning—each combining a topic, valuation channel, time horizon, and sentiment. To validate the reliability of our output, we introduce a multi-step LLM prompting strategy and new diagnostic tools. We document five main findings. (1) Analysts exhibit sparse and rigid mental representations. (2) The choice of valuation methods and topic focus is closely linked. (3) Attention allocation across variables plays a bigger role than valuation methods in explaining both changes in valuations over time and disagreement across analysts. (4) Biases in analysts' forecasts are driven by over-reaction to firm-specific features and under-reaction to macro-related ones. (5) These biases translate into asset price patterns: topics analysts overreact (underreact) to predict lower (higher) realized returns.

Economic Representations

Nov 12 2025

Speaker: Suproteem Sarkar: University of Chicago

Time: 12:30 PM - 1:45 PM

Location: Volanakis

Valuations depend on how people categorize, perceive, or otherwise represent economic objects. This paper develops a measure of how the market represents firms, and uses this measure to study stock valuations. I train an algorithm to structure language from financial news into embeddings—vectors that quantify the economic features and themes in each firm’s news coverage. I show that a firm’s vector representation is informative of how the market perceives its business model. Representations explain cross-sectional variation in stock valuations, cash flow forecasts, and return correlations. Changes in representation help to explain changes in stock prices. Some changes in representations and prices are forecastable, and indicate that some of the explained variation in stock valuations stems from misperception. I find that misperception and misvaluation can intensify when a firm’s news coverage includes attention-drawing features—like “internet” in the late 1990s or “AI” in the early 2020s.

Testing for Discrimination in Menus

Nov 13 2025

Speaker: David Zhang: Rice

Time: 12:15 PM - 1:45 PM

Location: Volanakis

How should researchers test for differences in the menus of options that people face when given data on choices? In mortgage and labor contexts, we show how intuitively appealing regression-based approaches for assessing differences in menus can lead to misleading and contradictory results. To address this issue, we use pairwise dominance relationships in choices that can be supplemented by restrictions on the range of plausible menus to define (1) a test statistic for equality in menus and (2) a difference in menus (DIM) metric. We also derive a new procedure for inference on our class of problems. Finally, we apply our methodology to a novel data set linking 2018--2019 Home Mortgage Disclosure Act (HMDA) data to Optimal Blue rate locks. We find evidence for mortgage menu differences by race, particularly among Conforming mortgage borrowers who are relatively creditworthy.

What Does ChatGPT Make of Historical Stock Returns? Extrapolation and Miscalibration in LLM Stock Return Forecasts

Nov 19 2025

Speaker: Clifton Green: Emory University

Time: 12:30 PM - 1:45 PM

Location: Volanakis

We examine how large language models (LLMs) interpret historical stock returns and price charts when prompted to forecast short-horizon returns. While individual stock returns tend to reverse, LLM forecasts overextrapolate trends. Simulations show that extrapolation is stronger for less persistent series, similar to humans, and difficult to eliminate. LLM return forecasts are overoptimistic yet understate extreme upside returns, resulting in confidence intervals that are too narrow. When information is presented in prices rather than returns, expectations become more pessimistic. The findings suggest LLM forecasts exhibit patterns similar to human-like behavioral biases that are context-dependent and resist correction through prompt engineering.

Owner Culture and Pay Inequality within Firms

Nov 21 2025

Speaker: Jan Bena: UBC Sauder School of Business

Time: 4:00 PM - 5:00 PM

Location: Zoom

Using a comprehensive dataset of employee-employer-firm owner-immigration records in 2001-2017, we examine the impact of immigrant owners' national culture on within-firm pay inequality. Firms owned by immigrants from more individualistic countries have higher pay dispersion among employees. Individualism alone explains more than half of the variation in within-firm pay inequality across owners' countries in our sample. This result is robust across various empirical methods, including difference-in-differences analysis of ownership changes. Owners' individualism is associated with their employee compensation structures: more frequent and larger performance pay components—especially for highly educated employees, quicker promotions to high-paying positions, and less pay compression. These findings highlight the prominent role of culture in shaping pay practices and elucidate broader determinants of income inequality.

Financial Regulation and AI: A Faustian Bargain?

Dec 12 2025

Speaker: Christopher Clayton: Yale University

Time: 4:00 PM - 5:00 PM

Location: Zoom

How (Not) to Identify Demand Elasticities in Dynamic Asset Markets

Feb 18 2026

Speaker: Jules Van Binsbergen: University of Pennsylvania

Time: 12:30 PM - 2:00 PM

Location: Volanakis

We evaluate approaches to estimating demand elasticities in dynamic asset markets, both theoretically and empirically. We establish strict, necessary conditions that the dynamics of instrumented asset price variation must satisfy for valid identification. We illustrate these insights in a general equilibrium model of dynamic trade and derive the magnitude of biases that arise when these conditions are violated. Estimates based on static IO models are severely biased when the instrumented price variation is persistent or predictable. Empirically, we show that commonly used instruments yield elasticity estimates that are off by orders of magnitude, or even have the wrong sign. In contrast to standard multiplier calculations, our theory characterizes the dynamic asset market interventions required to sustain a given price path support process, with direct implications for policies such as Quantitative Easing (QE).

Go with the Flow: Debt Structure Changes and Monetary Policy Transmission

Mar 04 2026

Speaker: Greg Nini: Drexel

Time: 12:30 PM - 1:45 PM

Location: Volanakis

Fixed-income mutual fund flows have become a key driver of corporate debt structure. When loan funds receive more flows than bond funds, firms cater by shifting toward floating-rate loans over fixed-rate bonds. Using fund flows as an instrument, we show that exposure to floating-rate debt has a much larger effect on firms’ sensitivity to monetary policy than previous OLS estimates, accounting for about $1 trillion reduction in capital expenditures during the 2022-23 tightening cycle. We find evidence supporting financial accelerator mechanisms, particularly the effect of interest coverage constraints.

Prime Broker Credit Supply and the Stock Market: Evidence on Hedge Fund Transmission

Mar 24 2026

Speaker: Nicholas Zarra: Federal Reserve System

Time: 12:00 PM - 1:00 PM

Location: Volanakis

Broker-dealer factors predict equity returns despite broker-dealers holding relatively small equity positions. To address this tension, we document a conditional prime broker credit supply mechanism. Using confidential data on hedge fund-by-broker borrowing, we show that broker-dealer health transmits to equity prices through prime brokerage lending to hedge funds, but only when hedge funds' capacity to substitute across broker-dealers is impaired. When broker-dealer shocks are idiosyncratic, hedge funds substitute effectively, preventing transmission. However, when distress is widespread—as in the 2016 Q1 European broker-dealer distress episode—substitution is impaired as hedge funds cannot fully replace lost borrowing. This forced deleveraging has price impact with a multiplier of about three, meaning that if hedge funds, in net, sold off 1% of the total shares outstanding, the stock price falls 3%. Consistent with this mechanism, impaired substitution capacity amplifies the aggregate transmission of broker-dealer health to equity markets. This paper identifies an economic channel through which broker-dealers affect stock market prices without substantial direct ownership.

Organization capital, large startups, and the dearth of IPOs

Mar 25 2026

Speaker: Rene Stulz: Ohio State University

Time: 12:30 PM - 2:00 PM

Location: Volanakis

Many startups in the 2000s have achieved large valuations while remaining private, a pattern that funding availability alone cannot explain. We propose that startups relying heavily on organization capital to achieve economies of scale and network effects through digital technologies are more likely to become large private firms than exit earlier via an IPO or acquisition. Using LinkedIn data, we construct a novel measure of organization capital intensity for startups. Exploiting a legal shock that strengthened organization capital protection, we provide causal evidence that organization-capital-intensive startups are more likely to remain private and grow large rather than exit early.

Learning about Discount Rates

Apr 01 2026

Speaker: Olivier DESSAINT: INSEAD

Time: 12:30 PM - 2:00 PM

Location: Volanakis

Using valuation reports disclosing managers’ expectations of cashflow growth (g) and discount rates (k) in M&A transactions, we examine what they learn from target stock prices. Before correcting for endogeneity, both appear sensitive to prices—positively for g, negatively for k, and with equal magnitude—suggesting managers learn about both. However, using noise in prices as an instrument, only k reacts—with corrected estimates indicating that 89% of managers’ information about k comes from prices. Therefore, stock markets inform managers about risk and the compensation it requires, but not cashflows, which they already understand well. Cross-sectional tests reinforce this conclusion.

TBD

Apr 08 2026

Speaker: Jonathan Karpoff: University of Washington

Time: 12:30 PM - 2:00 PM

Location: Volanakis

TBD

Apr 09 2026

Speaker: Sam Kruger: University of Texas at Austin

Time: 12:15 PM - 1:45 PM

Location: Volanakis

TBD

Beliefs and Stock Market Fluctuations: New Evidence from the Past Seven Decades

Apr 15 2026

Speaker: David Thesmar: MIT

Time: 12:30 PM - 2:00 PM

Location: Volanakis

We build a new dataset with subjective expectations of equity returns and earnings from an independent equity analysis firm spanning 1956 to 2024. Our new measure of expected returns is highly correlated with the earnings-price ratio, is contrarian in response to past stock returns, and predicts future stock returns. These findings contrast with subjective expectations of individual investors and professional forecasters, which are weakly, or even negatively, correlated with our new expected return series. Disagreement between sophisticated and individual investors is associated with higher trading volume. Our findings are consistent with a model of heterogeneous beliefs, where naive investors extrapolate past returns (rather than past dividends) while sophisticated investors are close to rational.

Inefficiencies in the Securities Lending Market

Apr 29 2026

Speaker: Kent Daniel: Columbia University

Time: 12:30 PM - 2:00 PM

Location: Volanakis

In contrast with a general trend of declining trading frictions, over the last several decades the cost of borrowing securities for short-selling has increased dramatically. Using a portfolio approach, we show that as the borrow costs have increased so has the mispricing associated with portfolios of high-borrow-cost names. This decline in market efficiency has resulted from a lack of competition in the intermediation chain that links share lenders with borrowers, and a growing and rational unwillingness among institutional investors to hold and lend high-borrow-cost names. Since 2020, we estimate that the inefficiencies associated with these frictions have exceeded $300 Million/day.

TBD

May 06 2026

Speaker: Richard Thakor: University of Minnesota

Time: 12:30 PM - 2:00 PM

Location: Volanakis

TBD

May 13 2026

Speaker: Sergey Chernenko: Purdue University

Time: 12:30 PM - 2:00 PM

Location: Volanakis

TBD

May 20 2026

Speaker: Anna Cieslak: Duke University

Time: 12:30 PM - 2:00 PM

Location: Volanakis

TBD

May 21 2026

Speaker: Julia Fonseca: University of Illinois

Time: 12:15 PM - 1:45 PM

Location: Tseng

TBD

Finance

Research
Seminars

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Finance

ResearchSeminars

Filter results | Clear Filters

Corporate Cash Flow Outcomes Across Presidencies: Still a Presidential Puzzle

Advertising Securities

Revolving Credit to SMEs: The Role of Business Credit Cards

Artificial Intelligence and the Labor Market

The Power of the Common Task Framework

Common Investors Across the Capital Structure: Private Debt Funds as Dual Holders

The Welfare Benefits of Pay-As-You-Go Financing

Security Losses, Interbank Markets, and Monetary Policy Transmission: Evidence from the Eurozone

TBD

TBD

The Debt Ceiling’s Disruptive Impact: Evidence from Many Markets

The Effects of Cryptocurrency Wealth on Household Consumption

Factor Investing with Delays

A Tale of Two Anomalies: Value, Momentum, and Risk Sentiment

Treasury Auctions and Long-Term Bond Yields

Sustainable Investing in Practice: Objectives, Beliefs, and Limits to Impact

Data as a Networked Asset

Treasury Auctions and Long-Term Bond Yields

Hedging and Healing: How Business Cycle Exposure Affects the Safety Net

TBD

Automation Under Constraints: Exchange Rates, Interest Rates, and Firm Investment

Collateralized Loan Obligations as Fire-Sale Insulation

Long-Short Interest Rate Confusion

Mental Models and Financial Forecasts

Economic Representations

Testing for Discrimination in Menus

What Does ChatGPT Make of Historical Stock Returns? Extrapolation and Miscalibration in LLM Stock Return Forecasts

Owner Culture and Pay Inequality within Firms

Financial Regulation and AI: A Faustian Bargain?

How (Not) to Identify Demand Elasticities in Dynamic Asset Markets

Go with the Flow: Debt Structure Changes and Monetary Policy Transmission

Prime Broker Credit Supply and the Stock Market: Evidence on Hedge Fund Transmission

Organization capital, large startups, and the dearth of IPOs

Learning about Discount Rates

TBD

TBD

Beliefs and Stock Market Fluctuations: New Evidence from the Past Seven Decades

Inefficiencies in the Securities Lending Market

TBD

TBD

TBD

TBD

Research
Seminars