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Volanakis
12:00 PM - 1:00 PM
Kateryna Holland
Corporate Cash Flow Outcomes Across Presidencies: Still a Presidential Puzzle
FEA - Finance
Corporate Cash Flow Outcomes Across Presidencies: Still a Presidential Puzzle
Speaker: Kateryna Holland
Time: 12:00 PM - 1:00 PM
Location: Volanakis
Finance Brown BagVolanakis
12:30 PM - 2:00 PM
Alexander Ljungqvist: Stockholm School of Economics
Advertising Securities
FEA - Finance
Advertising Securities
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.Buchanan 151
12:15 PM - 1:45 PM
Greg Buchak: Stanford Graduate School of Business
Revolving Credit to SMEs: The Role of Business Credit Cards
Household Finance
Revolving Credit to SMEs: The Role of Business Credit Cards
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.Volanakis
12:30 PM - 2:00 PM
Lawrence Schmidt: MIT
Artificial Intelligence and the Labor Market
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Artificial Intelligence and the Labor Market
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.Volanakis
12:30 PM - 2:00 PM
Theis Jensen: Yale University
The Power of the Common Task Framework
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The Power of the Common Task Framework
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.Volanakis
12:30 PM - 2:00 PM
Isil Erel: Ohio State University Fisher College of Business
Common Investors Across the Capital Structure: Private Debt Funds as Dual Holders
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Common Investors Across the Capital Structure: Private Debt Funds as Dual Holders
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.Volanakis
12:30 PM - 2:00 PM
David Sraer: UC Berkeley
The Welfare Benefits of Pay-As-You-Go Financing
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The Welfare Benefits of Pay-As-You-Go Financing
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.Volanakis
12:30 PM - 2:00 PM
Mariassunta Giannetti: Stockholm School of Economics
Security Losses, Interbank Markets, and Monetary Policy Transmission: Evidence from the Eurozone
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Security Losses, Interbank Markets, and Monetary Policy Transmission: Evidence from the Eurozone
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
12:15 PM - 1:45 PM
Constantine Yannelis: University of Chicago Booth School of Business
TBD
Household Finance
TBD
Speaker: Constantine Yannelis: University of Chicago Booth School of Business
Time: 12:15 PM - 1:45 PM
Location: TBD
Buchanan 151
12:15 PM - 1:45 PM
Christine Laudenbach: Goethe University, Leibniz Institute SAFE
TBD
Household Finance
TBD
Speaker: Christine Laudenbach: Goethe University, Leibniz Institute SAFE
Time: 12:15 PM - 1:45 PM
Location: Buchanan 151
Volanakis
12:30 PM - 1:45 PM
William Cassidy: Washington University Olin Business School
The Debt Ceiling’s Disruptive Impact: Evidence from Many Markets
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The Debt Ceiling’s Disruptive Impact: Evidence from Many Markets
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.Volanakis
12:30 PM - 1:45 PM
Tetyana Balyuk: Emory University
The Effects of Cryptocurrency Wealth on Household Consumption
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The Effects of Cryptocurrency Wealth on Household Consumption
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.Volanakis
12:30 PM - 1:45 PM
Yoshio Nozawa: University of Toronto
Factor Investing with Delays
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Factor Investing with Delays
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.TBD
Speaker: Dirk Jenter: London School of Economics
Time: 12:30 PM - 1:45 PM
Location: Volanakis
TBDTBD
Speaker: William Diamond: University of Pennsylvania
Time: 12:30 PM - 1:45 PM
Location: Volanakis
TBDVolanakis
12:30 PM - 1:45 PM
Chen Wang: University of Notre Dame Mendoza College of Business
TBD
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TBD
Speaker: Chen Wang: University of Notre Dame Mendoza College of Business
Time: 12:30 PM - 1:45 PM
Location: Volanakis
TBDTBD
Speaker: Suproteem Sarkar: University of Chicago
Time: 12:30 PM - 1:45 PM
Location: Volanakis
TBDTBD
Speaker: Clifton Green: Emory University
Time: 12:30 PM - 1:45 PM
Location: Volanakis
TBD