Papers & Opinions

Corporate finance | Electoral politics | Theory

Corporate Political Interests in Absentia

Paper

Posted on 5 October 2023

By Stylianos Papageorgiou

We formalize Zingales' (2017) argument about the link between corporate economic characteristics and political influence in a setup that exhibits an inverse relationship between citizens' participation in production and the...
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Electoral politics | Empirics | Financial markets | Regulation

Is Sustainable Finance a Dangerous Placebo?

Paper

Posted on 18 July 2023

By Stefano Ramelli

A first-order concern regarding sustainable finance is that it may crowd out individual support for more effective, policy-driven approaches to address societal challenges. We test the validity of this concern...
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Corporate finance | Electoral politics | Empirics

Smokestacks and the Swamp

Paper

Posted on 25 August 2022

By Stefan Lewellen

We examine the causal effect of politicians' partisan ideologies on firms' industrial pollution decisions. Using a regression discontinuity design involving close U.S. congressional elections, we show that plants increase pollution...
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Banking | Electoral politics | Theory

Bailouts by Popular Demand

Paper

Posted on 4 August 2022

By Stylianos Papageorgiou

We characterize conditions under which the majority of voters supports a bailout despite incurring bailout expenditures. This yields inefficiently high investments when economic prospects are good. When economic prospects are...
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Electoral politics | Financial development | Theory

Collective and Individual Investments in Financial Literacy

Paper

Posted on 10 June 2022

By Stylianos Papageorgiou

A collective and an individual investment in financial literacy, plus intrinsic skills, contribute to each household's financial literacy. We show that low- and high-skilled households oppose the collective investment, contrary...
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Central banking | Electoral politics | Political institutions

Ideology and Monetary Policy

Paper

Posted on 25 May 2022

By Nicolo Fraccaroli

We investigate the link between ideology and the sentiments of parliamentarians when they speak to the central bank they hold accountable. To this end, we collect textual data on the...
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Electoral politics | Empirics | Financial markets

Investor Rewards to Climate Responsibility: Stock-Price Responses to the Opposite Shocks of the 2016 and 2020 US Elections

Paper

Posted on 28 January 2022

By Stefano Ramelli

Donald Trump's 2016 election and his nomination of climate skeptic Scott Pruitt to head the Environmental Protection Agency drastically downshifted expectations about U.S. policy toward climate change. Joseph Biden's 2020...
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Electoral politics | Political institutions | Theory

Leaping into the Dark: A Model of Policy Gambles with Self-Fulfilling Features

Paper

Posted on 22 November 2021

By Kartik Anand

We examine why rational voters support risky “policy gambles”, even when detrimental to welfare, over maintaining a safe status quo. We present a model of electoral competition with two groups...
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Banking | Central banking | Electoral politics | Empirics | Political institutions

Central Banks in Parliaments

Paper

Posted on 10 October 2021

By Nicolo Fraccaroli

This paper investigates whether parliamentary hearings are effective in holding central banks accountable against their mandates. To this end, it applies text analysis on the hearings of the Bank of...
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Banking | Corporate finance | Electoral politics | Financial markets

Does Political Partisanship Cross Borders? Evidence from International Capital Flows

Paper

Posted on 4 October 2021

By Elisabeth Kempf

Does partisan perception shape the flow of international capital? We provide evidence from two settings, syndicated corporate loans and equity mutual funds, to show that ideological alignment with foreign governments...
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Banking | Electoral politics | Empirics | Political institutions

The Costs of Political Misalignment: Forest Fires and Bank Loans in Turkey

Opinion

Posted on 16 September 2021

By Orkun Saka

Recent wildfires in Turkey have not only destroyed more than 95,000 hectares of its coastal forestland but also divided the country further into its political colors. This piece discusses the...
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Electoral politics | Media | Regulation

Finance and Politics: New Insights

Opinion

Posted on 4 August 2021

By Orkun Saka

A rapidly expanding literature has shown the importance of political economy factors for legislative and regulatory actions in the financial sector and ultimately financial sector stability and efficiency. This column...
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Banking | Electoral politics | Empirics

Lending Cycles and Real Outcomes: Costs of Political Misalignment

Paper

Posted on 30 July 2021

By Orkun Saka

We document a strong political cycle in bank credit and industry outcomes in Turkey. In line with theories of tactical redistribution, state-owned banks systematically adjust their lending around local elections...
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Electoral politics | Empirics | Political institutions

The Political Scar of Epidemics

Paper

Posted on 15 July 2021

By Orkun Saka

What political legacy is bequeathed by national health crises such as epidemics? We show that epidemic exposure in an individual’s “impressionable years” (ages 18 to 25) has a persistent negative...
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Electoral politics | Financial markets | Theory

Inequality Aversion, Populism, and the Backlash Against Globalization

Paper

Posted on 12 July 2021

By Lubos Pastor

Motivated by the recent rise of populism in western democracies, we develop a tractable equilibrium model in which a populist backlash emerges endogenously in a strong economy. In the model,...
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