Paper
Posted on 10 July 2024
We study the interplay between a "one person-one vote" political system and "one share-one vote" corporate governance regime. The political system sets Pigouvian subsidies, while corporate governance determines firm-specific public...
Paper
Posted on 5 October 2023
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...
Paper
Posted on 4 August 2022
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...
Paper
Posted on 17 June 2022
By AJ Chen
We propose a novel pressure-based model of financial misconduct. We interpret the robust empirical findings of a high “success rate of crime” as evidence of skewness in the payoff of...
Paper
Posted on 14 June 2022
By ALI LAZRAK
We study a standard real-option problem in which sequential decisions are made through voting by a group of members with heterogeneous beliefs. We show that, when facing both investment and...
Paper
Posted on 10 June 2022
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...
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...
Paper
Posted on 8 November 2021
In a general equilibrium framework, we study the cost incurred by banks to ''buy" influence on capital regulation via campaign contributions. Our central result is that banks buy influence at...
Paper
Posted on 22 October 2021
By Shaoting Pi
We study firm governance when shareholders strategically vote and buy/sell shares. We find that voting for the better policy maximizes portfolio value only when pivotal; otherwise, it is better to...
Paper
Posted on 21 September 2021
By Max Miller
Risk premia are significantly elevated during periods of democratization in a cross-country panel of equity data covering 85 countries over 200 years, despite little evidence of a negative effect on...
Paper
Posted on 20 September 2021
This paper studies voting in shareholders meetings. We focus on the informational efficiency of different voting mechanisms, taking into account that they affect both management's incentives before the meeting and...
Paper
Posted on 11 August 2021
By Dirk Niepelt
We analyze the introduction of retail central bank digital currency (CBDC) into a two-tiered monetary system. Deposits, reserves, and CBDC differ in terms of operating costs and liquidity. We identify the optimal...
Paper
Posted on 18 July 2021
By Lubos Pastor
We develop a model of political cycles driven by time-varying risk aversion. Agents choose to work in the public or private sector and to vote Democrat or Republican. In equilibrium,...
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,...
Paper
Posted on 21 May 2021
By Oscar Soons
We analyze the political economy causes and consequences of a monetary unification among countries with different institutional quality. Before a common currency countries with stronger institutions have more efficient public...
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