Theory

    Papers & Opinions

    Empirics | Financial markets | Political institutions | Theory

    Democratization, Inequality, and Risk Premia

    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...
    READ MORE

    Corporate finance | Political institutions | Theory

    Voting in Shareholders Meetings

    Paper

    Posted on 20 September 2021

    By Laurent Bouton

    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...
    READ MORE

    Banking | Central banking | Theory

    Monetary Policy with Reserves and CBDC: Optimality, Equivalence, and Politics

    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...
    READ MORE

    Empirics | Financial markets | Theory

    Political Cycles and Stock Returns

    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,...
    READ MORE

    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,...
    READ MORE

    Central banking | Political institutions | Theory

    The Euro as a Diverse Monetary Union

    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...
    READ MORE

    Banking | Electoral politics | Theory

    The Political Economy of Prudential Regulation

    Paper

    Posted on 21 May 2021

    By Magdalena Rola-Janicka

    This paper introduces a voting model into a setting with negative borrowing externalities to study voter preferences for prudential regulation. Voters internalize the general equilibrium impact of prudential policy on...
    READ MORE
    • 1
    • 2