Papers & Opinions



By Dirk Niepelt | Posted on 11 August 2021

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...


By Orkun Saka | Posted on 4 August 2021

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...


By Jörg Stahl | Posted on 2 August 2021

This paper analyzes the effect of the composition of the electorate on corporate prospects. Electorates constantly change, and support-maximizing policymakers adjust their legislative behavior to accommodate shifts in voter preferences....


By Orkun Saka | Posted on 30 July 2021

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...


By Jinfei Sheng | Posted on 19 July 2021

We document sharp differences in stock price responses to COVID-19-related news between public firms headquartered in blue counties (dominated by Democratic voters) and those in red counties (dominated by Republican...


By Lubos Pastor | Posted on 18 July 2021

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,...


By Phong Ngo | Posted on 16 July 2021

We show that political polarization between directors and the CEO negatively impacts the effectiveness of corporate boards. At the director level, polarization increases directors’ incentive to monitor the CEO but...


By Orkun Saka | Posted on 15 July 2021

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...


By Lubos Pastor | Posted on 12 July 2021

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,...


By Thomas Groll | Posted on 7 July 2021

We analyze the institutional determinants of U.S. financial market regulation with a general model of the policy-making process in which legislators delegate authority to regulate financial risk at both the...


By Phong Ngo | Posted on 7 July 2021

The U.S. government uses its voting power to direct IMF loans to countries where U.S. banks are exposed to sovereign default—a de facto bailout. This effect is stronger in years...


By Orkun Saka | Posted on 7 July 2021

We first present a simple model of post-crisis policymaking driven by both public and private interests. Using a novel dataset covering 94 countries between 1973 and 2015, we then establish...


By Enrico Perotti | Posted on 6 July 2021

This post reports on recent work presented at the first edition of the CEPR Conference Series on the Political Economy of Finance, which focused on the politics of regulation and...


By Elisabeth Kempf | Posted on 3 July 2021

Executive teams in U.S. firms are becoming increasingly politically polarized. We establish this new fact using political affiliations from voter registration records for top executives of S&P 1500 firms between...


By Elisabeth Kempf | Posted on 3 July 2021

We compare the findings of central bank researchers and academic economists regarding the macroeconomic effects of quantitative easing (QE). We find that central bank papers find QE to be more...