Papers & Opinions

Central banking | Corporate finance | Political institutions

(Why) Do Central Banks Care About Their Profits?

By Martin Schmalz | Posted on 1 July 2021

We document that central banks are significantly more likely to report slightly positive profits than slightly negative profits, especially amid greater political pressure, the public’s receptiveness to more extreme political...
READ MORE

Banking | Electoral politics | Empirics

Banks, Political Capital, and Growth

By Thomas Lambert | Posted on 30 June 2021

In this paper, we study the consequences of banks’ political connectedness for economic activity. We focus on the subset of banks that donate to candidates in US congressional elections, and...
READ MORE

Corporate finance | Empirics | Political institutions

Finance and Ideology: The Firm-Level Channels

By Haikun Zhu | Posted on 22 June 2021

We investigate how politicians’ ideologies affect economic outcomes and financial development through firm-level channels. We explore a unique setting of ideological change in China from Mao’s ideology to Deng’s around...
READ MORE

Central banking | Political institutions | Theory

The Euro as a Diverse Monetary Union

By Oscar Soons | Posted on 21 May 2021

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

By Magdalena Rola-Janicka | Posted on 21 May 2021

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