Tag Archives: Finance

Tapping the Brakes: Are Less Active Markets Safer and Better for the Economy?

From Joe Stiglitz and summarized by Felix Salmon:

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Banks as Patient Fixed Income Investors

From Sam Hanson, Andrei Shleifer, Jeremy Stein, and Robert Vishny: We examine the business model of traditional commercial banks in the context of their co- existence with shadow banks. While both types of intermediaries create safe “money-like” claims, they go about … Continue reading

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High Frequency Trading

There has been a lot of buzz about Michael Lewis’s new book and high frequency trading. Eric Budish has a recent paper and proposal that has been getting a lot of attention from policymakers. Here is a Booth debate with Eric … Continue reading

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The High-Frequency Trading Arms Race: Frequent Batch Auctions as a Market Design Response

From Eric Budish, Peter Cramton, and John Shim: We argue that the continuous limit order book is a flawed market design and propose that financial exchanges instead use frequent batch auctions: uniform-price sealed-bid double auctions conducted at frequent but discrete time … Continue reading

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Capital Requirements, Risk Choice, and Liquidity Provision in a Business Cycle Model

From Juliane Begenau: This paper presents a quantitative dynamic general equilibrium model for the purpose of determining the optimal capital requirement for banks. Banks play two roles in this model: They contribute to the production of a final good and … Continue reading

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Housing Collateral and Entrepreneurship

From Martin Schmalz, David Sraer, and David Thesmar: This paper shows that collateral constraints restrict entrepreneurial activity. Our empirical strategy uses variations in local house prices as shocks to the value of col- lateral available to individuals owning a house and … Continue reading

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Housing Dynamics

From Ed Glaeser, Joseph Gyourko, Eduardo Morales and Charles Nathanson: The volatility of housing prices and construction levels is high. Both price changes and permits exhibit strong positive serial correlations at one year frequencies. Prices, but not permits, show strong mean … Continue reading

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