Tag Archives: Finance

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

Posted on April 16, 2014 by ozidar

From Joe Stiglitz and summarized by Felix Salmon:

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Banks as Patient Fixed Income Investors

Posted on April 12, 2014 by ozidar

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

Posted on March 31, 2014 by ozidar

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

Posted on March 20, 2014 by ozidar

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

Posted on January 11, 2014 by ozidar

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

Posted on December 12, 2013 by ozidar

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

Posted on December 11, 2013 by ozidar

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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The Future of Capital Income Taxation

Posted on December 8, 2013 by ozidar

From Alan Auerbach: The case against capital income taxation is stronger now than when Pechman wrote [in 1900], given the difficulty of collecting capital income taxes in a world of financial innovation and capital mobility. […] The rising importance of financial … Continue reading →

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Regulating Consumer Financial Products: Evidence from Credit Cards

Posted on November 11, 2013 by ozidar

The NYTimes has an interesting story on this paper from Sumit Agarwal, Souphala Chomsisengphet, Neale Mahoney, and Johannes Stroebel: We analyze the effectiveness of consumer financial regulation by considering the 2009 Credit Card Accountability Responsibility and Disclosure (CARD) Act in … Continue reading →

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A Model of the Safe Asset Mechanism (SAM): Safety Traps and Economic Policy

Posted on August 28, 2013 by ozidar

From Caballero and Fahri: The global economy has a chronic shortage of safe assets which lies behind many recent macroeconomic imbalances. This paper provides a simple model of the Safe Asset Mechanism (SAM), its recessionary safety traps, and its policy … Continue reading →

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