We provide a theoretical model linking firm characteristics and expected returns. The key ingredient of our model is technological shocks embodied in new capital (IST shocks), which affect the profitability of new investments. Firms' exposure to IST shocks is endogenously determined by the...

We propose a new measure of the economic importance of each innovation. Our measure uses newly collected data on patents issued to US firms in the 1926 to 2010 period, combined with the stock market response to news about patents. Our patent- level estimates of private economic value are...

Pay inequality between executives and workers accounts for a substantial fraction of overall pay inequality in the United States. We develop a general equilibrium model that delivers realistic fluctuations in pay inequality -- both between executives and workers, and among executives in...

We use textual analysis of high-dimensional data from patent documents to create new indicators of technological innovation. We identify significant patents based on textual similarity of a given patent to previous and subsequent work: these patents are distinct from previous work but are...

We propose a new measure of the economic importance of each innovation. Our measure uses newly collected data on patents issued to US firms in the 1926 to 2010 period, combined with the stock market response to news about patents. Our patentlevel estimates of private economic value are...

Average return differences among firms sorted on valuation ratios, past investment, prof-itability, market beta, or idiosyncratic volatility are largely driven by differences in exposures offirms to the same systematic factor related to embodied technology shocks. Using a calibratedstructural...

We develop a general equilibrium model that delivers realistic fluctuations in both the level as well as the dispersion in executive pay as a result of changes in the technology frontier. Our model recognizes that executives add value to the firm not only by participating in production...

We use textual analysis of high-dimensional data from patent documents to create new indicators of technological innovation. We identify important patents based on textual similarity of a given patent to previous and subsequent work: these patents are distinct from previous work but are related...

This paper examines the relationship between technological progress and the riskiness of labor income using employer-employee matched income data from the United States. Results suggest innovation is associated with a substantial increase in the labor income risk, especially for workers at the...