Investment of U.S. firms responds asymmetrically to Tobin's Q: Investment of established firms -- `intensive' investment -- reacts negatively to Q whereas investment of new firms -- `extensive' investment -- responds positively and elastically to Q. This asymmetry, we argue, reflects a...

Using 114 years of U.S. stock market data we try to relate movements in stock prices to changes in technology. We find measures of technological progress explain 37% of the 3.9% annual growth in the stock market over the 1885-1998 period, the "Jazz-Age" (1918-1934) entrants were not overvalued,...

The term "new economy" has, more than anything, come to mean a technological transformation, and in particular its embodiment in the computer and the internet. These technologies are more human capital intensive than earlier ones and have probably hastened the pace of the shift in the U.S....

U.S. Treasury securities are nominal assets that are subject to two sources of risk: inflation risk, and bond-supply risk. Inflation risk is well-known, but supply risk has received little attention. For reasons we shall discuss in the body of the paper, the amount of securities offered to the...

We analyze mergers over the past century in a growth model that emphasizes technological change. We explain the positive relation between mergers and stock prices, the positive relation between internal growth of firms and their acquisitions, and the positive relation of mergers with other...

We trace directors through time and across firms to study whether acquirers' exposure to non-public information about potential targets through board service histories affects the market for corporate control. In a sample of publicly-traded U.S. firms from 1996 through 2006, we find that...

The “Federalist financial revolution†may have jump-started the U.S. economy into modern growth, but the Free Banking System (1837-1862) did not play a direct role in sustaining it. Despite lowering entry barriers and extending banking into developing regions, we find in county-level...

The "Federalist financial revolution" may have jump-started the U.S. economy into modern growth, but the Free Banking System (1837-1862) did not play a direct role in sustaining it. Despite lowering entry barriers and extending banking into developing regions, we find in county-level data that...

Is political unity a necessary condition for a successful monetary union? The early United States seems a leading example of this principle. But the view is misleadingly simple. I review the historical record and uncover signs that the United States did not achieve a stable monetary union, at...

A large body of evidence links financial development to economic growth, yet the channels through which inflation affects this relationship and its stability have been less thoroughly explored. We take an econometric and graphical approach to analyzing these channels, and find that higher levels...