This paper investigates the market reaction to recent legislative and regulatory actions pertaining to corporate governance. The managerial power view of governance suggests that executive pay, the existing process of proxy access, and various governance provisions (e.g., staggered boards and...

A defining feature of business cycles is the comovement of inputs at the sectoral level with aggregate activity. Standard models cannot account for this phenomenon. This paper develops and estimates a two-sector dynamic general equilibrium model which can account for this key regularity. My...

Many institutional investors rely on a proxy advisory firm to assist them in voting the company proxy and fulfilling their fiduciary responsibility to vote in the interest of beneficial shareholders. The largest and most influential proxy advisory firm is Institutional Shareholder Services...

We develop a model to rationalize and examine so-called “research bubbles”, i.e. research activities based on overoptimistic beliefs about the impact of this research on the economy. Research bubbles occur when researchers selfselect into research activities and the government aggregates the...

This paper introduces a bubbly asset to a standard macroeconomic model with heterogeneous agents and borrowing constraints. In this tractable quantitative framework, I show the possibility of a return-preserving bubble that absorbs savings with no good investment opportunities. Analysis of the...

This paper investigates empirically the relationship between stock market and banking sector development with data from 40 countries (representing 85% of global GDP) over a period of 53 years. When measured by ratios of stock market (i) capitalization to GDP; (ii) turnover to GDP; and (iii)...

We develop a simple agent-based financial market model in which speculators' market entry decisions are subject to herding behavior and market risk. Moreover, speculators' orders depend on price trends, market misalignments and fundamental news. Using a mix of analytical and numerical tools, we...