This paper examines the effects of the recent financial crisis on corporate cash holdings and saving propensities. We find that on average, firms reduce their cash holdings in the first year of the crisis when the supply of external finance is tightened, and increase their holdings in cash from...

Most traditional insurance companies have escaped the financial storms during 2007-2009 while companies engaging in financial risk taking were not this lucky. In this study, we examine the performance of financial risk insurers and analyze the contributing role of financial risk insurers to...

Compared to conventional mutual funds, socially responsible mutual funds outperform during periods of market crisis. This dampening of downside risk comes at the cost of under performing during non-crisis periods. Investors with Prospect Theory utility functions would value the skewness of these...

I describe household behavior in boom and bust economic cycles with a particular focus on the recent financial crisis. The behaviors are motivated by cognitive limitations and psychological bias. In boom times, households’ extrapolation bias and groupthink lead to chasing and extending asset...