We show that executives cut investment when their incentives become more short-term. We examine a unique event in which hundreds of firms eliminated option vesting periods to avoid a drop in income under accounting rule FAS 123-R. This event allowed executives to exercise options earlier and...

We contrast how monetary policy affects intangible relative to tangible investment. We document that the stock prices of firms with more intangible assets react less to monetary policy shocks, as identified from Fed Funds futures movements around FOMC announcements. Consistent with the stock...

Liquidity creation (the transformation of liquid liabilities into illiquid assets) by banks is positively associated with economic growth at both country and industry levels. Liquidity creation boosts tangible, but not intangible investment and does not contribute to growth in countries with a...