The recent financial crisis has led many to question how well businesses deliver consumer financial services and how well regulatory institutions address problems in consumer financial markets. In response, the Obama administration proposed a new agency to oversee consumer financial services,...

Interest rate caps are widespread in consumer credit markets, yet there is limited evidence on its effects on market outcomes and welfare. Conceptually, the effects of interest rate caps are ambiguous and depend on a trade-off between consumer protection from banks' market power and reductions...

One of the most notable developments in financial markets over the last 50 years is the growth of digital technology—a trend often referred to as “fintech.” This chapter examines fintech through the lens of consumer financial privacy, focusing on the implications of artificial intelligence...

We present a newly designed market experiment to study regulatory issues in markets with advice inspired by the models of Inderst and Ottaviani (2012a) and Inderst (2015). In line with our predictions, our experimental markets create conflicts of interest and unsuitable advice biased toward...

We develop a model of rational bubbles based on the assumptions of unknown market liquidity and limited liability of traders. In a bubble, the price of an asset rises dynamically above its steady-state value, justified by rational expectations about future price developments. The larger the...

We develop a model of rational bubbles based on the assumptions of unknown market liquidity and limited liability of traders. In a bubble, the price of an asset rises dynamically above its steady-state value, justified by rational expectations about future price developments. The larger the...

This paper analyzes some of the elements of the new economy. What is really new is first of all the technological innovation. In economic terms what is new is a new product. The new IT product brought about by the new technology means two different things: a new device to handle data and to...

Government regulation is a double-edged sword. By restricting the inputs—capital, labor, technology, and more—that can be used in the production process, regulation shapes the economy and, by extension, living standards today and in the future. Applied effectively, regulation can foster a...

The equity premium–risk-free rate puzzle in standard consumption-based asset pricing models disappears once we remove the government-imposed component from the consumption expenditure series. I calibrate this component based on the growth rates of two proxies for government intervention, which...