Data obtained from monthly Gallup/UBS surveys from 1998-2007 and from a special supplement to the Michigan Surveys of Consumer Attitudes, run in 22 monthly surveys between 2000-2005, are used to analyze stock market beliefs and portfolio choices of household investors. We show that the key...

A fundamental tenet of traditional theories of investment and monetary policy transmission is that interest rates are a critical determinant of business investment expenditures. Yet, a large body of empirical research offers mixed evidence, at best, for substantial interest-rate effects on...

We apply textual analysis tools to the narratives that accompany Federal Reserve Board economic forecasts to measure the degree of optimism versus pessimism expressed in those narratives. Text sentiment is strongly correlated with the accompanying economic point forecasts, positively for GDP...

We examine the stock price benefit of meeting or beating earnings expectations. Using a general methodology, we find no compelling evidence that the timing of earnings news benefits firms' stock returns. Our results appear to overturn the findings of previous authors who, using less general...

We test the hypothesis that the 2003 dividend tax cut boosted U.S. stock prices and thus lowered the cost of equity. Using an event-study methodology, we attempt to identify an aggregate stock market effect by comparing the behavior of U.S. common stock prices to that of European stocks and real...