We develop an equilibrium model where cash holdings, costly refinancing policies, and managerial incentives are jointly determined to quantify the market's influence on management's ex ante behavior. We also derive a general formula that shows how agency and financing distortions shape payouts...

We empirically show across several broad asset classes that sectoral wealth shares do not positively correlate with their risk premia---a first-order prediction of canonical equilibrium models. We then analyze the roles mean-variance and hedging demand play in accounting for sectoral shifts...

I develop a new method that structures financial market data to forecast economic outcomes. I use it to study the IT sector's transition to its long-run share in the US economy. The method uses a model which links economy-wide growth with IT's market valuation to match transition data on...