Published Articles
Financing Dies in Darkness? The Impact of Newspaper Closures on Public Finance
Coauthored with Pengjie Gao from University of Notre Dame and Dermot Murphy from UIC, Journal of Financial Economics (2020)
Featured on The Guardian, Forbes, The Atlantic, Barron's, LA Times, Bloomberg, Columbia Journalism Review, Chicago Magazine, NPR Oregon, KIRO Seattle, and WTTW Chicago Tonight
Presented at the NBER Corporate Finance conference, SFS Cavalcade, and Brookings Institute Municipal Finance Conference
Best paper, Brookings Institute Municipal Finance Conference
This paper examines how local newspaper closures affect public finance outcomes for local governments. Local newspapers in the United States have been steadily declining in recent years, with circulation numbers down approximately 27% from 2003 to 2014. Other studies have shown that the loss of a local newspaper leads to worsened political outcomes in the region, and we illustrate that there are worsened finance outcomes as well. Specifically, following a newspaper closure, municipal borrowing costs increase by 5 to 11 basis points, costing the municipality an additional $650 thousand per issue. Overall, our results indicate that local newspapers hold their governments accountable, keeping municipal borrowing costs low and ultimately saving local taxpayers money.
Municipal Borrowing Costs and State Policies for Distressed Municipalities
Coauthored with Pengjie Gao from University of Notre Dame and Dermot Murphy from UIC, Journal of Financial Economics (2018)
Featured on the Harvard Law School Bankruptcy Roundtable
Presented at the Brookings Institute Municipal Finance Conference and Northern Finance Association Meetings
This paper investigates the different state laws for dealing with distressed local governments and the effect of these laws on municipal defaults and borrowing costs. Recent high-profile municipal default cases in Detroit, Puerto Rico, and various cities in California have underscored the importance of default risk in municipal bond markets. Yet, the political and institutional details of municipal default proceedings and their effects on municipal borrowing costs have not been investigated in the literature. This paper fills this gap by examining differences in distress-related laws and statutes across states.
Working Papers
Good for your Fiscal Health? The Effect of the Affordable Care Act on Healthcare Borrowing Costs
Coauthored with Pengjie Gao from University of Notre Dame and Dermot Murphy from UIC (2021)
Featured on Yahoo! Finance and Becker's Hospital Review
We study healthcare borrowing costs around the Affordable Care Act (ACA). The ACA provides insurance subsidies to low-income residents. States could accept funding to expand Medicaid, although many declined, citing the cost burden. The ACA significantly decreased healthcare borrowing costs after a favorable 2012 Supreme Court ruling. Furthermore, hospital investment spending increased, and investment sensitivity to cash flows decreased. The yield effect was double in Medicaid-expansion states, and insignificant in rural areas which lack insurance competition. Our results highlight how the municipal market can be used to evaluate the heterogeneous effects of public policy and guide a targeted policy approach.
News Shocks, Long-Run Risk, and Asset Returns
Coauthored with Soohun Kim from Korea Advanced Institute of Science and Technology (2014)
This paper examines the asset pricing implications of technology news shocks in the context of long-run consumption risk. Importantly, this paper connects various empirical findings in financial markets through a fundamental shock that drives the macroeconomy, thereby relating the behavior of expected returns to the real economy.
(2014)
This paper examines how the returns of different industries that produce different goods are determined in a general equilibrium model. By relaxing the single good assumption of traditional asset pricing models, this paper shows the central role of imperfect substitutability between different goods in asset pricing.