We aim to connect Yonsei University (Seoul, Korea) alumni who are pursuing or have pursued a PhD in Finance in the U.S., Europe, and Korea. We would like to know each other beyond our usual friendship and hope for potential collaborations in finance research.

Paper Session 

Title: The Determinants of Bond-Stock Correlation: the Role of Trend Inflation and Monetary Policy

• Presenter: Jinyoung Seo (Wake Forest University)

• Discussant: Jewon Shin (Pennsylvania State University)

• Abstract: I show that Treasuries' role as hedge assets is determined by the level of trend inflation and the conduct of monetary policy, using a Generalized New Keynesian habit model. A novel prediction from the model is that when trend inflation is high, nominal bonds exhibit a positive correlation with stock returns, making them risky assets. As trend inflation rises, inflation becomes more countercyclical because any transitory inflation generates temporary output loss due to endogenous cost-push effects, which emerge under positive trend inflation. When countercyclical inflation prevails,  bond returns drop when stocks underperform, leading to a positive bond-stock correlation. The model explains the shift in US bond-stock correlation from positive to negative in 1997 as a consequence of stabilized trend inflation.

Title: Barriers to Reentry: Initial Borrowing Frictions, Refinancing, and Wealth Redistribution

• Presenter: Heejin Yoon (University of Wisconsin-Madison)

• Discussant: Yun Joo An (Indiana University)

• Abstract: This paper examines how frictions encountered during the initial home purchase mortgage origination process shape borrowers’ future refinancing behavior and long-term financial outcomes. Leveraging variation in loan officer workload as a quasi-random source of origination delays, I find that experiencing a 60+ day delay reduces quarterly refinancing rates by 16–24%. Exposure to these origination frictions is disproportionately concentrated among minority borrowers, low-income households, and those with lower credit scores, with evidence consistent with lender bias contributing to racial disparities. I quantify the cost of origination delays using both a back-of-the-envelope calculation and a model-based simulation, which imply present-value overpayments of approximately $6,500 to $8,500 per delayed borrower. I also evaluate policy alternatives including streamlined refinancing, automatic refinancing, and type-specific pricing, using the simulations to show how each option affects refinancing behavior and total mortgage payments.

Early Idea Session 

Title: From Rates to Riches: How Danish Homeowners Respond to Interest Rate Shocks

• Presenter: Jae Hun Jeong (Duke University)

• Coauthors: David Berger, Julie Marx, Maria Victoria Olesen, Fabrice Tourre 

• Abstract: This paper investigates the real effects of a large, positive net-worth shock experienced by Danish fixed-rate mortgage borrowers in 2022, when rising long-term interest rates enabled them to repurchase their mortgages at steep discounts. Unlike U.S. FRMs, Danish mortgages allow borrowers to monetize capital gains when rates rise, creating a unique setting to study household responses to large wealth shocks. Using high-quality microdata, we document that many households refinanced to capture gains, reducing debt or increasing consumption and investments. A coarsened exact matching procedure that helps approximate randomized experimental conditions reveals moderate consumption responses and no mortgage lock-in effect, contrasting with U.S. findings. A structural model confirms heterogeneous responses across mortgage types, highlighting the role of institutional design in shaping monetary policy transmission.

Title: The Information Effect of Stock Prices on Household Consumption

• Presenter: Myunghwan Andrew Lee (New York University)

• Abstract: This paper studies how stock price changes affect household consumption through information channels. Using linked survey and transaction data together with an information randomized controlled trial, I document five facts. First, short-run stock price growth nowcasts are highly dispersed. Second, wealthy stockholders are more accurate, but substantial dispersion remains. Third, short-run stock price news strongly shifts long-run beliefs. Fourth, belief responses attenuate with news size. Fifth, stockholders reduce current consumption after positive stock price news, while non-stockholders do not respond. These facts are consistent with a model in which stockholders treat price changes as information about a revisable long-run mean and, under Epstein–Zin preferences with a high elasticity of intertemporal substitution, substitute intertemporally. I develop such a model with endogenous attention and belief updating, and derive identification implications for both the wealth-effect and intertemporal substitution literatures.

Co-Founder