2 - Research

Ulf Nielsson

Research

Working papers

"Empirical Monetary-Fiscal Equivalence" w/ J. Rangvid, F. Saidi, F. Seyrich, and D. Streitz. May, 2025.

What sequence of stimulus payments induces the same consumption path as a desired (but potentially infeasible) interest rate cut? This mapping depends exclusively on slopes of an aggregate consumption function, recoverable through microeconomic causal variation. Using granular full-population administrative data, we combine spending responses to monetary-policy transmission through mortgage contracts and windfall gains from unanticipated cash inheritances. Matching the consumption response from a 1 percentage point decrease in the monetary-policy rate requires stimulus payments totaling 1.3% of GDP over 5 years. We show that this estimate is robust to accounting for heterogeneity in the cross-sectional incidence of these macro-equivalent policies.

"Household Stock Market Participation: Learning from Pension Fund Asset Allocation" w/ O-A. Press, J. Rangvid and O. Setty. June 2025.

The global shift towards defined contribution pension schemes significantly increases households’ exposure to equity markets through their pension savings. Does this shift also influence households’ non-pension investment choices, and if so, why? We present evidence that households are more likely to invest in equities through their non-pension savings following an increase in the stock market exposure of their pension plans. We interpret our results within the framework of a simple model, illustrating how equity exposure via pension savings can lower barriers to stock market participation for nonpension investments.

"The Incidence and Efficiency of Land Value Taxation" w/ C. Wroblewski and A. Yding. November 2024.

Land value taxes are often seen as particularly desirable because the fixed supply of land implies no efficiency loss from taxation, with the entire tax burden falling on current landowners. We study the incidence and efficiency of land taxes using a unique quasi-experiment that generated persistent variation in land tax rates across Danish municipalities. In contrast to the predictions of standard, neoclassical models, we estimate a precise zero effect of land taxes on residential home prices. The precision of our estimates allows us to confidently rule out full capitalization of taxes into home prices using leading estimates of housing discount rates. Our results imply that the burden of land taxes is shared with tenants and future purchasers. We also estimate null effects of land taxes on measures of housing development, mobility, and homeownership, though we do find that older homeowners sort away from high tax areas. Our results are consistent with limited efficiency costs of land value taxation but imply that land taxes are more regressive in our setting than predicted by standard models.

"Financial Constraints and Household Green Technology Adoption" w/ T. Berg and D. Streitz. August 2025.

Households account for a large share of carbon emissions, yet high upfront costs of cleaner technologies can slow their adoption. Using inheritances from parental deaths as plausibly exogenous wealth shocks, we study whether financial constraints hinder the transition to green heating and e-vehicles. Windfalls substantially increase adoption, but only among highly leveraged households, consistent with binding financial constraints. A median inheritance of $22k raises heat pump adoption by 17.5\% and annual e-vehicle purchases by 8.5% in the years following the shock. Counterfactual simulations suggest that relaxing household financial constraints could accelerate the net-zero transition in heating and mobility by 10-15%.

"Active or Passive: Deposit Investment of Individual Investors" w/ L.S. Larsen, O-A. Press, J. Rangvid. February 2024.

Using detailed register-based data with information on individuals’ deposit holdings, we test whether individuals are active investors when it comes to their deposit holdings and why they hold deposits. We provide three main findings. First, we show that deposit investors are active, as they actively reduce their deposit holdings following an exogenous increase captured by unexpected inheritances. Second, following large exogeneous deposit inflows, people reallocate away from low-return deposits to higher expected-return assets, such as bonds and stocks, in line with classical deposit-demand theories. Third, people use deposits and voluntary unemployment insurance as substitutes, meaning deposits are used to insure against sudden negative income shocks.

"Double Jeopardy: Households’ Consumption Responses to Shocks in Stock and Mortgage Markets" w/ L.S. Larsen, R.S. Nielsen, J. Rangvid, October 2024.

Households reduce consumption following negative shocks to their stock holdings. Households also lower consumption following exogenous increases in mortgage debt payments. However, what happens when households face simultaneous adverse shocks in both the mortgage and stock markets, such as during the 2008 financial crisis? Using detailed Danish household data, we find that households exposed to both markets reduce consumption considerably more than households exposed to just one market. This is important, as we also demonstrate that households with high exposure to one market tend to have similarly high exposure to the other market. Finally, we find that these negative effects on consumption persist over time and discuss the underlying reasons behind our results.

Selected publications (full list in CV)

"Nonstandard Errors" w/ other members of FINCAP team, Journal of Finance, vol. 79. 2024.

Variation in results across research teams testing the same hypotheses is sizable and underestimated by the researchers. These nonstandard errors decrease with peer-review, better reproducible results, and higher rated research.

"How important is affiliation between mutual funds and distributors for fund flows" w/ B. Florentsen, P. Raahauge and J. Rangvid. Review of Finance, vol. 26, 2022.

Distributors of mutual funds (e.g., banks) exert a powerful influence on people’ decisions to buy mutual funds, dominating other explanations such as fund performance.

"#MeToo: Sexual Harassment and Company Value" w/ M. Borelli-Kjær and L. Moehl Schack. Journal of Corporate Finance, vol. 67, 2021. See coverage in Danish media (Børsen 1, Børsen 2) and Icelandic media (Fréttablaðið).

Sexual harassment in the workplace causes company market value to drop by 1.5% points and MeToo four-folds the risk of becoming embroiled in a scandal.

"Turning Local: Home-bias dynamics of relocating foreigner" w/ B. Florentsen, P. Raahauge and J. Rangvid, Journal of Empirical Finance, vol. 58, 2020. Appendix available here.

Equity home bias of foreigners increases with duration of stay, reaching the same level as that of locals in 7-8 years of relocation.

"Proximity and IPO Underpricing", w/ D. Wójcik, Journal of Corporate Finance, vol. 38, 2016.

Rural firms are less underpriced than urban firms, consistent with strong local bias in rural areas.

"Subscribing to Transparency", w/ Y. He, H. Guo and J. Yang, Journal of Banking and Finance, vol. 44, 2014.

The empirical relationship between trade transparency and liquidity is non-monotonic, explaining why transparency effects vary in existing empirical literature.

"Do Less Regulated Markets Attract Lower Quality Firms? Evidence from the London AIM market", Journal of Financial Intermediation, vol. 22 (3), 2013.

AIM listed firms are of the same quality level as firms listed on more regulated markets, albeit smaller in size.

"Stock Exchange Merger and Liquidity: The Case of Euronext", Journal of Financial Markets, vol. 12 (2), 2009.

The Euronext merger increased liquidity, but only for big and international firms.

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