The Long-term Effects of Inflation on Inflation Expectations
with Fabio Braggion, Nic Schaub, and Michael Weber
NBER Working Paper No. 32160
CEPR Discussion Paper No. 18936
University of Chicago Becker Friedman Institute for Economics Working Paper No. 2023-101
CESifo Working Paper No. 11679
Revise & Resubmit Review of Financial Studies
Abstract:
We study the long-term effects of inflation surges on inflation expectations using Germany as a laboratory. Households living in areas with higher local inflation during the hyperinflation of the 1920s expect higher inflation today, even after controlling for known determinants of historical inflation and inflation expectations and despite facing similar inflation rates today. Our evidence points towards a vertical transmission of inflation experiences from parents to children and a horizontal transmission through collective memory. Differential historical inflation also modulates the updating of expectations to current inflation, the response to economic policies affecting inflation, and financial decisions. We obtain similar results for Polish households residing in formerly German areas. Overall, our findings are consistent with inflationary shocks having a long-lasting impact on attitudes towards inflation, which raises the costs of disinflationary policies by central banks.
On the program of:
Joint BoC-FRBNY-ECB-Conference on Expectations Surveys 2023, Georgia Tech – Atlanta Fed Household Finance Conference 2024, Swiss Finance Association (SGF) Meeting 2024, SFS Cavalcade North America 2024, Hyperinflation Financial History Conference, European Finance Association (EFA) Conference 2024, Central Bank Research Association (CEBRA) Conference 2024, Annual Bank of Canada Economic Conference 2024, 14th ifo Conference on Macroeconomics and Survey Data, CEPR Paris Symposium 2024, American Economic Association (AEA) Conference 2025
Coverage:
Colorado Sun, CNN, Bloomberg, Het Financieele Dagblad (in Dutch), Becker Friedman Institute Research Brief, VoxEU, SUERF policy brief
As California Goes, So Goes the Nation? Board Gender Quotas and Shareholders' Distaste of Government Interventions
with Alexandra Niessen-Ruenzi, Markus Schmid, and Steven Davidoff Solomon
European Corporate Governance Institute – Finance Working Paper No. 785/2021
Semifinalist Best Paper Award in Corporate Finance Financial Management Associate Meeting 2020
Revise & Resubmit Journal of Law & Economics
Abstract:
In 2018, California became the first U.S. state to adopt a mandatory board gender quota for all firms headquartered in the state. In 2022, it became the first U.S. state to invalidate a board gender quota. We document large negative abnormal returns to the adoption of the gender quota for California firms and large spillover effects to non-California firms. We show that director labor market frictions are not the main driver of these effects and propose a novel explanation: Shareholders’ distaste of stakeholder-friendly government interventions. Consistently, we find that more stakeholder-friendly firms, measured by their ESG scores or presence of SRI funds among their shareholder base, react more positively to the California gender quota. We also find that California and non-California firms with higher sensitivity to regulatory uncertainty react more negatively to the quota’s adoption, and more positively to its invalidation. For non-California firms, the effects are concentrated among firms in states that are likely to follow California’s legislative lead.
On the program of:
Corporate Finance Day (Erasmus) 2021, ECGI Global Corporate Governance Colloquia (Yale) 2021, American Finance Association Meeting (AFA) 2020, Financial Management Association (FMA) 2020, Paris Financial Management Conference (PFMC) 2019, American Law and Economics Association (ALEA) 2019
Coverage:
Harvard Law School Forum on Corporate Governance, Barron's, USA Today, Los Angeles Times, Deutschlandfunk Nova (in German)
Insurers' Underwriting Policies
with Olimpia Carradori and Zacharias Sautner
Swiss Finance Institute Working Paper No. 25-58
European Corporate Governance Institute – Finance Working Paper No. 1071/2025
HKU Jockey Club Enterprise Sustainability Global Research Institute Paper No. 2025/094
Abstract:
Underwriting policies have become an increasingly important tool through which insurers manage reputational risks. We study the design, determinants, implementation, and real effects of such policies in the context of coal projects. Coal underwriting policies are more common among insurers from countries with stronger climate policies and less common among specialty and unlisted insurers. Policy-adopting insurers reduce coverage of U.S. coal mines, but implementation is incomplete and heterogeneous. Other insurers replace withdrawn coverage only partly. Because insurance is legally required to operate, affected mines become more likely to be abandoned. An insurance-supply model rationalizes these patterns.
On the program of:
SFI Research Days 2025, St. Gallen Financial Economics Workshop 2025, NBER Climate Finance Conference 2025, Exeter Sustainable Finance Conference 2025, German Finance Association (DGF) 2025, Baruch-JFQA Climate Finance and Sustainability Conference 2026, Swiss Finance Association (SGF) Meeting 2026, Innovations in Sustainable Finance 2026, BIS-CEPR-Gerzensee-SFI Conference on Financial Intermediation 2026, Conference on Financial Economics and Accounting (CFEA) 2026
Coverage:
Summary by UZH Initiative in Sustainable Finance, Insurance Post, Handelszeitung (in German), Mining Magazine, Insure Our Future, Insurance Asia, Simon Oh's Better Know a Paper Podcast
More than a Late Shipment: How Supply Chain Disruptions Affect Households (draft coming soon!)
with Leandro Sanz, Paul Décaire, Michael Wittry, and Michael Weber
Abstract:
We study how supply chain disruptions affect households, in the prices they pay, the goods they can buy, and the inflation they expect, using shipping delays as a well-measured, supply-driven shock and a novel dataset for 2010--2024 that links satellite-based vessel-level delays to importing firms' barcode-level retail prices, household purchase records, and inflation expectations surveys. Shipping delays raise retail prices: an increase of one standard deviation in the share of a firm's imports arriving on delayed vessels raises prices for identical products by 0.6%, and prices remain elevated for months after individual delay events. Delays also remove products from shelves and shift the mix of products that remain available toward premium varieties, so the price of the goods that remain available increases by more than four times the same-product response. Exposed households do not exit affected product markets but shift spending toward cheaper and more familiar products, while stockouts push part of their bundles into replacement purchases. Households with more delay-exposed baskets also report higher expected inflation over the following 12 months, and although bundle composition accounts for much of this cross-sectional relationship, households whose exposure rises more also tend to revise their expectations upward. Supply-side shocks thus raise the prices households pay and change the products available to them, margins that posted-price measures alone do not fully capture.
On the program of:
American Finance Association Meeting (AFA) 2027