Limited liability
Limited Liability and Investment: Evidence from Changes in Marital Property Laws in the U.S. South, 1840-1850, Journal of Financial Economics (2020, with Laura Salisbury)
Limited liability generates a trade-off between risk sharing and agency conflicts. Households are most likely to enter into business and invest if a moderate share of household assets is protected from creditors.
For Richer, For Poorer: Banker's Liability and Bank Risk in New England, 1867-1880, Journal of Finance (2021, with Laura Salisbury and Gurpal Sran)
Winner of Best Paper in Corporate Finance, SFS Cavalcades, 2018
Winner of Best Paper in Corporate Finance, Annual FMA conference, 2017
Bank managers with less liability take more risk. Their banks have higher leverage, delay loss recognition, make more risky and fraudulent loans and perform worse in a crisis. This is not counteracted by depositors.
Shareholder Liability and Bank Failure, R&R Journal of Finance (with Felipe Aldunate, Dirk Jenter and Arthur Korteweg)
Banks with additional liability for owners are less likely to become distressed during the Great Depression.
Going for Broke: Bank Reputation and the Performance of Opaque Securities R&R Journal of Finance (with Abe de Jong and Tim Kooijmans)
Bank reputation improves the quality of opaque off-balance sheet securities, but only if bankers have personal exposure to their banks' possible reputational losses.
Asset pricing
The boats that did not sail: asset price volatility in a natural experiment, Journal of Finance (2016)
Amundi Smith Breeden Distinguished Paper
Stock prices immediately incorporate new information. They still move substantially in the absence of news in response to informed trades and liquidity shocks.
Those who know most: insider trading in 18th c. Amsterdam, Journal of Political Economy (2015)
Insiders trade strategically on their private information, taking into account when their information advantage expires.
Leverage and beliefs: personal experience and risk taking in margin lending, American Economic Review (2016, with Hans-Joachim Voth)
Lenders in margin loans are less willing to provide leverage if they personally experienced defaults, even if they did not lose any money.
Individual Skill and Market Liquidity: Evidence from the Removal of Jewish Market Makers in WWII (with Hans-Joachim Voth)
Market makers' skill is infungible, at least in the short run. By detecting informed trades, they reduce adverse selection.
Four centuries of return predictability, Journal of Financial Economics (2018, with Benjamin Golez)
Over the last four centuries, the dividend-to-price ratio has consistently predicted returns, confirming that expected returns are time-varying.
Equity Duration and Predictability (with Benjamin Golez), R&R Journal of Financial Economics
The relative importance of expected returns has increased after WWII. This is related to the increased duration of the stock market as a whole.
Household finance
The Mortgage Piggybank: Building Wealth through Amortization, Accepted, Quarterly Journal of Economics (with Asaf Bernstein)
Forcing households to increase mortgage amortization (debt repayment) increases labor market participation and reduces consumption, thereby stimulating wealth accumulation.
Marrying for Money: Evidence from the First Wave of Married Women's Property Laws in the U.S. (with Laura Salisbury)
Protecting a wife's assets from her husband and his creditors increases assortative mating in the marriage market, especially for couples who benefit from more limited liability.
Financial history
Plantation Mortgage-Backed Securities: Evidence from Surinam in the 18th Century, Journal of Economic History (2023, with Abe de Jong and Tim Kooijmans)
Merchant bankers played a key role in intermediating capital between the Dutch Republic and slave plantations in Surinam. Apart from resolving asymmetric information and agency conflicts, they also stimulated a credit boom which resulted in a protracted depression.
The Plantation Economy of Suriname in the 18th Century, forthcoming chapter in Felipe Valencia Caicedo (Editor), Roots of Underdevelopment: A New Economic (and Political) History of Latin America and the Caribbean (with Abe de Jong and Tim Kooijmans)
Description of the development of the colonial plantation economy of Suriname under Dutch rule with an emphasis on the second half of the 18th century.