Banking and Financial Crises
  • Does Going Easy on Distressed Banks Help Economic Growth?
    • During banking crises, regulators often relax their normal requirements and refrain from closing financially troubled banks. I estimate the real effects of such “regulatory forbearance” during the U.S. Savings and Loan Crisis by comparing the economic outcomes of states by the amount of forbearance received. To instrument for forbearance, I exploit an historical accident that at the time of the crisis, similar financial intermediaries (‘thrifts’) could be insured by one of two different deposit insurance funds, one of which was forced to exercise greater forbearance. The evidence suggests a policy-induced increase in high risk loans, followed by a broader bust in house prices and real GDP after an official end to forbearance in 1989. Estimated magnitudes are large enough to indicate that more consistent regulatory policy could have avoided the 1990-1991 recession.
Household Finance, Mortgages, and Financial Distress
Behavioural Economics & Finance
  • Relative Price ≠ Relative Value: Context Affects Returns in Sports Betting Markets, with Andrew Meyer 
    • We test for contrast effects in sports betting markets. The evidence is consistent with bets appearing more or less attractive depending on the odds available on superficially similar - but fundamentally independent - events.
  • Compare and Contrast
    • I test for contrast effects in equity valuations and find that early valuations may be unduly affected by relative value comparisons. This leads to initial valuations which are too close to comparables, and novel predictability in the returns of IPOs.
  • Long-run Planners Live Longer, with Joe Gladstone  Submitted