Annual Conference

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Investment Finance, Senior Fellows/Fellows

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May 2023

Long-term Earnings Forecasts, Managerial Distortion, and Stock Returns

Zhenghui NI, Allaudeen HAMEED, Massimo MASSA
We explain stock mispricing linked to long-term expectations of earnings growth in terms of managerial manipulation in high-growth conglomerates. Manipulation does not affect analysts’ forecasts of conglomerate earnings, which are more accurate relative to pseudo-conglomerates. The combined effect...
Keywords: overreaction, analyst forecasts, return predictability, earnings predictability, managerial manipulation, conglomerates
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Senior Fellows/Fellows

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Pandemic

Long Social Distancing

Steven J. DAVIS, Nicholas A. BLOOM, Jose Maria BARRERO
More than ten percent of Americans with recent work experience say they will continue social distancing after the COVID-19 pandemic ends, and another 45 percent will do so in limited ways. We uncover this Long Social Distancing phenomenon in our monthly Survey of Working Arrangements and Attitudes. ...
Keywords: Social distancing, infection worries, pandemic, labor force participation, potential output, college wage premium, self-assessed causal effects
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Annual Conference

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International Macroeconomics, Money & Banking, Senior Fellows/Fellows

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May 2021

Local Currency Bond Returns, Foreign Investors and Portfolio Flows in Emerging Markets

Giorgio VALENTE, Jason WU, Inhwan SO
Foreign investors play a key role in EME sovereign bond markets, in part because their portfolio flows are sensitive to bond returns and are therefore pro-cyclical in nature. This note discusses the implications of the framework proposed by So et al. (2019) which incorporates the risk that arises fr...
Keywords: Bond excess returns, Portfolio flows, institutional investors, Conditional asset pricing
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Annual Conference

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Corporate Finance, Senior Fellows/Fellows

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May 2017

Local Crowding Out in China

Yi HUANG, Ugo PANIZZA, Marco PAGANO
In China, between 2006 and 2013, local public debt crowded out the investment of private firms by tightening their funding constraints while leaving state-owned firms' investment unaffected. We establish this result using a purpose-built data set for Chinese local public debt. Private firms invest l...
Keywords: Investment, local public debt, Crowding out, Credit Constraints, China
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Annual Conference

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Economic Transformation of Asia, Senior Fellows/Fellows

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May 2016

Liquidity Rules and Credit Booms

Kinda Cheryl HACHEM, Zheng Michael SONG
China increased bank liquidity standards in the late 2000s. The interbank market became tighter and more volatile and credit soared, contrary to expectations. To explain this, we argue that shadow banking developed among Chinas small and medium-sized banks to evade the higher liquidity standards. Th...
Keywords: Liquidity regulation, Financial transformation, China
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