The Julis-
Rabinowitz Center for Public Policy & Finance jrc.princeton.edu
2018–2019 ANNUAL REPORT
TABLE OF CONTENTS
1 LEADERSHIP: EXTERNAL ADVISORY COUNCIL 3 FACULTY: 2018–2019 CENTER AFFILIATES 5 FACULTY: RESEARCH, PUBLICATIONS AND NEWS 10 RESEARCHERS: VISITORS, FELLOWS AND POSTDOCTORAL ASSOCIATES 12
RESEARCH INITIATIVES: MACROFINANCE LAB
14
RESEARCH INITIATIVES: WORKSHOPS
15
TEACHING & LEARNING: STUDENT ASSOCIATES
19
TEACHING & LEARNING: PUBLIC POLICY AND FINANCE TRACK
20
TEACHING & LEARNING: FINANCIAL MARKETS FOR PUBLIC POLICY PROFESSIONALS
22
TEACHING & LEARNING: SELECTED COURSES
24
CENTER EVENTS: HIGHLIGHTS
26
CENTER EVENTS: CALENDAR
LEADERSHIP: EXTERNAL ADVISORY COUNCIL The Advisory Council is comprised of distinguished leaders in the financial industry, scholars and policymakers.
PHILIP BENNETT,
of Economics and a Ph.D. from the
worked at USAID. A member of the
European Bank for
University of Chicago.
Council on Foreign Relations and the Inter-American Dialogue, she also
Reconstruction and Development (EBRD). Philip Bennett
WOODY BROCK,
serves on the Boards of Trickle Up,
retired in March 2018 from his position
Strategic Economic Decisions,
Girls, Inc. and the Eurasia Group. A
as a member of the EBRD’s Executive
Inc. President and Founder
graduate of Columbia, she holds an
Committee. In that role he oversaw the
of Strategic Economic Decisions, Inc.,
Client Services Group, which comprises
Horace “Woody” Brock specializes in
the Banking and Policy & Partnerships
applications of the modern “economics
PIERRE M. GENTIN,
department, and chaired the Operations
of uncertainty” (developed by
McKinsey & Company, Inc.
Committee, which reviews all
Stanford’s Kenneth J. Arrow) to
investment proposals. He has more
forecasting and risk assessment in the
General Counsel, Pierre Gentin was a
than 30 years of experience in global
international economy and its asset
partner in the law firm of Cahill
financial markets, primarily with
markets. He has spoken publicly
Gordon & Reindel and spent nearly two
Citigroup and its predecessor
around the globe, including at the
decades at Credit Suisse. Earlier, he
companies, Salomon Brothers and
World Economic Forum in Davos and
served as an Assistant U.S. Attorney
Salomon Smith Barney. A graduate of
his articles have appeared in numerous
for the Southern District of New York.
the University of North Carolina, he
professional journals, The New York
He is a trustee of the Practising Law
holds an M.P.A. from Princeton’s
Times, and the International Herald
Institute and the Touro Synagogue
Woodrow Wilson School and an
Tribune. He holds a B.A., M.B.A., and
Foundation and is co-editor of a book
M.B.A. from the University of Chicago.
M.Sc. from Harvard University, and
on the mediation of complex financial
earned his M.A. in mathematical
services disputes. In 2008, he was
MICHAEL BORDO,
economics and Ph.D. in political
named a Young Global Leader of the
Rutgers University.
philosophy from Princeton.
World Economic Forum and has served
M.P.A. from Princeton.
Before joining McKinsey as
on the Forum’s Global Agenda Council.
Distinguished Professor of Economics and Director of the Center
JOYCE CHANG, JP
He teaches an M.B.A.-level ethics
for Monetary and Financial History at
Morgan Chase & Co.
course at the Wharton School of
Rutgers, Michael Bordo’s research
Currently Global Head of
Business. He graduated from Princeton University and Columbia Law School.
spans economic and financial history,
Research at JP Morgan, Joyce Chang
monetary economics, exchange rate
was previously Global Head of Fixed
regimes, financial crises, and
Income, Emerging Markets and Index
ROBERT A. JOHNSON,
globalization. He has been a Visiting
Research and earlier led Emerging
Institute for New Economic
Scholar at the IMF, the Federal Reserve
Markets and Global Credit Research as
Banks of St. Louis and Cleveland, the
well as Global Currency and
Johnson is Executive Director of INET
Federal Reserve Board of Governors of
Commodities Research. Prior to this,
and currently serves on the UN
the Bank of Canada, the Bank of
she was a Managing Director at BofA
Commission of Experts on International
England, and the Bank for
Merrill Lynch, Research Division, and
Monetary Reform under the
International Settlements. A graduate
Salomon Brothers, specializing in
chairmanship of Joseph Stiglitz. He is
of McGill University, he earned a
emerging markets fixed income
also the director of economic policy for
M.Sc.(Econ) from the London School
research. Before Wall Street, she
the Franklin and Eleanor Roosevelt
Thinking (INET). Robert
1
LEADERSHIP: EXTERNAL ADVISORY COUNCIL
Institute in New York. Previously, he
JOE LONSDALE, Addepar,
JEFFREY SHAFER,
managed a global currency, bond, and
Formation 8. Joe Lonsdale is
JRShafer Insight. Jeffrey
equity portfolio specializing in
CEO of Addepar, an
Shafer is the founder of
emerging markets. He served as chief
emerging leader in private wealth
JRShafer Insight, a strategic advice
economist of the Senate Banking
management technology, and is general
and consulting firm. He was formerly
Committee and senior economist of the
partner at Formation 8, which
vice chair of Citi’s Global Banking and
Senate Budget Committee. Johnson
specializes in growth technology
Senior Asia Pacific Office, under
earned bachelor’s degrees in both
investing. He is board chair for
secretary of the U.S. Treasury for
electrical engineering and economics
ONEHope Wine, co-founder and chair
International Affairs, and he held a
from MIT. He holds a Ph.D. in
of Backplane, and co-chair of Zanbato,
series of high-level positions at the
economics from Princeton.
a leader in global infrastructure fintech.
Organization for Economic Cooperation
In 2004, Lonsdale co-founded Palantir
and Development. He has also worked
MITCHELL R. JULIS,
Technologies, a developer of analysis
at the Federal Reserve Bank of New
Canyon Partners, LLC.
systems used by government and
York, the Federal Reserve Board, and
Mitch Julis is Co-Chairman
financial organizations around the
the Council of Economic Advisors.
and Co-CEO of Canyon Partners, a
world. He earned his B.S. in computer
Shafer holds a B.A. from Princeton and
leading global alternative asset
science from Stanford University.
an M.A. and Ph.D. from Yale.
management firm that specializes in credit-oriented (as well as real estate
DEAN MENEGAS,
BING SHEN, Director, Far
and emerging market debt securities)
Spinnaker Capital Group.
Eastern International Bank.
investments. Prior to forming Canyon,
General counsel for
Bing Shen serves on the
he served as a portfolio director and a
Spinnaker since its inception in 1999,
boards of four public companies and
bankruptcy and creditors’ rights
Dean Menegas oversees all legal and
one private company. Among these, he
attorney. His writing on bankruptcy
regulatory affairs for the group’s
chairs the audit committee and the
and distressed credit investing has been
business across three continents. He is
compensation committee of two
published in law journals and other
also board vice-chair of the Emerging
separate public companies. Previously,
periodicals. He received his B.A. from
Markets Trade Association and
he was President of CDIB & Partners
Princeton’s Woodrow Wilson School
president of the Princeton Association
Investment Holding Corporation,
and earned his J.D. and M.B.A. from
of the United Kingdom. He previously
which manages over $300 million
Harvard’s Law and Business Schools,
served as legal counsel to the Credit
invested in listed securities and private
respectively.
Agricole Indosuez Emerging Markets
equity. He worked for the Morgan
Division and was a corporate associate
Stanley Group in 1987–1999 and was
at Skadden Arps Slate Meagher &
Morgan Stanley’s first Chief
Flom. Menegas holds a B.A. from
Representative in Beijing, China. Prior
Princeton, an M.A. in political science
to this, he worked as an investment
from the University of Michigan, and a
officer in the International Finance
J.D. from the University of Michigan.
Corporation of the World Bank. A graduate of Princeton, he subsequently earned his M.B.A. from Harvard Business School.
2
FACULTY: 2018–2019 CENTER AFFILIATES Faculty Affiliates come from a variety of disciplines, and their research interests include macroeconomics, finance and public policy. Faculty Affiliates attend Center-sponsored events, give invited talks and participate in Center-sponsored teaching, leading to fruitful interactions both among themselves and with the Center’s visitors and student associates.
ATIF MIAN, Center
WILL S. DOBBIE, Assistant
BURTON G. MALKIEL,
Director, John H. Laporte, Jr.
Professor of Economics and
Chemical Bank Chairman’s
Class of 1967 Professor of
Public Affairs
Professor of Economics,
Economics, Public Policy and Finance*
Emeritus
OLEG ITSKHOKI, MARK AGUIAR, Walker
Professor of Economics and
ALEXANDRE MAS,
Professor of Economics and
International Affairs
William S. Tod Professor of
International Finance
Economics and Public Affairs
HAROLD JAMES, Claude YACINE AIT-SAHALIA, Otto A. Hack 1903 Professor of Finance and Economics
and Lore Kelly Professor in
ADRIEN MATRAY,
European Studies, Professor
Assistant Professor of Economics
of History and International Affairs, and Director, Program in Contemporary
NATALIE MARIE BACHAS, Assistant Professor of Economics
European Politics and Society*
NOLAN MCCARTY, Susan Dod Brown Professor
JAKUB KASTL, Professor
of Politics and Public Affairs*
of Economics
ROLAND J.M. BÉNABOU, Theodore A. Wells ‘29 Professor of Economics and Public Affairs
ALAN S. BLINDER, Gordon S. Rentschler Memorial Professor of Economics and Public Affairs*
MARKUS K. BRUNNERMEIER, Edwards S. Sanford Professor of Economics and Director, Bendheim Center for Finance*
MIGUEL A. CENTENO, Musgrave Professor of Sociology, Professor of
ASHOKA MODY, Charles and Marie Robertson Visiting
NOBUHIRO KIYOTAKI, Harold H. Helm ‘20 Professor of Economics and Banking
Professor in International Economic Policy
BENJAMIN MOLL,
HENRIK J. KLEVEN,
Professor of Economics and
Professor of Economics and
International Affairs
Public Affairs
CECILIA E. ROUSE, Dean,
ALAN B. KRUEGER,
Woodrow Wilson School of
Lynn Bendheim Thoman, Class of 1976, and Robert Bendheim, Class of 1937, Professor of Economics and Public Policy, Woodrow Wilson School*
MORITZ LENEL, Assistant
Public and International Affairs and Lawrence and Shirley Katzman and Lewis and Anna Ernst Professor in the Economics of Education, Professor of Economics and Public Affairs*
Professor of Economics
Sociology and International Affairs
* Denotes Executive Committee member.
3
FACULTY: 2018–2019 CENTER AFFILIATES
DAVID SCHOENHERR, Assistant Professor of
LEONARD WANTCHEKON, Professor
and Mary Trumbull Adams
Economics
of Politics and International
Professor for the Study of
Affairs
WEI XIONG, Hugh Leander
Investment and Financial Markets*
ELDAR SHAFIR, Class of 1987 Professor in Behavioral
ARLENE WONG,
MOTOHIRO YOGO,
Science and Public Policy;
Assistant Professor of
Professor of Economics
Professor of Psychology and Public Affairs
Economics
CHRISTOPHER A. SIMS, John F. Sherrerd ‘52 Professor of Economics
Photo: Princeton University, Office of Communications, Denise Applewhite (2017)
4
OWEN ZIDAR, Assistant Professor of Economics and Public Affairs
FACULTY: RESEARCH, PUBLICATIONS AND NEWS The Center supports research at the intersection of public policy, financial markets and the macroeconomy. Over the past year, the Center supported original work in financial economics, political economy and regulation.
FEATURED FACULTY RESEARCH NATALIE MARIE BACHAS, Assistant Professor
ATIF MIAN, Center Director, John H. Laporte, Jr. Class of 1967 Professor of Economics, Public Policy and Finance. Mian’s work explores the connections
of Economics. Bachas’ research focuses on
between finance and the macroeconomy. Building on themes
household finance, industrial organization and
raised in his 2014 book, House of Debt, with Amir Sufi, his
public economics. She received the 2017 Berkeley Department
current research uses county-level data on household borrowing
of Economics Graduate Student Award for Public Policy
and employment to look at the impact of indebtedness on labor
Research and the CPC Dissertation Prize. Her current work
allocation across geographical areas and industries. Another
includes studying the efficiency and equity implications of
strand investigates the link between household debt and
changes in the $1.3 trillion student loan market and the
business cycles worldwide and the role of credit supply shocks.
efficiency of federal loan guarantees. She earned her Ph.D. in
His research has appeared in American Economic Review,
economics from the University of California at Berkeley.
Econometrica, Quarterly Journal of Economics, Journal of Finance, Review of Financial Studies and Journal of Financial
MORITZ LENEL, Pyewacket Research Fellow,
Economics. He holds a Ph.D. in economics from MIT.
Bendheim Center for Finance 2018–2019; Assistant Professor of Economics starting July 1, 2019.
DAVID SCHOENHERR, Assistant Professor of
Lenel’s research interest are in macroeconomics and finance.
Economics. Schoenherr’s research interests include
He has been awarded the Landau Discussion Paper Prize by
financial contracting, political economy, and the
SIEPR in 2017, and the AQR Top Finance Graduate Award
interaction between law and finance. He is particularly
2017. His current research focuses on the impact of
interested in how the design of bankruptcy law affects security
variations in the quantity of safe bonds on asset prices and
prices and investors’ ex ante incentives, for example with respect
lending volume in financial markets, the relationship
to credit allocation decisions, or firms’ financing and investment
between macroeconomic policy and the price of risk, and
decisions. His work examines the role of social and political
how housing policies affect the homeownership rate. Lenel
connections on economic outcomes in different contexts, as well
holds a Ph.D. in economics from Stanford University.
as how informal labor markets affect the incentives of workers in response to changes in unemployment insurance benefits. He
ADRIEN MATRAY, Assistant Professor of
holds a Ph.D. in finance from the London Business School.
Economics. Matray studies corporate finance, entrepreneurship, innovation, and financial inclusion. One strand of research looks at aspects of financial inclusion for low-income households and minorities both in
MOTOHIRO YOGO, Professor of Economics. Yogo’s fields of expertise are financial economics, insurance, and econometrics. His current research is
the U.S. and in developing countries. A second strand
on the implications of institutional demand for asset prices and
investigates the frictions affecting entrepreneurship, SME
on risk and regulation of the insurance industry. He has
growth and technology adoption and how new technologies
published in American Economic Review, Econometrica, Journal
affect SME productivity, employment and income growth.
of Political Economy, Journal of Finance, Journal of Financial
Ongoing work (with Johan Hombert) studies how different
Economics and Review of Financial Studies. Recognition for his
type of asset bubbles (technological bubbles versus house
work includes the Richard A. Crowell Memorial Prize, the
prices bubbles, for instance) affect worker allocation and can
Roger F. Murray Prize and the Zellner Thesis Award. He
distort the economy. Matray earned his doctorate from HEC
earned his doctorate from Harvard and was a research
Paris.
economist at the Federal Reserve Bank of Minneapolis.
5
FACULTY: RESEARCH, PUBLICATIONS AND NEWS
BOOKS
SCHOLARLY PAPERS
ASHOKA MODY’s book Euro Tragedy: A
ATIF MIAN’s work with Amir Sufi was recently published
Drama in Nine Acts was listed among the five best
in the Journal of Economic Perspectives. The paper, “Finance
business and economics books of 2018 by The
and Business Cycles: The Credit-Driven Household
Economist. It was also chosen by both Foreign
Demand Channel,” answers the question “What is the role
Affairs and The Financial Times as one of the best books of
of the financial sector in explaining business cycles?” The
2018. The book is a comprehensive and authoritative history
specific idea put forward in the article is that expansions
of the euro. The Economist says the book “laments the
in credit supply, operating primarily through household
intellectual failures present at the foundation of the single
demand, have been an important driver of business cycles.
currency area and in the mishandling of the response to the
The authors call this the credit-driven household demand
sovereign-debt crisis after 2010.”
channel. They conclude that while the channel helps explain the recent global recession, it also describes economic cycles
E. GLEN WEYL’s book Radical Markets,
in many countries over the past 40 years.
Uprooting Capitalism and Democracy for a Just Society, written with Eric A. Posner, was also in
ADRIEN MATRAY’s paper “Can Innovation Help U.S.
The Economist’s five best business and economics
Manufacturing Firms Escape Import Competition from
books for 2018 and one of Bloomberg Businessweek’s
China,” joint work with Johan Hombert, was published in
“Bloomberg 50” Icons of 2018. Many blame today’s
the Journal of Finance. The paper analyses whether R&D-
economic inequality, stagnation and political instability on
intensive firms are more resilient to trade shocks. It finds that
the free market. The solution is to rein in the market, right?
while rising imports from China lead to slower sales growth
Radical Markets turns this thinking—and pretty much all
and lower profitability, these effects are significantly smaller
conventional thinking about markets, both for and against—
for firms with a larger stock of R&D (by about half when
on its head.
moving from the bottom quartile to the top quartile of R&D).
ALAN BLINDER’s book Advice and Dissent,
MOTOHIRO YOGO’s paper with Ralph Koijen of NYU
Why America Suffers When Economics and Politics
Stern, “A Demand System Approach to Asset Pricing”
Collide discusses the crucial cultural divide that
is forthcoming in the Journal of Political Economy. The
separates economic and political civilizations.
authors develop a model with flexible heterogeneity in asset
Blinder shows how both sides can shrink the yawning gap
demand across investors, designed to match institutional
between good politics and good economics and encourage
and household holdings. Using U.S. stock market data, they
the policies America so desperately needs.
illustrate how the model could be used to understand the role of institutions in asset market movements, volatility and
MARKUS BRUNNERMEIER and HAROLD JAMES’ acclaimed book The Euro and the Battle
predictability.
of Ideas was translated to Chinese, German,
DAVID SCHOENHERR’s paper “Political Connections and
Italian, Spanish and Ukrainian.
Allocative Distortions,” published in the Journal of Finance, uses data from Korea to examine the effects of government procurement contracts being influenced by firms’ political connections. Schoenherr’s paper “Rent Seeking in Elite
6
FACULTY: RESEARCH, PUBLICATIONS AND NEWS
Networks” with Rainer Haselmann and Viikrant Vig was published in the Journal of Political Economy. Using a unique
NEWS
data set on members of an elite service club in Germany, the
NEW FACULTY AFFILIATES
authors investigate how social connections in elite networks
Natalie Marie Bachas is an Assistant Professor at Princeton
affect the allocation of resources.
University.
ERNEST LIU’s work with ATIF MIAN and Amir
Moritz Lenel is the Pyewacket Research Fellow, Bendheim
Sufi entitled “Low Interest Rates, Market Power, and
Center for Finance and will be Assistant Professor of
Productivity Growth” examines how the production side of
Economics starting July 1, 2019.
the economy responds to a low interest rate environment. The paper shows that low interest rates encourage
Owen Zidar is Assistant Professor of Economics and Public
concentration by giving industry leaders a strategic
Affairs and a research fellow at the National Bureau of
advantage over followers. The work was reported in The
Economic Research.
Wall Street Journal. Liu’s paper “Industrial Policies in Production Networks,” uses production network theory
PROMOTIONS
to understand industrial policies. He finds that there is a
Benjamin Moll was promoted to Professor of Economics
strong incentive for a well-meaning government to subsidize
and International Affairs. His research lies at the intersection
upstream sectors. He develops a sufficient statistic that
of macroeconomics and development economics.
predicts the sectors targeted by government interventions in South Korea in the 1970s and in modern day China. A
AWARDS
summary of the paper appeared in VoxDev.
Mark Aguiar and Leonard Wantchekon were elected as
KARSTEN MÜLLER with co-author Carlo Schwarz has investigated the link between social media and hate crime using Facebook and twitter data. The paper, “Fanning the Flames of Hate: Social Media and Hate Crime,” studies the rise of anti-refugee sentiment in Germany. A related paper, “Making America Hate Again? Twitter and Hate Crime Under Trump,” focuses on hate crimes in the U.S. using twitter data. This work has been widely cited in the press including The New York Times, The Guardian, The Economist and Financial Times. Another strand of Müller’s recent work looks at the political economy of finance. The paper “Electoral Cycles in Macroprudential Regulation” finds a robust and sizable electoral cycle in the use of macroprudential tools around 212 elections in 58 countries over the 2000–2014 period. In the paper “Busy Bankruptcy Courts and the Cost of Credit,” Müller finds that the efficiency of legal enforcement is an important factor for
Fellows of the Econometric Society. Alexandre Mas was named the William S. Tod Professor of Economics and Public Affairs. Benjamin Moll won the 17th Edition of the Bernácer Prize, awarded annually to European economists under the age of 40 who have made outstanding contributions in the fields of macroeconomics and finance. Moll also won, together with Greg Kaplan and Gianluca Violante, the award for economics in central banking for the paper “Monetary Policy according to Hank.” The work adds to the realism of core economic models by allowing for differences in households’ liquid and illiquid assets. Roland Bénabou was elected to the Institute de France, Académie des Sciences Morales et Politiques.
credit spreads and contract maturities.
7
FACULTY: RESEARCH, PUBLICATIONS AND NEWS
AFFILIATES IN THE NEWS
Markus Brunnermeier
Alan Blinder
Nobuhiro Kiyotaki
zzAlibaba initiates the open research
zzFederal Reserve chair Powell ’75
zzTrade war poised to roil global finance: Debt-burdened Japan needs fiscal reform to stave-off “collapse” — Nikkei Asian Review
Atif Mian zzHow low interest rates can freeze the economy — The Wall Street Journal zzWhat’s got U.S. inflation so depressed? Just asking for the Fed — Bloomberg zzLow rates can harm productivity — Central Banking zzWeak economic growth? Blame the Polar Vortex — Barron’s zzNegative rates would have speed up
clashes with Trump — The Daily
— PRNewswire
Princetonian
zzDilip José Abreu: an elegant and creative economist — livemint zzGhosts of history: Lessons for US-China trade war — livemint zzPreventing the next housing crisis — DSnews zzBitcoin has taught us many lessons on financial bubbles — The National zzEurobonds of mistrust — Financial Times zzEuropean union and divisions — La Vie des idées zzPulling rabbits out of hats: How a
economic recovery, Fed Paper Says
decade of crisis changed economics
— The Wall Street Journal
— Jacobin
zzFixing Pakistan’s financial woes — Dawn zzThe real engine of the business cycle — Project Syndicate zzAn alternative view of boom and bust cycles — Barron’s zzCredit expansion is the real cause of booms and busts — MarketWatch zzFinancial panic and credit disruptions in the 2007-09 crisis — Brookings
8
platform “Luohan Academy”
Harold James zzThe ghosts of Versailles — Project Syndicate zzItaly’s writing on the wall — Project Syndicatee zzThe ghost of Brexit past — Project Syndicate zzWhat Lehman Brother’s failure means today — Project Syndicate zzThe beginning of the end of Britain’s Brexit fantasy — Foreign Policy
zzThe Free Trade Paradox — Foreign Affairs zzAdvice and Dissent, by Alan Blinder — Financial Times zzWhy politicians and economists often don’t get along — The Washington Post zzEx-Fed vice chair Blinder to Trump: Hiking rates gradually from historic lows won’t choke economic growth — CNBC zzAlan Blinder on how bad economics so often makes for good politics — American Enterprise Institute zzIs the Phillips Curve Dead? And other questions for the Fed — The Wall Street Journal
Will Dobbie zzBlack and white bail judges show bias against black defendants — Journalist’s Resource zzMost Americans can’t catch the same kind of cash bail breaks as Harvey Weinstein — Thinkprogress
Henrik Kleven zzHow Econ went from Philosophy to Science — Bloomberg Opinion
FACULTY: RESEARCH, PUBLICATIONS AND NEWS
Alan Krueger
Ashoka Mody
zzA debt crisis is coming. But
zzThank goodness British governments
don’t blame entitlements. — The
were too cowardly to take the UK
Washington Post
into the euro — Independent
zzThe Freedom to Leave — Center for American Progress zzCorporate America is Suppressing Wages for Many Workers — The New York Times zzFor women who attend elite colleges, pay and marriage have ups and downs — The Washington Post
zzLagging: Ireland below European average when it comes to research
zzYes, you can outmuscle Chinese imports through Innovation and R&D — Forbes
zzHow the shutdown might end, according to game theory — PBS NewsHour zzMidterms 2018: A Divided Congress — Yahoo Finance
zzIt’s hard to short crypto — and that’s propping up prices, study finds — coindesk
Motohiro Yogo
— Independent
zzWhy annuities may be safer than
zzAngela Merkel’s Tragedy — Project Syndicate
Benjamin Moll Kaplan, Benjamin Moll and Gianluca Violante — Central Banking
Leonard Wantchekon zzIt ended in 1767, yet this experiment
Nolan McCarty
the 2008 crisis — Bloomberg Opinion
and development spending
zzEconomics in central banking: Greg
Adrien Matray
zzWhat economists still don’t get about
is still linked to higher incomes and education levels — The Washington Post (wonkblog)
you think — The Wall Street Journal (blog)
Owen Zidar zz“Working rich” prevail among today’s top earners — phys.org
VIDEO PRESENTATIONS zzNobel Symposium — Atif Mian on “The Credit Driven Household Demand Channel” zzNobel Symposium — Markus Brunnermeier on ”Leverage and Cycles”
Wei Xiong zzAlibaba Initiates the Open Research Platform “Luohan Academy”
zzNobel Symposium — Nobu Kiyotaki on “Inside Money and Liquidity”
— Newswire
9
RESEARCHERS: VISITORS, FELLOWS AND POSTDOCTORAL ASSOCIATES The Center hosts outstanding researchers and practitioners at any career stage working at the intersection of finance and public policy. Researchers join the Center as Postdoctoral Research Scholars, Visiting Fellows, or Graduate Exchange Students.
DONAL BYARD, Lecturer
Relations. He is an Associate Fellow of
which are the most relevant constraints
in Economics. Donal Byard is
Ezra Stiles College, Yale University and
they face and what is the optimal
a Professor of Accounting at
a Chazen Professional Fellow at
design of local financial institutions
Columbia Business School.
(i.e., central bank discount rates,
Baruch College, City University of New
interbank markets, liquidity
York (CUNY). He earned a Ph.D. in accounting from the University of
DANA FOARTA, Visiting
management technology, financial
Maryland and specializes in teaching
Research Scholar. Dana
regulation, deposit insurance, etc).
financial accounting. His research has
Foarta is Assistant Professor
been published in journals such as the
of Political Economy at the Stanford
ERNEST LIU, Postdoctoral
Journal of Accounting Research, The
Graduate School of Business. Her
Research Associate. Ernest
Accounting Review and Contemporary
research examines the links between
Accounting Research; he also serves on
political economy and financial
Research Associate in the Julis-
the editorial advisory board for a
regulation. It focuses on the
Rabinowitz Center for Public Policy &
number of accounting academic
coordination of government policies
Finance at the Woodrow Wilson School
journals. In 2008–2009, he served as
within banking unions, on the links
and at the Simpson Center in the
an academic fellow in the Chief
between local and supranational
Economics Department. He studies the
Accountants Office of the U.S.
regulation and the design of regulatory
implications of weak financial
Securities and Exchange Commission.
institutions. Her current work examines
institutions for economic growth,
information transmission between
allocation of resources, and economic
JEAN-CHRISTOPHE DE SWAAN, Lecturer in
regulators and its implications for the
development. He has done work that
structuring of regulatory institutions.
uses production network theory to
Economics. Jean-Christophe
Dana received her Ph.D. in economics
understand industrial policies,
de Swaan is a lecturer in the Economics
from MIT and her B.A. in economics
specifically the strong government
Department at Princeton University.
and mathematics from Amherst
support for upstream industries that are
He teaches courses on ethics in finance
College.
widely adopted in developing economies. His other work shows how
and Asian capital markets, and acts as a faculty adviser to freshmen and
NICOLA LIMODIO,
low long-term interest rates encourage
sophomore students. He also teaches at
Visiting Fellow. Nicola
market concentration and slow down
Limodio is a Visiting Fellow
productivity growth; how financial
the Judge Business School at the
10
Liu is a Postdoctoral
University of Cambridge. He is a
at the Economics Department and the
market imperfections not only distort
Partner at Cornwall Capital, a multi-
Julis-Rabinowitz Center for Public
economic allocations via
strategy global investment fund based
Policy & Finance at Princeton
underinvestment, but may have much
in New York. He received his B.A.
University. He received his Ph.D. in
amplifying effects due to the
from Yale University in Political
economics from LSE and joined the
interactions across economic sectors or
Science, an MPhil in International
Finance Department of Bocconi
because the relationships between
Relations from the University of
University in 2017. His research
borrowers and lenders create
Cambridge, and a master’s in Public
focuses on banking, corporate finance
underdevelopment traps. He received
Policy from Harvard University’s
and development economics. He is
his Ph.D. in economics from MIT.
Kennedy School of Government. He is
particularly interested in researching
a Member of the Council on Foreign
the role of banks in emerging markets,
RESEARCHERS: VISITORS, FELLOWS AND POSTDOCTORAL ASSOCIATES
KARSTEN MÜLLER,
mechanisms to create a richer and more
Postdoctoral Research
equal society. He is Founder and
CARL CHRISTIAN KONTZ is a Senior
Associate. Karsten Müller’s
Chairman of the RadicalxChange
Research Specialist at the
research focuses on finance,
Foundation, as he continues his
Julis-Rabinowitz Center for Public
macroeconomics and political economy.
research as Principal Researcher at
Policy & Finance. He joined the center
One line of his work addresses the
Microsoft Research New York City. He
in July 2018. Prior to this, he
causes and consequences of the
earned his A.B., M.A. and Ph.D. in
completed a M.Sc. in International
allocation of credit in the economy.
economics at Princeton. He spent three
Trade, Finance, and Development at
Using novel historical data, he has
years as a Junior Fellow at the Harvard
the Barcelona Graduate School of
documented a striking shift in lending
Society of Fellows and three years as an
Economics and a B.Sc. in economics
away from firms towards households all
Assistant Professor at the University of
from the University of Hamburg. He
over the globe. He has also shown that
Chicago before joining Microsoft
previously worked with BDO and as a
the types of financial regulations put in
Research. He is a Sloan Research
research assistant with the University
place after the financial crisis of 2007–
Fellow 2014-2019.
of Hamburg. His research interests lie in macroeconomics, finance and
2008 are subject to powerful electoral cycles. He has also studied the effects of inefficient bankruptcy courts and banking deregulation on credit
PRE-DOCTORAL RESEARCHERS
contracts in the U.S. His second stream
NICOLAS ANDREOULIS
of research—focusing on social media,
is a Senior Research
populism and hate crime—has been
Specialist at the Julis-
featured widely in international news
Rabinowitz Center for Public Policy &
outlets. Müller earned his Ph.D. in
Finance. He holds an M.Sc. in
business and management from the
economics from University College
University of Warwick.
London. He has been especially interested in econometrics and
E. GLEN WEYL, Visiting Research Scholar. Glen Weyl’s work draws on ideas from political economy to develop social technology for widely shared prosperity and social cooperation. His recent book with Eric A. Posner, Radical Markets:
macroeconomics, with a particular focus on the impact evaluation of macroeconomics policies. Before coming to Princeton, he worked as a research and teaching assistant at the London School of Economics and the Institute of Fiscal Studies.
growth.
JULIO ROLL is a Senior Research Specialist at the Julis-Rabinowitz Center for Public Policy & Finance. Prior to joining the center, he received a master’s in economics at the University of Chicago. He also holds a bachelor’s degree in economics from the University of Lyon II, a bachelor’s in Mechanical Engineering from the Polytechnic School of the University of São Paulo, and a master’s in Mechanical Engineering from the École Centrale de Lyon. He also worked at Goldman Sachs for one year in São Paulo. His research interests are
Uprooting Capitalism and Democracy
primarily in macroeconomics,
for a Just Society, ties together much of
innovation and finance.
his recent work on using market
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RESEARCH INITIATIVES: MACROFINANCE LAB The Center provides funding and support for faculty, postdoctoral associates, visiting scholars and doctoral students doing research at the intersection of macroeconomics, finance and public policy.
A
n initiative of the Julis-Rabinowitz Center, the Macrofinance
Lab (macrofinance.princeton. edu) is dedicated to the study of the connections between finance and the macroeconomy. The lab encourages employing advanced micro-empirical techniques and microeoconomic data sets to test economic models in order to answer fundamental questions about the interaction of finance and the macro economy. The lab brings together faculty, postdoctoral researchers, graduate and undergraduate students to collaborate on macrofinance empirical projects. It supports student research from its conceptual/idea stage to publishable product, which includes zzconvening regular informal research brainstorming/early ideas meetings (twice per semester) zzfacilitating access to data sources by exploiting the lab’s connections with outside institutions (e.g., Central Banks) zzfunding summer research, data acquisition and conference travel cost for students zzmatching advanced graduate students with qualified undergraduate research assistants
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Photo: Princeton University Office of Communications
RESEARCH INITIATIVES: MACROFINANCE LAB
DISSERTATION FELLOWS 2017–2018 NAME
PROJECT
DATASET
Terry Moon
Capital Gains Tax, Investments, and CEO Incentives
Financial, accounting, and ownership data for publicly traded and private firms in Korea
Emil Verner
Household Debt Revaluation and the Real Economy: Evidence from a Foreign Currency Debt Crisis
Hungarian individual level credit bureau data, firm level credit bureau data, employeremployee data
Julia Fonseca
Interest Rates, Credit Access, and Repayment: Evidence from Peer-to-Peer Lending
NY Federal Reserve Consumer Credit Panel
Julia Fonseca
Access to Credit and Financial Health: Evaluating the Impact of Debt Collection
NY Federal Reserve Consumer Credit Panel
Yann Koby
Low in Japan
Corporate financial data on Japan’s banks
Christian Wolf
Effects of Direct Investment Stimulus in a Financial Recession
Microlevel firm data
Monetary Policy Shocks and the Banking System
Household and bank microdata for the US
Yann Koby & Christian Wolf
AFFILIATED FACULTY, RESEARCHERS AND STUDENTS FACULTY
POSTDOCTORAL RESEARCHERS
PH.D. STUDENTS
Natalie Marie Bachas
Ernest Liu
Patrick Agte
Yann M. Koby
Moritz Lenel
Karsten Müller
Francisco Cabezon
Terry Moon
Adrien Matray
Juan Manuel Castro
Daniel Morrison
Atif Mian
Julia Fonseca Duarte
Don Noh
David Schoenherr
Abhishek Gaurav
Shumiao Ouyang
Arlene Wong
Faizaan Kisat
Christian K. Wolf
Binyamin Kleinman
Kecy Wu
Thomas Kroen
Fangyuan Yi
Kwok Hao Lee
Haiyue Yu
Dake Li
Jason Zhang
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RESEARCH INITIATIVES: WORKSHOPS
ECONOMIC HISTORY WORKSHOP A new initiative of the Julis-Rabinowitz Center, the
FINANCIAL ECONOMICS OF INSURANCE WORKSHOP
Economic History Workshop (ehw.princeton.edu) at
The inaugural Financial Economics of Insurance Workshop
Princeton University is a monthly seminar series dedicated
(insurance.princeton.edu) took place at Princeton
to the study of economic history. Co-sponsored by the
University on June 8–9, 2018. The goal of the workshop
Department of History, the workshop provides an open
is to highlight the importance of the insurance sector
forum for faculty, scholars, and students to discuss research,
(outside of health) and to develop a unifying framework
ideas, and historiographical methodologies within the field
to think about supply and demand in insurance markets.
of economic history, broadly construed.
The workshop is for Ph.D. students, and attendance was by invitation only. Thirty-three students from 11 top universities from all over the United States participated in
AFFILIATED FACULTY Jeremy Adelman, Henry Charles Lea Professor of History
the workshop. The workshop will be held again next year. Funding is provided by the National Science Foundation and the Bendheim Center for Finance.
Leah Boustan, Professor of Economics Harold James, Claude and Lore Kelly Professor in European Studies; Professor of History and International Affairs Michael Bordo, Professor of Economics and Director of the Center for Monetary and Financial History at Rutgers University (external)
AFFILIATED STUDENTS Lianne Hewitt, Coordinator
Robert Yee, Coordinator
Zehra Ahmed
Lukas Althoff
Friedrich Asschenfeldt
Adhitya Dhanapal
Jack Guenther
Peter Koczanski
Robert Konkel
Pablo Pryluka
Jonathan Raspe
Neel Thakkar
Peng Wang
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AFFILIATED FACULTY Motohiro Yogo, Professor of Economics, Princeton University Ralph S. J. Koijen, AQR Capital Management Professor of Finance and Fama Faculty Fellow, University of Chicago, Booth School of Business
TEACHING & LEARNING: STUDENT ASSOCIATES The Julis-Rabinowitz Center for Public Policy & Finance’s Student Associates program for undergraduates and graduate students fosters collaboration between students and faculty in order to enhance learning and research about financial markets.
T
his year, the Center’s Student Associates program drew
and the FCC Commissioner), Central Bankers (the President
close to 65 undergraduates and 10 graduate students,
of the Cleveland Fed) and financial industry leaders
who enjoyed unparalleled opportunities to interact with
(sanctions finance panel).
center-affiliated faculty, contribute to research, and meet high-profile speakers and visitors from the government,
In 2018 the Center funded five undergraduates to pursue
academia, and industry. While the majority of associates are
summer internships, two of the students were undergraduate
economics majors, a number come from other disciplines
associates. Tiger Gao worked with a team of economists on
including chemical engineering, history, politics, operations
a range of topics including the stability of the Eurozone and
research, and public and international affairs (WWS).
the influence of immigration on extreme voting. Luca Rade,
With the Center’s support, associates invite speakers, hold workshops, and initiate research projects related to financial markets, macrofinance, macroeconomics, and public policy. Over the past year, the associates invited seven speakers at four events, organized a conference on Global Governance U.S.-China, developed a podcast show, held a mentoring event, organized three lunch time informal discussions and pursued independent research and summer internships in the public and non-profit sectors. The Associates brought to campus prominent government officials (the SEC Chairman
attended the Santa Fe Institute’s Complex Systems Summer School to learn the fundamentals and practice of complex systems scholarship. The podcast Policy Punchline founded by undergraduate associates with Center support aims to promote policy-related discussions with scholars, policy makers, business executives and entrepreneurs across all fields. The first episodes feature interviews with Center-invited speakers including Christopher Marks *96, Bill Janeway ’65, Matthias Thiemann, Glen Weyl ’07 and Ashoka Mody.
Student associates, faculty, researchers and staff at the Center’s end-of-year lunch.
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TEACHING & LEARNING: STUDENT ASSOCIATES
CURRENT UNDERGRADUATE ASSOCIATES Bassam J. Alalawi ‘19
David Garfunkel ‘20
Reed Melchionda ‘19
Brandon Tan ‘19
Sarel B. Anbar ‘21
Nicholas Garvey ‘20
Brandon M. Mintzer ‘20
Ricardo Talini Lapi, ‘21
George H. Baughan ‘21
George Grealy ‘19
Emiri Morita ‘21
Sophia E. Taylor ‘20
Jacob Berman ’20 (Vice-Chair)
Eric Guerci ‘21
Maharan Murshed ‘21
Stephanie Hu ‘21
Mouhamed Ndiaye ‘22
Charles H. Thompson ’21 (Events Director)
Rohan Joshi ‘21
Scott R. Newman ‘21 Max W. Parsons ‘20
Adam Chang ‘20
Abhiram Karuppur ’19 (Chair)
Hamza Chaudhry ‘19
Ethan Katz ‘21
Audrey Cheng ‘20
Blaykyi Kenyah ‘19
Will Crawford ‘20
Ian Kim ‘19
Allen Dai ‘22
Julie E. Kim ‘21
Kiara V. Rodriguez Gallego ‘19
Leland Domaratzky ‘22
Sean Kim, ‘21
Eitan Sapiro-Gheiler ‘19
Mohammed K. Elzubeir ‘22
Tom W. Kingori ‘19
Samantha Shapiro ‘21
Marina T. Finley ‘19 (Undergrad Mentor)
Jonathan Lam ‘20
Rebecca Sobel ‘19
Jean (Yoon Jee) Lee ‘19
Caleb South ‘20
Brandon S. Lee, ‘19
Bradley Spicher ‘20
Sophia Lewandrowski ‘22
Gabriel D. Swagel ‘19
Roxana Biglari ‘20 William Chamberlain ‘21
Miaokuan (Tiger) Gao ’21 (Outreach Director)
Luca T. Rade ‘19 Andre Radensky ‘21 Nicholas Ritter ‘20
Tammy Tseng ‘19 Christopher Walton ‘21 Cathy Wu ‘21 Jason Xu ‘20 Cara Yi ‘19 Alis Yoo, ‘19 Kevin Yu ’20 (Director of Special Projects) Kyle J. Zelenitz ‘21 Eric Zhao ‘20 Julia M. Zielczynska, ’19 (Vice-Chair)
2018–2019 GRADUATE ASSOCIATES
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Patrick T. Brown, MPA-Domestic Policy
Alex Kaufman, MPA-Economics & Public Policy
Anthony Chase, MPA-Domestic Policy
Paul Nix, Ph.D. Student, WWS
Pat W. Farrell, MPA-Economics & Public Policy
Bunmi Otegbade, MPP-Economics & Public Policy
Joelle Gamble, MPA-Economics & Public Policy
Brody Viney, MPA-Economics & Public Policy
Liane M. Hewitt, Ph.D. Student, History Department
Robert A. Yee, Ph.D. Student, History Department
TEACHING & LEARNING: STUDENT ASSOCIATES
UNDERGRADUATE ASSOCIATES CLASS OF 2018 Idir Aitsahalia** (Economics)
Benjamin Lei (Economics)
Brandon Tan*** (Economics)
Sara Diressova+ (Economics)
Sam Maeglin** (Politics)
Benjamin J. Tso *+ (Economics)
Christina Huang***+(Computer Sciences)
Vishan Nigam*** (Economics)
Diego Vives*+ (Economics)
Shriya Sekhsaria***+ (Psychology)
Gavin Zhang**+ (Economics)
Bryce Keller (Economics)
Benjamin Sender***+ (Economics) *** Highest Honors, ** High Honors, *Honors, +Certificate of Finance
PRIZES AND AWARDS WINNERS Edward E. Jones Memorial Prize: Graduating student whose senior thesis is judged to be the most outstanding work in social psychology, broadly construed. Winner: SHRIYA SEKHASARIA (Advisor: Emily Pronin)
Howard Crosby Warren Senior Prize in Psychology: Senior concentrators in psychology selected by the department as the most worthy recipients on the basis of scholarly attainment and good character. Winner: SHRIYA SEKHASARIA (Advisor: Emily Pronin)
Halbert White ’72 Prize in Economics: Most outstanding senior economics major, as evidenced by excellence in departmental coursework, and creativity in the junior papers and senior thesis.
John Glover Wilson Memorial Award: The best thesis on international economics or politics. Winner: DIEGO VIVES (Advisor: Chris Sims)
Winner: BRANDON TAN (Advisor: Leah Boustan) Undergraduate Research Forum: Awarded annually to the five best senior thesis in economic policy. Winner: GAVIN ZHANG (Advisor: Iqbal Zaidi)
HONOR SOCIETY: PHI BETA KAPPA
HONOR SOCIETY: SIGMA XI
Brandon Tan
Christina Huang
Shriya Sekhasaria Vishan Nigam
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TEACHING & LEARNING: STUDENT ASSOCIATES
CLASS OF 2018 UNDERGRADUATE THESES
Economy of Structural Change and Urbanization.
A requirement for a bachelor of arts is the senior thesis
VISHAN NIGAM, Advisor: Henrik Kleven. Local
which provides Princeton students the opportunity
Immigration Enforcement and Police Behavior at Traffic
to develop their scholarly interest and to evolve as
Stops: Evidence from the Texas Highway Patrol.
SAM MAEGLIN, Advisor: John Londregan. The Political
independent thinkers. The students work one-on-one with a faculty member who guides them through the process. Undergraduate Associates of the class of 2018 researched a wide variety of topics in their theses ranging from the effects of quantitative easing, the consequences of local immigration enforcement and police behavior, the impact of unionization, to the effects of creating memory jars. The topics reflect the varied interests of this exceptional group of young thinkers who are soon to enter careers in finance or public policy, launch their own startup or continue their studies in law or pursue Ph.D.s in economics.
IDIR AITSAHALIA, Advisor: Jakub Kastl. Low Fares Done Wright: Airline Responses to Low-Cost Entry Following Regulatory Changes.
SARA DIRESSOVA, Advisor: Chris Sims. Vector Autoregressive Modeling of Interest Rate Shocks on Bank Balance Sheets: A Comparative Study.
BRYCE KELLER, Advisor: Giorgia Barboni. The Effect of an Aging Population on the Labor Force Participation of Women in the United States.
BENJAMIN LEI, Advisor: Kelly Noonan. Population Control in China: The Effect of Regional Variations in One-Child Policy Enforcement on Parental Investment in Children.
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SHRIYA SEKHASARIA, Advisor: Emily Pronin. Let’s Start with Forever: Counterintuitive Effects of Writing and Reading Own and Others’ Memories.
BEN SENDER, Advisor: Harold T. Shapiro. Predicting the Accuracy of Earnings Forecasts Using Machine Learning.
BRANDON JOEL TAN, Advisor: Leah Boustan. The Impact of Unionization on Industry Adoption of Labor Saving Technologies: A Machine Learning Approach.
BENJAMIN J. TSO, Advisor: Nobuhiro Kiyotaki. Investigating Abe’s Third Arrow: The Effect of Japanese Corporate Governance on Firm-Level TFP and Company Performance.
GAVIN ZHANG, Advisor: Iqbal Zaidi. Bayesian Estimation of a Medium-Scale DSGE Model of China.
TEACHING & LEARNING: PUBLIC POLICY AND FINANCE TRACK Through the Bendheim Center for Finance, undergraduates in any department may earn a certificate in finance. Knowledge of modern finance complements many other topics in economics and public policy, including exchange rates and international capital flows, monetary and fiscal policy, the role of financial reform in developing and transition economies, regulation and taxation, and anti-trust policy.
N
ow in its 20th year, the Undergraduate Certificate in Finance offers students majoring in any department
the opportunity to demonstrate their proficiency in the discipline. Eighty students earned certificates in the Class of 2018. Currently there are 65 juniors and 95 seniors
PUBLIC POLICY AND FINANCE TRACK AT A-GLANCE ECO361: Financial Accounting
enrolled in the program. About 75 percent of the students
ECO491: Cases in Financial Risk Management
are drawn from the economics and the operations research
ECO492: The Rise of Asian Capital Markets
departments.
ECO493: Financial Crises
Students can opt to follow the public policy and finance
WWS340: Psychology of Decision Making/Judgment
track which was introduced in 2014–2015. The track focuses
WWS466: Financial History
on the interaction between finance and policy, including
WWS582f: Topics in Economics – House of Debt: Understanding Macro & Financial Policy
public finance, responses to financial crises, central banking, and regulation. The certificate has four requirements:
REQUIRED CORE COURSES FOR ALL CERTIFICATE PROGRAM PARTICIPANTS ECO362: Financial Investments
zzThere are prerequisites in mathematics, economics, and probability and statistics, as necessary for the study of
ECO363: Corporate Finance and Financial Institutions
finance at a sophisticated level. Advance planning is essential as these courses should be completed prior to the junior year. zzTwo required core courses provide an integrated overview and background in modern finance. zzStudents are required to take three elective courses. zzA significant piece of independent work must relate to issues or methods of finance. This takes the form of a senior thesis, or for non-ECO or ORF majors only, if there is no possibility of finance content in their senior thesis or junior paper, a separate, shorter piece of independent work is required instead.
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TEACHING & LEARNING: FINANCIAL MARKETS FOR PUBLIC POLICY PROFESSIONALS This signature short course, created in response to the 2008 global financial crisis, is an important part of the curriculum for master’s of public administration and master’s of public policy students at the Woodrow Wilson School.
N
ow in its ninth year, the intensive three-day “ShortCourse: Financial Markets for Public Policy
Professionals” provides a framework for future public policy professionals to understand the operations of financial institutions, the economic purposes they serve, the markets in which they deal and the regulatory environment in which they operate.
2018 PROGRAM & SPEAKERS UNDERSTANDING THE LANGUAGE OF FINANCE (SEPTEMBER 5) Accounting for Policy Makers: Donal Byard, Zicklin School of Business, Baruch College
Since its inception in the fall of 2010, the course has
FRAMEWORK FOR UNDERSTANDING FINANCIAL MARKETS (SEPTEMBER 6–7)
covered the basics of securities, credit markets, mortgages,
Treasury & Credit Markets: Michael Johannes, Columbia
and derivatives taught by faculty from Columbia Business
Business School
School and Princeton University, government officials and financial industry executives. The core curriculum is complemented by a series of lectures and panel discussions that have evolved over time and include topics such as
Mortgages & Derivatives: Michael Johannes, Columbia Business School Financial Crises: Atif Mian, Princeton University
cryptocurrencies and Dodd-Frank legislation. To familiarize students with the language of finance, Visiting Professor
SELECTED TOPICS IN FINANCE (SEPTEMBER 8)
Donal Byard of Baruch College provided an overview of
Municipal Bond Markets: RJ Gallo, Senior Portfolio
accounting for policymakers.
Manager, Senior Vice President, Head of Municipal Bond Investment Group, Federated Investors
This year’s course ended with a panel discussion on financial regulation. One of the panelists, Kathryn Judge, Professor of Law at Columbia Law School, addressed the issue of
Managing Director of The Carlyle Group
information gaps in the financial regulatory architecture.
Two to Tango: Private Equity’s Partnership Model: Noah
In her view, the course is a valuable effort in helping policy
Gottdiener, CEO, President, and Chairman of the Board of
practitioners become conversant with finance. “I see these
Duff & Phelps
issues as critical and, far too often, not well understood by those who do not specialize in finance. Expanding the pool of policy folks prepared to engage in these debates is a critical step toward improving outcomes” said Judge.
2018 SHORT COURSE AT-A-GLANCE Audience: 48 MPA & MPP students (full capacity) Topics: Accounting principles, financial markets, regulations and policy Financial support: Noah Gottdiener ’78 More info: jrc.princeton.edu/teaching/short-coursefinancial-markets-public-policy-professionals
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Private Equity: David Rubenstein, Co-founder and
Impact Investment: Philip D. Bennett, First Vice President (ret.), EBRD Global Economic and Financial Fault Lines: Ashoka Mody, Princeton University Cryptocurrencies & Financial Market Implications: Amber Baldet, Co-founder & CEO, Clovyr Financial Regulation Panel: Aaron Klein, Brookings Institution, Duncan Jepson, Liberty Global Kathryn Judge, Columbia Law School
TEACHING & LEARNING: FINANCIAL MARKETS FOR PUBLIC POLICY PROFESSIONALS
Students and instructors from the 2018 short course.
“… I was extremely impressed at how well this course reviewed STUDENT FEEDBACK
fundamental concepts, using countless real-world examples and real-
Would recommend this course to others:
time trends. I came away feeling as though I can now read the WSJ
yy Absolutely . . . . . . . . . . . . 53% yy Yes, with enthusiasm . . . . 18% yy Yes . . . . . . . . . . . . . . . . . . 29%
and Financial Times! I especially appreciated the thorough review of
Likely to take similar courses in future?
system in the global economy. I also appreciated the chance to be
yy Likely or very likely . . . . . . 79% yy Unlikely . . . . . . . . . . . . . . 15% yy Very unlikely . . . . . . . . . . . . 6% Quantity/quality of subject matter learned: yy An amazing amount . . . . . 35% yy A lot . . . . . . . . . . . . . . . . . 48% yy Moderate amount . . . . . . 17%
the bond market, the housing crisis, and the role of the U.S. banking
exposed to new ideas and thought leaders during the final day of sessions.”
“Brilliant, added a lot of new knowledge, especially the basic workings of financial markets and some inherent flaws.”
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TEACHING & LEARNING: SELECTED COURSES The Center supports educational programs designed to enhance students’ opportunities to learn about finance, macroeconomics, and public policy. This includes undergraduate and graduate courses, the undergraduate certificate in finance (through the Bendheim Center for Finance), and pre-term short courses.
ECO 361: FINANCIAL ACCOUNTING, Donal Byard.
how does an international financial order evolve? What are
Financial accounting is the accumulation of relevant
the effects of international capital mobility? How is resulting
financial data for a firm, and summarizing and reporting
conflict and instability managed, on both a national and
this information in a firm’s financial statements. This course
international level?
examines the important accounting rules and conventions balance sheet, income statement, and statement of cash
ECO 494: CHINESE FINANCIAL AND MONETARY SYSTEMS, Wei Xiong. With its rapid economic growth in
flows) and related disclosures. While the course provides a
the past three decades, China already has the world’s second
broad overview of the processes and procedures followed in
largest economy. Meanwhile its financial markets are also
producing an enterprise’s financial statements, the course
being quickly liberalized and integrated with the rest of the
emphasizes the analysis of financial statements and related
world. As the current trend continues, there are growing
disclosures by external users such as investors and creditors.
interests to learn and understand the workings of China’s
used to produce a firm’s financial statements (i.e., the
financial and monetary systems. This course aims to serve
ECO 315: TOPICS IN MACROECONOMICS,
this objective with a particular emphasis on understanding
Nobuhiro Kiyotaki. This course uses economic theory to
the role provided by the financial system in facilitating
study credit boom, financial crisis and public policy. The
China’s economic development, in addition to the investment
topics include historical overview of financial crises, credit
opportunities and risk presented by the system to the outside
and asset price booms, banking crisis, balance of payment
world.
crisis, sovereign debt crisis, and monetary, fiscal and macro prudential policies.
ECO 363: CORPORATE FINANCE AND FINANCIAL INSTITUTIONS, David Schoenherr. This
context of the working of financial markets. Topics include
NEW COURSE IN FALL 2018 ECO 406: RADICAL MARKETS (GLEN WEYL)
capital budgeting, capital structure, risk management, and
Wealthy countries in the 21st century face a triple
course examines the determinants of corporate financing decisions and the role of financial institutions in the wider
corporate governance. Additionally, the course introduces various methodologies for valuing individual projects, as well as entire companies.
WWS 466 / HIS 467: FINANCIAL HISTORY,
and failing political legitimacy; many observers blame free markets for these seemingly intractable problems. This course will explore the counterintuitive idea that true free markets might actually
Harold James. The course examines the history of financial
be able to solve these problems by adopting
innovation and its consequences. It examines the evolution
radically new social institutions. These markets would
of trading practices, bills of exchange, government
upend property relations, traditional conceptions
bonds, equities, banking activity, derivatives markets, and
of democracy and international migration. We will
securitization. How do these evolve in particular state or
critically interrogate such unconventional ideas and
national settings, how are the practices regulated, how
explore avenues for applying, disseminating and
do they relate to broader development? What happens as
organizing around them.
financial instruments are traded across state boundaries, and
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social crisis of rising inequality, economic stagnation
TEACHING & LEARNING: SELECTED COURSES
ECO 507: TOPICS IN EMPIRICAL MACROECONOMICS, Atif Mian. This course is geared towards (i) understanding how finance and the macro
WWS 582F: TOPICS IN ECONOMICS – HOUSE OF DEBT: UNDERSTANDING MACRO & FINANCIAL POLICY, Atif Mian. Why do severe recessions happen?
economy interact with each other, and (ii) introducing
Could we have prevented the Great Recession and its
micro-empirical techniques and data sets for answering
consequences? And what actions are needed to prevent
traditional macro questions. The focus of the class is
such crises going forward? We undertake an empirical
empirical but we begin each topic with a discussion of its
exploration of these questions in this course and debate the
theoretical foundation.
various macro and financial policy questions that arise. Our discussions will be strictly disciplined by data and evidence.
ECO 523: PUBLIC FINANCE I, Henrik J. Kleven and
The course will analyze the role of debt in generating the
Owen M. Zidar. This course provides a microeconomic
Great Recession and the Great Depression, as well as the
examination of the role of government in the economy.
current economic malaise in Europe. The course is built
The topics covered include sufficient statistics approaches,
around the book House of Debt by Mian and Amir Sufi.
labor supply responses, taxable income responses, savings/ redistribution. In terms of methodologies, empirical and
WWS 593B: TOPICS IN POLICY ANALYSIS EUROZONE CRISIS AND BEYOND, Ashoka Mody. In
theoretical analyses will feature in roughly equal proportions.
the second half of 2011, the crisis in the eurozone threatened
wealth responses, tax compliance, optimal taxation and
to run out of control. This course discusses four themes: 1)
ECO 526 / FIN 526: CORPORATE FINANCE, David
the critiques of the concept of the eurozone prior to January
Schoenherr and Wei Xiong. Introduction to corporate finance
1999; 2) why the eurozone appeared a major success at its
covering theories and empirical evidence about principal-
10th anniversary, which coincided with the beginning of
agent models of firm managerial structure, takeover bids,
the global economic crisis; 3) the interconnected nature of
capital structure, corporate governance; regulation of
the crisis, weak sovereigns, weak banks, and weak growth
financial markets; financial markets and institutions with a
prospects; and 4) the domestic and multilateral measures to
focus on asymmetric information, transaction costs, or both;
deal with the crisis. The course also considers the future of
dynamic models of market making; and portfolio manager
the eurozone.
performance evaluation.
ECO 553: INTERNATIONAL MONETARY THEORY AND POLICY I, Mark A. Aguiar. This sequence (with
WWS 525: PUBLIC ECONOMICS AND PUBLIC POLICY, Henrik J. Kleven. This course focuses on the role of the government in the economy and aims to provide an
ECO 554) develops core models of international finance
understanding of the reasons for government intervention
and open-economy macroeconomics, and surveys selected
in the economy, analyzing the benefits and costs of possible
current research topics in the field. Topics treated in the
government policies, and the response of economic agents
first semester include: the intertemporal approach to
to the government’s actions. The course covers education,
the current account; the determination of real exchange
labor, and tax policy, social insurance programs, public
rates, and purchasing power parity; international CAPM
goods, environmental protection, and the interaction
and uncovered interest rate parity; sovereign debt crisis;
between different levels of government.
speculative attacks and liquidity crises; international risk sharing and capital flows, home bias, and the stability of the international financial system.
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CENTER EVENTS: HIGHLIGHTS During the period February 2018–February 2019, the Center hosted and co-hosted over 25 events including conferences, lectures, student and faculty seminars and informal gatherings.
T
he Center’s program of events is designed to complement
again at the invitation of the Center’s Undergraduate
classroom learning, foster innovative research, and
Associates. Clayton discussed the SEC’s evolving views on
engage with policymakers and industry professionals. At the invitation of the Center’s Undergraduate Associates,
LORETTA J. MESTER *85, PRESIDENT OF THE CLEVELAND FEDERAL RESERVE BANK, gave a speech on March 27, 2018 at Princeton University. In addition to discussing the economic outlook, Mester assessed labor market conditions, the expected path of inflation and the monetary policy agenda.
SECURITIES AND EXCHANGE COMMISSION CHAIRMAN JAY CLAYTON spoke on April 5, 2018,
whether digital coins should be classified as securities and the need for government oversight in the context of rapid technological innovation. On October 16, 2018 four experts, DAVID A. BALDWIN *65, THAD MCBRIDE ‘95, MEREDITH H. TERRELL ‘91, BRIAN O’TOOLE ‘03, explored the effectiveness of financial sanctions as diplomatic tools and also discussed the “secondary sanctions” that restrict U.S. firms’ interactions with any non-U.S. entities that have conducted business with a sanctioned state.
Students packed the room to hear SEC Chairman Jay Clayton speak about cryptocurrency regulation.
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CENTER EVENTS: HIGHLIGHTS
CHRISTOPHER MARKS *96, head of emerging markets at Mitsubishi Financial Group, spoke on November 8, 2018 about the changing landscape of development finance. As foreign aid shrinks, firms and governments in emerging markets, as well as development banks, are increasingly seeking out new, private investors. In this context, risk management tools—from balance sheet readjustment, to project cofinancing, and risk guarantees—are critical for attracting and retaining investment. The Center hosted FEDERAL COMMUNICATIONS
COMMISSIONER JESSICA ROSENWORCEL on December 5, 2018 for a conversation about net neutrality, 5G policy, and finance. Nick Feamster, Professor of Computer Science and Deputy Director of Princeton’s Center for Information Technology Policy moderated the discussion. The Center sponsored three book talks in Fall 2018, with more planned for Spring 2019: zzE. GLEN WEYL, Visiting Research Scholar at the JulisRabinowitz Center for Public Policy & Finance and a Principal Researcher at Microsoft Research, talked about
Loretta Mester
his new book Radical Markets: Uprooting Capitalism and Democracy for a Just Society, coauthored with Eric Posner. Anna Stilz, Professor of Politics and Human Values at Princeton University served as discussant. zzASHOKA MODY’s Euro Tragedy: A Drama in Nine Acts is a comprehensive and authoritative history of the euro. Mody, previously the Deputy Director of the IMF’s Research and European Departments, is a faculty affiliate of the Center and Charles & Marie Robertson Professor of International Economics at Princeton. The Economist lists Radical Markets and Euro Tragedy in the best five business and economics books of 2018. zzDoing Capitalism in the Innovation Economy: Reconfiguring the Three-Player Game between Markets, Speculators and the State by WILLIAM H. JANEWAY
‘65 was the third book talk. Janeway is a senior advisor and managing director at Warburg Pincus and has been Christopher Marks
an active venture capital investor for more than 40 years.
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CENTER EVENTS: CALENDAR
DATE
EVENT
AUDIENCE SPRING 2018
26
Feb. 15
The Future of Manufacturing-Led Development, Otaviano Canuto, Executive Director, World Bank Group (lunch talk)
Princeton University students
Feb. 15
The Rule of Law at Home and Abroad: Not Just for Lawyers and Judges, James Silkenat (co-sponsored with Law and Public Affairs)
Princeton University students
Feb. 20
Macrofinance Lab - Working Dinner
Macrofinance Lab members, faculty, staff and students
Feb. 22-23
The Future of Globalization: Trade, Finance & Politics (7th Annual Conference)
Ticketed event. Open to the public.
Mar. 7
An Accidental Brexit: Destabilization of Europe and Weakening Multilateralism, Paul J.J. Welfens (organized by the Program in Contemporary European Politics and Society)
Princeton University faculty, staff, and students
Mar. 26
The Economic Outlook, Monetary Policy, and Some Future Policy Considerations, Loretta Mester, President of the Cleveland Federal Reserve Bank
Open to the public.
Apr. 2
Latin America: Recent Developments and Economic Outlook, Alejandro Werner, Director-Western Hemisphere, IMF
Princeton University students
Apr. 5
Cryptocurrency and Initial Coin Offerings, Jay Clayton, Securities and Exchange Commission Chairman
Princeton University students
Apr. 17
Macrofinance Lab - Working Dinner
Macrofinance Lab members, faculty, staff and students
May 8
End of year lunch
Center faculty affiliates, staff and undergrad and grad associates
CENTER EVENTS: CALENDAR
DATE
EVENT
AUDIENCE FALL 2018
Sep. 5-8
Financial Markets for Policy Professionals (Ninth Edition)
Registration only for MPPs and MPAs
Sep. 17
Welcome Dinner
Center affiliates and student associates
Sep. 25
Radical Markets (book talk), Glen Weyl and Anna Stilz
Open to the public
Oct. 1
Macrofinance Lab - Working Dinner
Macrofinance Lab members, faculty, staff and students
Oct. 4
Carolyn Wilkens, Bank of Canada
Princeton University faculty, staff, and students
Oct. 9
Euro Tragedy (book talk), Ashoka Mody
Open to the public
Oct. 11
Development Through Digitization, Nadeem Hussain and Shahryar Reza, PlanetN Group
Princeton University faculty, staff, and students
Oct. 16
Sanctions Finance (panel discussion), David A. Baldwin *65, Thad McBride ‘95, Meredith H. Terrell ‘91, Brian O’Toole ‘03
Princeton University faculty, staff, and students
Nov. 8
Successful Risk Management in Development Finance, Christopher Marks, Managing Director and Head of Emerging Markets, MUFG/Mitsubishi Financial Group
Princeton University faculty, staff, and students
Nov. 29
Doing Capitalism in the Innovation Economy, Bill Janeway, Warburg Pincus
Open to the public
Dec. 3
The Many Ways of Doing Economic History, Marc Flandreau, University of Pennsylvania
Princeton University faculty, staff, and students
Dec. 4
Macrofinance Lab - Working Dinner
Macrofinance Lab members, faculty, staff and students
Dec. 5
Net Neutrality, 5G Policy, and Finance, FCC Commissioner Jessica Rosenworcel (moderated by Prof. Nick Feamster)
Princeton University faculty, staff, and students
27
CENTER EVENTS: CALENDAR
DATE
EVENT
AUDIENCE SPRING 2019
Feb. 12
Macrofinance Lab - Working Dinner
Macrofinance Lab members, faculty, staff and students
Radical Mechanisms 10 Years After the Financial Crisis, JRCPPF 8th Annual Conference, Cosponsored by Microsoft Research
Ticketed event. Open to the public.
Feb. 28
Crashed: How a Decade of Financial Crises Changed the World (book talk), Adam Tooze, Columbia University (Economic History Workshop)
Princeton University faculty, staff, and students
Mar. 7
Governor Lael Brainard, US Federal Reserve Board
Open to the public
Mar. 13
Fixing the Euro Needs to Go Beyond Economics, Anne-Laure Delatte, CEPII Sciences Po
Princeton University faculty, staff, and students
Mar. 27
Finance Industry Panel: What’s Changed Since 2008 and What’s Ahead?, Jim Keenan (BlackRock), Scott Graves (Ares Capital)
Open to the public
Mar. 28
Trade, Law and the Global Order of 1919, Patricia Clavin, Oxford University (Economic History Workshop)
Princeton University faculty, staff, and students
Apr. 4
Dan M. Berkovitz, Commissioner of the Commodity Futures Trading Commission
Princeton University faculty, staff, and students
Apr. 4
The Political Economy of Secrecy, Katherine Epstein, Rutgers University (Economic History Workshop)
Princeton University faculty, staff, and students
Apr. 5-6
Princeton Summit on Africa - Panel on Trade and Economic Policies
Ticketed event. Open to the public.
Apr. 9
The Indian Economy, Arvind Panagariya, Columbia University (moderated by Prof. Atul Kohli)
Princeton University faculty, staff, and students
Apr. 11-12
Insights on Health Policy: A Conference in Tribute to Uwe Reinhardt
Apr. 18
Responding to the Challenge of State Fragility, Sir Tim Besley, London School of Economics and Politics
Princeton University faculty, staff, and students
Apr. 23
Macrofinance Lab - Working Dinner
Macrofinance Lab members, faculty, staff and students
Apr. 30
Demian Reidel, (former) Deputy Governor, Central Bank of Argentina
Princeton University faculty, staff, and students
May 8
End of year lunch
Staff, faculty, student associates
Feb. 21-22
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ABOUT THE CENTER Established in 2011, the Julis-Rabinowitz Center for Public Policy & Finance at the Woodrow Wilson School promotes research and teaching about financial markets and the macroeconomy, with the aim of improving the design and implementation of public policies. The Center offers opportunities for collaborations among students and faculty in the Woodrow Wilson School, other departments, and the wider policy community. The Center encourages crossing boundaries both within economics and across disciplines such as economics, finance, law, politics, history, and ethics.
OUR SPONSORS Princeton University gratefully acknowledges the generous support of the Center’s sponsors.
THE JULIS-RABINOWITZ FAMILY, for the founding gift that made the Center possible. PHILIP D. BENNETT, *79 MARK R. GENENDER, ‘87 AND FAMILY NOAH GOTTDIENER, ‘78 DEAN N. MENEGAS, ‘83
ADMINISTRATION Atif Mian Director atif@princeton.edu 609-258-6718
Violeta Rosenthal Center Academic Specialist vrosenth@princeton.edu 609-258-9869
Pallavi Nuka Assistant Director pallavi@princeton.edu 609-258-5258
Nancy Turco Program Coordinator nturco@princeton.edu 609-258-7051
CONTACT US The Julis-Rabinowitz Center for Public Policy & Finance The Julis Romo Rabinowitz Building Princeton University Princeton, NJ 08544
Tel: 609-258-7051 Email: jrcenter@princeton.edu Web: jrc.princeton.edu