Julis-Rabinowitz Center for Public Policy & Finance (JRCPPF) 2020 Annual Report

The Julis-

Rabinowitz Center for Public Policy & Finance 2019–2020 ANNUAL REPORT

about the center Established in 2011, the Julis-Rabinowitz Center for Public Policy & Finance at the Woodrow Wilson School promotes teaching and research about the interactions between 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.

acknowledgments 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 For a more comprehensive view of the Center’s programs and activities, visit us at jrc.princeton.edu

TABLE OF CONTENTS

2

MESSAGE FROM THE DIRECTOR

3 F A C U L T Y : 2019–2020 center affiliates 5 F A C U L T Y : research, publications and news 1 2 R E S E A R C H E R S : visitors, fellows and postdoctoral associates 14

R E S E A R C H I N I T I A T I V E S : macrofinance lab

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R E S E A R C H I N I T I A T I V E S : workshops

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T E A C H I N G & L E A R N I N G : student associates

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T E A C H I N G & L E A R N I N G : curriculum

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T E A C H I N G & L E A R N I N G : financial markets for public policy professionals

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C E N T E R E V E N T S : highlights

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C E N T E R E V E N T S : calendar

2 8 L E A D E R S H I P : external advisory council

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MESSAGE FROM THE DIRECTOR

S

ince its inception, the Julis-Rabinowitz Center has developed into an important hub for teaching and research at the intersection of finance, macroeconomics and policy. With 34 affiliated faculty drawn from different departments across campus, the Center continues to be at the forefront of research on a range of topics from household debt to credit markets to

regulation of financial markets and the role of financial institutions in economic growth. The Center supports this work, particularly that of our junior scholars, through research assistance, funding for data acquisition, and opportunities for collaborative and multidisciplinary research such as the Macrofinance Lab. This report profiles some of the leading results.

The Center’s postdoctoral associates are important members of our research community. This year we welcomed Andres Sarto, an MIT graduate whose research interests combine empirical methods, theory and macroeconomic policy. Karsten Mßller, now in his second year, is developing novel datasets to study patterns of sectoral debt and how it links to financial crises. Our former postdoctoral associate, Ernest Liu, was appointed Assistant Professor of Economics at Princeton in fall 2019.

Our predoctoral research assistant program provides invaluable training and experience toward a career in academic research in economics or public policy.

Former predocs are now pursuing doctoral degrees at the University of Chicago, Columbia University and the London School of Economics.

The robust program of curricular and co-curricular activities engages and supports more than 90 student associates, both graduate and undergraduate from a variety of majors. The Center offers funding for scholarly travel, undergraduate summer internships, student-led conferences and special initiatives such as the Policy Punchline podcast series.

With over 25 talks and seminars during the year, the Center promotes active dialogue between academia, industry and policy makers. We hosted a range of speakers from Lael Brainard at the Federal Reserve Board to economist Emmanuel Saez and BlackRock CIO James Keenan. Our eighth annual conference, co-sponsored by Microsoft Research, explored new and radical mechanisms to address issues of inequality, competition and social organization.

As the Center approaches its 10-year anniversary, we look forward to an equally productive year ahead!

Atif Mian Director, Julis-Rabinowitz Center for Public Policy & Finance John H. Laporte, Jr. Class of 1967 Professor of Economics, Public Policy and Finance

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2019–2020 center affiliates ATIF MIAN, Center

MIGUEL A. CENTENO,

ERNEST LIU, Assistant

Director, John H.

Vice-Dean, Woodrow

Professor of Economics

Laporte, Jr. Class of 1967

Wilson School of Public

Professor of Economics, Public Policy and Finance

MARK A. AGUIAR,

and International Affairs; Musgrave Professor of Sociology; Professor of Sociology and

BURTON G. MALKIEL,

International Affairs

Chemical Bank

Walker Professor of

Chairman’s Professor of

Economics and

OLEG ITSKHOKI,

International Finance

Professor of Economics

Economics, Emeritus

and International

ALEXANDRE MAS,

YACINE AITSAHALIA, Otto A. Hack

Affairs

William S. Tod Professor

1903 Professor of

HAROLD JAMES,

Finance and Economics

Claude and Lore Kelly

of Economics and Public Affairs

Professor in European

ADRIEN MATRAY,

Studies; Professor of

Assistant Professor of

NATALIE MARIE BACHAS, Assistant

History and International Affairs;

Professor of Economics

Director, Program in Contemporary

Economics

European Politics and Society

ROLAND J.M. BÉNABOU, Theodore A.

NOLAN MCCARTY,

JAKUB KASTL,

Susan Dod Brown

Professor of Economics

Professor of Politics and

Wells 1929 Professor of

Public Affairs

Economics and Public Affairs

ASHOKA MODY,

NOBUHIRO KIYOTAKI,

Charles and Marie

ALAN S. BLINDER,

Harold H. Helm 1920

Robertson Visiting

Gordon S. Rentschler

Professor of Economics

Professor in

Memorial Professor of

and Banking

International Economic Policy

Economics and Public Affairs

MARKUS K. BRUNNERMEIER,

HENRIK J. KLEVEN,

BENJAMIN MOLL,

Professor of Economics

Professor of Economics

and Public Affairs

and International Affairs

MORITZ LENEL, Assistant Professor of

STEPHEN J. REDDING, Harold T.

Economics

Shapiro 1964 Professor

Edwards S. Sanford Professor of Economics; Director, Bendheim Center for Finance

in Economics

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2019–2020 center affiliates CECILIA E. ROUSE, Dean, Woodrow Wilson

CHRISTOPHER A. SIMS, John F. Sherrerd

Leander and Mary

School of Public and

1952 Professor of

Trumbull Adams

International Affairs;

Economics

Lawrence and Shirley Katzman and

WEI XIONG, Hugh

Professor for the Study of Investment and Financial Markets

Economics and Education; Professor of

LEONARD WANTCHEKON,

MOTOHIRO YOGO,

Economics and Public Affairs

Professor of Politics and

Professor of Economics

Lewis and Anna Ernst Professor in

International Affairs

DAVID SCHOENHERR, Assistant Professor of

ARLENE WONG,

Economics

Assistant Professor of Economics

ELDAR SHAFIR, Class of 1987 Professor in Behavioral Science and Public Policy; Professor of Psychology and Public Affairs

4

OWEN M. ZIDAR, Assistant Professor of Economics and Public Affairs

FACULTY

research, publications and news T

he Center supports research at the intersection of public

and how new technologies affect SME productivity,

policy, financial markets and the macroeconomy. Over the

employment and income growth. Ongoing work (with Johan

past year, the Center supported original work in financial

Hombert) studies how different types of asset bubbles

economics, political economy and regulation.

(technological bubbles versus house prices bubbles, for

featured faculty research

instance) affect worker allocation and can distort the economy. Matray earned his doctorate from HEC Paris and joined Princeton’s faculty in 2016.

NATALIE MARIE BACHAS, Assistant Professor of Economics. Bachas’ research

ATIF MIAN, Center Director, John H. Laporte,

focuses on household finance, industrial

Jr. Class of 1967 Professor of Economics, Public

organization and public economics. She

Policy and Finance. Mian’s work explores the

received the 2017 Berkeley Department of Economics

connections between finance and the

Graduate Student Award for Public Policy Research and the

macroeconomy. Building on themes raised in his 2014 book,

CPC Dissertation Prize. Her current work includes studying

House of Debt, with Amir Sufi, his current research uses

the efficiency and equity implications of changes in the $1.3

county-level data on household borrowing and employment to

trillion student loan market and the efficiency of federal loan

look at the impact of indebtedness on labor allocation across

guarantees. She earned her Ph.D. in economics from the

geographical areas and industries. Another strand of his work

University of California at Berkeley. She joined the Princeton

investigates the link between household debt and business

faculty in the fall of 2018.

cycles worldwide and the role of credit supply shocks. His research has appeared in American Economic Review,

ERNEST LIU, Assistant Professor of

Econometrica, Quarterly Journal of Economics, Journal of

Economics. Liu studies the implications of

Finance, Review of Financial Studies and Journal of Financial

weak financial institutions for economic

Economics. He holds a Ph.D. in economics from MIT.

growth, allocation of resources and economic development. One strand of his work uses production

JONATHAN E. PAYNE, Pyewacket Research

network theory to understand industrial policies, specifically

Fellow, Bendheim Center for Finance 2019–

the strong government support for upstream industries that

2020; Assistant Professor of Economics

are widely adopted in developing economies. Another strand

starting July 1, 2019. Payne’s research studies

shows how low long-term interest rates encourage market

questions in finance, banking and macroeconomics. He is

concentration and slow productivity growth. He received his

also interested economic history, computational economics

Ph.D. in economics from MIT in 2017

and econometrics. His job market paper develops an equilibrium model of the market for long-term bank credit

ADRIEN MATRAY, Assistant Professor of

that helps explain how banks reduced credit to firms during

Economics. Matray studies corporate finance,

the financial crisis and the impacts of this credit disruption.

entrepreneurship, innovation and financial

He earned his Ph.D. from New York University.

inclusion. One strand of research looks at aspects of financial inclusion for low-income households and

DAVID SCHOENHERR, Assistant Professor

minorities both in the U.S. and in developing countries. A

of Economics. Schoenherr’s research interests

second strand investigates the frictions affecting

include financial contracting, political

entrepreneurship, SME growth and technology adoption

economy, and the interaction between law and

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FACULTY

research, publications and news finance. He is particularly interested in how the design of bankruptcy law affects security prices and investors’ ex ante

books

incentives. His work also examines the role of social and

ASHOKA MODY’s book Euro Tragedy: A Drama

political connections on economic outcomes in different

in Nine Acts received the Prose Award from the

contexts, as well as how informal labor markets affect the

American Association of Publishers. This must-

incentives of workers in response to changes in

read history of the euro was listed among the best

unemployment insurance benefits. He holds a Ph.D. in

business and economics books of 2018 by The

finance from the London Business School. Schoenherr

Economist, Foreign Affairs and The Financial Times.

joined the Princeton faculty in 2016.

UWE E. REINHARDT’s book Priced Out: The

MOTOHIRO YOGO, Professor of Economics.

Economic and Ethical Costs of American Health

Yogo’s fields of expertise are financial

Care was published posthumously.

economics, insurance and econometrics. He has published in American Economic Review, Econometrica, Journal of Political Economy, Journal of

ALAN KRUEGER’s book Rocknomics: What the

Finance, Journal of Financial Economics and Review of

Music Industry Can Teach Us About Economics

Financial Studies. Recognition for his work includes the

(and Our Future) was published posthumously.

GPIF Finance Award, the Swiss Finance Institute Outstanding Paper Award, and the Zellner Thesis Award in Business and Economic Statistics. He earned his doctorate from Harvard in 2004. He joined Princeton’s faculty in 2015.

Prior to that, he was a research economist at the Federal Reserve Bank of Minneapolis.

scholarly papers ERNEST LIU’s work with ATIF MIAN and Amir Sufi entitled “Low Interest Rates, Market Power, and Productivity Growth,” forthcoming in Econometrica, examines how the production side of the economy responds to a low interest rate environment. The paper shows that low interest rates encourage concentration by giving industry leaders a strategic advantage over followers. The work was reported in The Wall Street Journal. Liu’s paper “Industrial Policies in Production Networks,” published in the Quarterly Journal of Economics, uses production network theory to understand industrial policies. He finds that there is a strong incentive for a well-meaning government to subsidize upstream sectors. He develops a sufficient statistic that predicts the sectors targeted by government interventions in South Korea in the 1970s and in modern day China.

The paper was featured in The Economist, and a summary appears on the VoxDev website. Liu’s work with NATALIE

MARIE BACHAS entitled “Market Power in Small Business

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FACULTY

research, publications and news Lending: A Two-Dimensional Bunching Approach”

Jimenez, Jose-Luis Peydro and Jesus Saurina, forthcoming

proposes a new methodology to estimate bank market

in Journal of Monetary Economics, quantifies the real effects

power based on how banks respond to interest rate ceilings

of the bank lending channel and analyzes the impact of

set by regulators. They find substantial market power in

banks’ ability to securitize real estate assets on the supply of

small business lending in the U.S., and much of the policy

credit to non real-estate firms.

subsidies to this market segment actually benefits lenders instead of small business borrowers.

MOTOHIRO YOGO’s recent publications include “A Demand System Approach to Asset Pricing” in Journal of Political

What’s the impact of risk-based pricing in the $1.4TN

Economy and “Leverage Dynamics and Credit Quality” in

student loan market? New research by NATALIE MARIE

Journal of Economic Theory. He and co-author Ralph Koijen

BACHAS looks at what happens when low-risk borrowers

are currently working on a graduate-level book on “The

refinance out of the government pool into the private market,

Financial Economics of Insurance.”

with important implications for policy.

DAVID SCHOENHERR’s new work, “The Rise of a ADRIEN MATRAY’s paper, “Noisy Stock Prices and

Network: Spillover of Political Patronage and Cronyism to

Corporate Investment,” joint with Olivier Dessaint, Thierry

the Private Sector,” with Terry Moon, looks at the costs for

Foucault and Laurent Frésard, is forthcoming in the Review

Korean private banks of the misallocation of resources to

of Financial Studies. This work show that firms’ investment

politically connected firms. His paper “Political Connections

decisions can be loss-inducing when managers’ rely on

and Allocative Distortions,” published in Journal of Finance,

noisy stock prices as signals about investment opportunities.

uses data from Korea to examine the effects of government

The findings offer a novel perspective on how stock market

procurement contracts being influenced by firms’ political

inefficiencies can affect the real economy, even in the

connections.

absence of financing or agency frictions. Another paper, “Bank-Branch Supply, Financial Inclusion and Wealth

MORITZ LENEL’s paper “The Short Rate Disconnect in a

Accumulation,” joint with Claire Célerier, is forthcoming in

Monetary Economy,” with co-authors Monika Piazzesi and

the Review of Financial Studies. Exploiting the deregulation

Martin Schneider, was published in Journal of Monetary

of U.S. interstate banking between 1994 and 2005, Matray

Economics. This paper studies interest rate dynamics when

and Célerier find that, for low-income households, access

payment intermediaries value short bonds as collateral to

to bank branches fosters household wealth accumulation

back inside money.

and reduces financial strain relative to their unbanked counterparts. A summary of the paper appears on the

KARSTEN MÜLLER recently received grant funding from

VoxDev website.

the Governor’s Woods Foundation and the Institute for

ATIF MIAN’s paper “How Does Credit Supply Expansion

New Economic Thinking for his research on industry credit cycles. In ongoing work with Emil Verner at MIT-Sloan,

Affect the Real Economy? The Productive Capacity and

he shows that whether monetary and macroprudential

Household Demand Channels” with Amir Sufi and Emil

policies will likely prevent future debt-driven financial crises

Verner, forthcoming in Journal of Finance, shows demand-

crucially depends on the allocation of credit. With co-author

fueled credit expansions amplify business cycles, leading

Carlo Schwarz, Müller has studied the role of social media

to more severe recessions. Another recent paper, “The

in enabling the rise of anti-minority sentiments in the U.S.

Real Effects of the Bank Lending Channel,” with Gabriel

since Donald Trump’s presidential campaign start. The

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FACULTY

research, publications and news paper “From Hashtag to Hate Crime:

research being undertaken on

Twitter and Anti-Minority Sentiment”

financial markets, labor markets, and

has received considerable attention in

the aggregate economy” and for his

the press, including mentions by The

“internationally recognized influence as

New York Times, Scientific American,

a macroeconomist of the last 30 years.”

Big Think and many other outlets. In forthcoming work, he also investigates

ALEXANDRE MAS was elected

the role of social media in U.S.

a Fellow of the Society of Labor

presidential election outcomes.

Economics.

news

WILL DOBBIE, Assistant Professor of Economics and Public Affairs, was

NEW FACULTY AFFILIATES

awarded a Sloan Research Fellowship.

JONATHAN E. PAYNE was appointed Pyewacket Fellow at the Bendheim Center for Finance, 2019–20, and will assume the post of Assistant Professor

The Center honors the memory and legacy of the late ALAN B. KRUEGER

of Economics beginning in July 2020.

(1960–2019), James Madison

STEPHEN J. REDDING is Harold T.

founding director of the Princeton

Shapiro 1964 Professor in Economics in the Economics Department and Woodrow Wilson School at Princeton University and Director of the International Trade and Investment Program of the National Bureau of

Professor of Political Economy and Survey Research Center. Krueger was an affiliated faculty member of the Julis-Rabinowitz Center.

JOHN CLIFTON (JACK) BOGLE 1951, founder of mutual fund company

Economic Research.

Vanguard, was a close friend of the

PROMOTIONS

many in the Princeton community.

OWEN M. ZIDAR was promoted to Associate Professor of Economics and Public Affairs.

AWARDS AND RECOGNITIONS Princeton Professor NOBUHIRO

KIYOTAKI was awarded an honorary degree of doctor of science from the University of Edinburgh for his “significant contribution to current

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IN MEMORIAM

Bendheim Center for Finance and Jean-Christophe de Swaan, Visiting Lecturer in Economics, noted that Bogle created more social good than any contemporary in finance.

AFFILIATES IN THE NEWS ATIF MIAN z How to Fix Pakistan’s Crashing Economy — The New York Times

z In Conversation with Atif Mian — Washington Center for Equitable Growth z Man with a Mission — International Monetary Fund z Historic Asset Boom Passes by Half of Families — The Wall Street Journal z What Caused Brazil’s Recession?

(Hint: It Wasn’t Just Mortgage Debt) — Chicago Booth Review z Dr Atif Mian Explains the Link between Political Meddling And Economic Growth — The News International z Watch Fox News? You Likely Think the U.S. Economy Is Great. MSNBC Viewers Not So Much — Reuters z Building Competence — Dawn z Is Corruption Pakistan’s Biggest Problem? — Business Recorder z The Government Failed to Stop the Last Recession. It Can Prevent the Next One — Vox z What’s Got U.S. Inflation So Depressed? Just Asking for the Fed — Bloomberg z 10 Years Later, America’s Booming Economy Still Bears Scars of the Great Recession — CNN

ROLAND BÉNABOU z Southerners, Facing Big Odds, Believe in a Path Out of Poverty — The New York Times z The Politics of Distributive Economics — moneycontrol z Eight Reasons Why Inequality Ruins the Economy — Evonomics

ALAN S. BLINDER z Why Trump Should Leave the Fed Alone — Foreign Affairs

FACULTY

research, publications and news z Fed Risks Creating an Environment for Another Financial Crisis, Ex-Officials Say — Bloomberg z The Individual Mandate Is Here to Stay — The Wall Street Journal z Empower Regulators to Stop Risky Financial Business — The Wall Street Journal

JEAN-CHRISTOPHE DE SWAAN

HENRIK J. KLEVEN

z Why Global Fund Managers Are Missing a Trick on Japan — Financial Times

z A Major New Study Finds the Biggest Federal Work Subsidy Doesn’t Promote Work — Vox

z Vanguard’s John Bogle created More Social Good Than Any Contemporary in Finance — Quartz

z Having Children Costs Women’s Earnings, But the Impact Varies from Country to Country — World Economic Forum

OLEG ITSKHOKI

z The House Just Passed a Bill to Close the Gender Pay Gap — Vox

z Former Fed Vice Chair Blinder: Meddling with the Dollar Could “Kick off a Real Swoon” — CNBC

z Who Pays for Trump’s Tariffs on China? — PBS NewsHour

z Suits v Hoodies: The Cryptocurrency Battle — Financial Times

z Germany Can Reduce its External Surplus — Project Syndicate

z Women’s Earnings Drop After Having a Child—But Men’s Do Not — CNBC Make It

z Trump’s Trade Shocks Risk Recession Central Banks Can’t Prevent — Bloomberg

z Was Marx Right? — Project Syndicate

z Earned Income Tax Credit Looks Like It Needs Work — Bloomberg

z Trump Is Leading a Global Attack against Central Banks. It Could End in Disaster — The Washington Post

MARKUS K. BRUNNERMEIER z Sweden Raises Tone of Negative Rate Debate — Reuters Breaking Views z The EU Banked on Parliament Rejecting No Deal. Now That’s All Changed — The Guardian z Central Banks Are Fast Running Out of Room for Further Rate Cuts — Bloomberg z Blockchain Hype Missed the Mark, and Not by a Little — Bloomberg Opinion z The Germans Don’t Necessarily Want Europe Defended by Macron — Le Monde z Time for ECB to Admit Its Existing Policy Arsenal Is Exhausted — Financial Times Opinion z The Threat and the Promise of Digital Money — Financial Times

HAROLD JAMES z Money for Nothing — Project Syndicate z What’s Behind the Crisis of Democracy? — Project Syndicate z A Future without Currency Wars? — Project Syndicate z Locating Equality — Project Syndicate z China’s New Road to Globalisation — World Finance z China to Test Digital Currency.

Could It End Up Challenging the Dollar Globally? — KUOW

z Why Women Excel and Prized “Soft Skills” but Still Trail Men When It Comes to Being Hired for the STEM Careers of the Future — The 74 z Working Parents Are an Endangered Species. That’s Why Democrats Are Talking Child Care — The Washington Post z Democrats Want To Be Economic Populists. Why Are They Clinging to a Flawed Reagan-Era Tax Credit? — The Intercept z How Rising House Prices Drive UK Borrowing — Chicago Booth Review

ERNEST LIU

z Political Pressures Rolled Back Globalization Before. It Can Happen Again — The Washington Post

z China’s Industrial Policy Has Worked Better Than Critics Think — The Economist

JAKUB KASTL

z What If All the World’s Economic Woes Are Part of the Same Problem?

— The New York Times

z Tremor Adds Team of Market Design Experts — Reinsurance News

NOBUHIRO KIYOTAKI z Five Economists Whose Work Is Worthy of a Nobel — Bloomberg

z Startups Lose in a Low Rate World and the Fed Is Blaming Itself — Bloomberg z How Low Interest Rates Can Hurt Competition, and the Economy — Chicago Booth Review

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research, publications and news z Could Ultra-Low Interest Rates Be Contractionary? — Project Syndicate

z This Unbearable Inflation Has Gone — Interia

z Let’s Choose the Best Person to Lead the IMF — Bloomberg Opinion

z Does America Have an Antitrust Problem? — Chicago Booth Review

ADRIEN MATRAY

z This Could Be Boris’ “Nixon Goes to China” Moment — The Spectator

z How to Stop Rising Inequality in the Next Recession — Bloomberg Opinion z How Low Interest Rates Can Freeze the Economy — The Wall Street Journal z Why the Fed Is Losing Potency — The Wall Street Journal

BURTON G. MALKIEL z The Father of the Passive Investing Revolution on Wall Street Says His Idea Was Called “Garbage” — CNBC z An Unknown “International Shock” Will Likely Cause the Next Recession, Burton Malkiel Says — CNBC

z Beware of Tech Bubbles: Long-Term Earnings of the Dot-Com Bubble Generation — Vox z The Noise in Stock Prices Matters for the Real Economy — Vox

NOLAN MCCARTY z How the Shutdown Might End, According to Game Theory — PBS NewsHour z Capitalisn’t: Regulating Facebook and Google—the Political Perspective — Chicago Booth Review z Tracing the Roots of a Partisan Impeachment — NPR

z Index Management Has a Bright Future Ahead of It — Le Monde

z Managing the Economic and Social Impact of the Digital Revolution — ProMarket

z Darts Are Beating the Ira Sohn Investing Pros — The Wall Street Journal

z How Did Our Politics Get This Broken? — Dallas Morning News

z Burton Malkiel on Index-Based Investing and Hedge Funds — Financial Times

ASHOKA MODY

z The Secrets of Jack Bogle’s Investment Success — The Wall Street Journal z How to Beat the Market — The New York Times z Asset Managers with $74 Trillion on Brink of Historic Shakeout — Bloomberg

ALEXANDRE MAS z People Who Work from Home Earn More Than Those Who Commute— Here’s Why — CNBC

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z How Foreign Capital Can Boost Firm Productivity — livemint

z Fixing Indian Finance after the Crisis — Bloomberg z Draghi’s Dangerous Farewell — Project Syndicate z The Eternally Optimistic IMF — Project Syndicate z Tax Changes Will Be a “Big Setback” for Irish Economy — Ashoka Mody — The Irish Times z How India’s Growth Bubble Fizzled Out — livemint z Greek Bonds Now Yield Less Than Treasury’s, and That’s as Irrational as It Was in 2007 — MarketWatch

z Banks Are Paying People to Borrow Money. That’s Alarming News for the Global Economy — The Washington Post z The ECB Has Reached the End of Its Rope, Leaving the Eurozone with Few Options — EconBrowser z Indian Financial Sector Stuck in Real Estate Quicksand — Nikkei Asian Review z Mario Draghi and the Grand Folly of the Eurozone — spiked

BENJAMIN MOLL z Economics in Central Banking: Greg Kaplan, Benjamin Moll, and Gianluca Violante — Central Banking z A Nation’s Wealth May Depend on How Much Its Workers Can Learn on the Job — Kellogg Insight

KARSTEN MÜLLER z From Tea to Banking Regulation — FAZ Blog z Most Latinos Now Say It’s Gotten Worse for Them in the U. S. — FiveThirtyEight z Is America Going Fascist? — Project Syndicate

STEPHEN REDDING z American Consumers, Not China, Are Paying for Trump’s Tariffs — The New York Times z As Trump Moves to End Trade War with China, Business Asks: Was It Worth It? — The New York Times z Donald Trump Claimed the Impact of His China Tariffs on American Consumers Is “Virtually None”—But

FACULTY

research, publications and news That’s Not What the Evidence Says — Newsweek

z Dollars in the Margins — The New York Times Magazine

z Trump’s Tariffs Are Costing Americans $1.4 Billion Each Month, Study Shows — CNBC

z “It’s Not a Pipe Dream”: Five Things Australia Could Do Now to End Poverty — The Guardian

z Fact Check: Trump Says China Is Paying for His Tariffs. He’s Wrong — NBC News

LEONARD WANTCHEKON

z Trump Tariffs Costing Americans $1.4 Billion a Month, Have “No Impact” on Foreign Exporters — Salon z US Consumers Start to Pay Price of Trade War with China — Financial Times z Trump’s Trade War Has Cost the US at Least $19 billion — Quartz z Trade Talks Will Probably End with Tariffs Still in Place — The Economist

z When Is Knowledge Power? — Project Syndicate z Interview with Professor Léonard Wantchekon: “There will not be a fixed parity at the level of the ECOWAS common currency” — Fraternite z Where Are the US-Trained African Economists? — Fin24 z Léonard Wantchékon: The Rage to Succeed Against All Odds — Afrik z A Timely Nobel Win for PolicyRelevant Research — Deccan Herald

z What Trump’s Aggressive Trade Tactics Have Achieved — The New York Times Opinion

z Natural Resource Curse: Nightmare of the Indonesian Economy — Kumparan

z The Costs of Trump’s Import Tariffs Have Landed Entirely on US Citizens — ProMarket

ARLENE WONG

z Ten Questions about the Digital Economy: Are Your Answers the Same As Experts’? — 第一财经

MOTOHIRO YOGO z Finance Award Winners Recommend GPIF Raises Foreign Debt Target — Bloomberg

OWEN ZIDAR z Economists Are Rethinking the Numbers on Inequality — The Economist z Economists Question the Benefits of Targeted Tax Breaks — The Wall Street Journal z New Study Says Large Incentive Deals Don’t Spur Growth at State and Local Level — The News & Observer z More Evidence Tax Incentives Don’t Spur Development — Forbes z Too Rosy? Experts Question Warren’s Wealth Tax Figures — The Associated Press

CECILIA E. ROUSE

z Beware of Economic Theories Claiming to Explain Everything — Bloomberg Opinion

z 16 Powerhouse Female Economists — Thrive Global

z Trickle-Down Theory Is a Monstrous Lie Intended to Justify the Rich Getting Richer — Los Angeles Times Column

WEI XIONG

z Just 4% of Companies Boosted Hiring Because of Tax Cuts — CNN

ELDAR SHAFIR z People Think You’re More Competent When You Wear Expensive Clothes, According to New Princeton research — Business Insider z “Rich” or “Poor” Clothing Affects Split-Second Decisions about Competence — Forbes z The “Law” That Explains Why You Can’t Get Anything Done — BBC Worklife

z Deflating a Bubble Before It Bursts Would Be Huge — Bloomberg Opinion z Housing Speculation, GovernmentFunded R&D, and More — Brookings z Greater Bay Area Economic and Development Forum Held in Shenzhen, Bay Area Will Become Financial Locomotive in Mainland China — 大湾区时报

z Do High Local Taxes Really Hurt Economic Growth? — Kellogg Insight z Don’t Be So Sure That Tax Cuts Are Good for Startups — Bloomberg Opinion z Never Mind the 1 percent. Let’s Talk about the 0.01 Percent — Qrius

z Fortunately, There Is No Ma Yun This Time — 新浪科技

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RESEARCHERS

visitors, fellows and postdoctoral associates T

he Center hosts outstanding

multi-strategy global investment fund

work studies how politics, financial

researchers and practitioners at any

based in New York. He received his

regulations and legal frameworks

career stage working at the intersection

B.A. from Yale University in political

determine which firms and households

of finance and public policy. Researchers

science, an M.Phil. in international

get access to credit in the economy and

join the Center as Postdoctoral Research

relations from the University of

what the macroeconomic consequences

Scholars, Visiting Fellows or Graduate

Cambridge and a master’s in Public

may be. His second stream of research

Exchange Students.

Policy from Harvard University’s

shows that social media—particularly if

Kennedy School of Government. He is

used by powerful individuals—can be

a member of the Council on Foreign

an important propagating mechanism

Relations, an Associate Fellow of Ezra

for anti-minority sentiments and hate

Stiles College at Yale University and a

crimes. Müller earned his Ph.D. in

Chazen Professional Fellow at

business and management from the

Columbia Business School.

University of Warwick in 2018.

DONAL BYARD, Visiting Lecturer in Economics. Donal Byard is a Professor of Accounting at Baruch College, City University of New York (CUNY). He earned a Ph.D. in accounting from the University of Maryland and specializes in teaching financial accounting. His research has been published in journals such as the Journal of Accounting Research, The Accounting Review and Contemporary Accounting Research; he also serves on the editorial advisory board for a number of accounting academic journals. In 2008–2009, he served as an academic fellow in the Chief Accountants Office of the U.S. Securities and Exchange Commission.

JEAN-CHRISTOPHE DE SWAAN, Visiting Lecturer in Economics.

Jean-Christophe de Swaan teaches courses on ethics in finance and Asian capital markets, and acts as a faculty adviser to freshmen and sophomore students. He also teaches at the Judge Business School at the University of Cambridge. He is a partner at Cornwall Capital, a

12

KARIM NCHARE FOGAM, Visiting

Postdoctoral Research

Scholar in Politics.

Associate. Andres Sarto’s

Karim Nchare Fogam

ANDRES SARTO,

research studies the

holds an M.Sc. in economics from the

implications of microeconomic and

University of Montreal and a Ph.D. in

regional interactions for macroeconomic

economics from Pennsylvania State

outcomes, from an applied,

University with a concentration in

methodological and theoretical

econometrics. He is a resident visiting

perspective. One line of research

scholar at Princeton University’s

investigates new ways of leveraging

Department of Politics and an Assistant

regional variation across time to

Professor at the African School of

estimate macroeconomic elasticities at

Economics. His research interests

the national level, both in linear and

include applications of causal inference

non-linear economies. In other work, he

techniques and nonparametric methods

focuses on the relationship between

to policy evaluation and industrial

government intervention in the banking

organization.

sector and long-run growth, providing a novel mechanism to explain why this

KARSTEN MÜLLER,

intervention might reduce the growth

Postdoctoral Research

rate in economies with a less developed

Associate. Karsten

financial sector. He received his Ph.D.

Müller’s research

in economics from MIT in 2019.

focuses on finance, macroeconomics and political economy. One line of his

RESEARCHERS

visitors, fellows and postdoctoral associates predoctoral researchers The Center’s predoctoral research program, started in 2014, serves as a bridge to doctoral programs in economics and finance. The predoctoral research assistants spend 1-2 years working closely with faculty on a variety of empirical research projects and have the opportunity to take graduate-level courses in economics and finance. The Center funds three full-time predoctoral fellowships every year. Fellows have typically gone on to top Ph.D. programs in economics and finance.

IAN SAPOLLNIK, Senior Research Specialist. Ian Sapollnik received his B.A. Honors

in economics from the University of

economic and social sciences at Bocconi

British Columbia, where he also worked

University and a B.Sc. in economics and

as a research assistant for a number of

finance from the same university, during

years. He previously worked as an

which time he was a visiting student at

analyst in the International Trade and

the University of Hong Kong. His

Finance branch of the Department of

research interests lie in macroeconomics,

Finance Canada. His research interests

finance and time series.

include household finance, poverty and inequality, and macro policy.

CRISTOFORO PIZZIMENTI, Senior

CARL CHRISTIAN KONTZ, Senior Research Specialist. Carl Christian Kontz joined the Center

Research Specialist.

in July 2018. Prior to this, he completed

Cristoforo Pizzimenti

an M.Sc. in international trade, finance,

joined the Center in August 2019. Prior

and development at the Barcelona

to this, he worked at the European

Graduate School of Economics and a

Central Bank as a trainee in the

B.Sc. in economics from the University

Forecasting and Policy Modelling

of Hamburg. He previously worked

Division. He also interned at the Bank

with BDO and as a research assistant

of England and the European

with the University of Hamburg. His

Commission in Luxembourg. He

research interests lie in

previously obtained an M.Sc. in

macroeconomics, finance and growth.

13

RESEARCH INITIATIVES

macrofinance lab

A

n initiative of the Julis-Rabinowitz Center, the Macrofinance Lab

(macrofinance.princeton.edu) is dedicated to the study of the

FACULTY

z Kwok Hao Lee

macroeconomy. The lab encourages

z Natalie Marie Bachas

z Ziang Li

employing advanced micro-empirical

z Moritz Lenel

z Dake Li

techniques and microeoconomic data

z Ernest Liu

z Jialiang Lin

sets to test economic models in order

z Adrien Matray

z Yann M. Koby

to answer fundamental questions about

z Atif Mian

z Daniel Morrison

the interaction of finance and the macro

z David Schoenherr

z Georgios Nikolakoudis

economy.

z Arlene Wong

z Don Noh

The lab brings together faculty,

POSTDOCTORAL RESEARCHERS

connections between finance and the

postdoctoral researchers, graduate and undergraduate students to collaborate on macrofinance empirical projects.

It supports student research from the conceptual stage to publishable product by z convening regular informal research brainstorming/early ideas meetings (twice per semester) z facilitating access to data sources by exploiting the lab’s connections with outside institutions (e.g., Central Banks) z funding summer research, data acquisition and conference travel cost for students z matching advanced graduate students with qualified undergraduate research assistants The Governor’s Woods Foundation recently made a gift to the Center to support Karsten Müller’s original work on sectoral debt and business cycles.

14

affiliated faculty, researchers and students

z Shumiao Ouyang z Sebastian Roelsgaard

z Karsten Müller

z Raúl Rosales Guadarrama

z Andres Sarto

z Rafael Schwalb z Jihong Song

PH.D. STUDENTS

z Ruairidh South

z Patrick Agte

z Peng Wang

z Narek Alexanian

z Christian K. Wolf

z Lukas Althoff

z Kecy Wu

z Francisco Cabezon

z Sifan Xue

z Juan Manuel Castro Vincenzi

z Fangyuan Yi

z Anshu Chen

z Chansik Yoon

z Abhishek Gaurav

z Haiyue Yu

z Faizaan Kisat z Binyamin Kleinman Orleansky z Thomas Kroen

z Jason Zhang z Haonan Zhou

dissertation fellows 2019–2020 Name

Project

Dataset

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

Yann Koby & Christian Wolf

Monetary Policy Shocks and the Banking System

Household and bank microdata for the US

RESEARCH INITIATIVES

workshops

economic history workshop An initiative of the Julis-Rabinowitz Center, the Economic History Workshop (ehw.princeton.edu) is a monthly seminar series dedicated to the study of economic history.

Co-sponsored by the Department of History, the workshop provides an open forum for faculty, scholars and students to discuss research, ideas and historiographical methodologies within the field of economic history, broadly construed. The workshop has brought seven visitors to speak on campus and organized three student seminars for doctoral students in economic history to present their work to a multidisciplinary audience.

financial economics of insurance workshop The 2nd Annual Workshop on the Financial Economics of Insurance Workshop (insurance.princeton.edu) was held at Princeton University on June 7–8, 2019. Organized by Profs. Motohiro Yogo and Ralph Koijen, the goal of the workshop is to highlight the importance of the insurance sector (outside of health) and to develop a unifying framework to think about supply and demand in insurance markets.

The workshops build on and extend the literature on institutional finance, particularly the study of how financial

affiliated faculty Harold James, Claude and Lore Kelly Professor in European Studies; Professor of History and International Affairs Leah Boustan, Professor of Economics Michael Bordo, Professor of Economics and Director of the Center for Monetary and Financial History, Rutgers University

affiliated ph.d. students z Zehra Ahmed z Lukas Althoff

z Lianne Hewitt, Coordinator

z Lawrence Anglin (Princeton Theological Seminary)

z Tristan Hughes

z Friedrich Asschenfeldt

z Giovanni Pala

z Bianca Centrone

z Pablo Pryluka

z Laura Channing

z Jonathan Raspe

z Adhitya Dhanapal

z Neel Thakkar

z Kate Epstein (Rutgers)

z Caitlin Tully

z Rebecca Giblon

z Peng Wang

z Jack Guenther

z Robert Yee, Coordinator

z Peter Koczanski

and regulatory frictions affect prices and allocations when institutions act as intermediaries in financial markets. The workshop is an opportunity for doctoral students to share their own work and interact with leading thinkers in the field. The meeting was supported by funding from the National Science Foundation and the Bendheim Center for Finance.

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

z Johanna Gautier Morin

15

TEACHING & LEARNING

student associates T

he Julis-Rabinowitz Center for Public Policy and

six speakers, organized a conference on Global Governance

Finance’s Student Associates program for undergraduate

U.S.-China, the Ivy Innovation Summit and the Princeton

and graduate students fosters collaboration between students

Summit on Africa. Student associates also held small-group

and faculty in order to enhance learning and research about

mentoring events, and pursued independent research and

financial markets.

summer internships in the public and non-profit sectors.

This year, the Student Associates program drew close to 90 undergraduates and graduate students who enjoyed unparalleled opportunities to interact with center-affiliated faculty, contribute to research, and meet high-profile speakers and visitors from government, academia and industry. With the Center’s support, student 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

2018–19 Student Associates

16

Last year, the student associates launched the Policy Punchline podcast series, with support from the Center.

Hosted by Tiger Gao ’21, the podcast is fully run by students from Princeton and other institutions. Each episode features an in-depth interview with a scholar, policy maker, executive or entrepreneur, including many prominent alumni. The series has published 42 episodes, offering insightful perspectives and a unique cultural and academic product to audiences beyond the Princeton community.

TEACHING & LEARNING

student associates summer internship program Since 2014, JRCPPF’s summer internship program has supported undergraduate associates who want to pursue an unpaid opportunity in the areas of financial markets and public policy either in the U.S. or abroad. In summer 2019, JRCPPF funded six students working in government agencies, think-tanks and international development organizations. These internship opportunities allow students to hone their economics and finance policy skills, grow their professional networks, and gain valuable professional experience. Reflecting on his summer experience, Leland Domaratzky ’22 noted, “I might read something in the Wall Street Journal during my commute and later that day, I would assist staff in writing a memo about the matter. It showed me how active the role of a regulator is. I felt I was one of the ’players’ making up the news cycle that week.”

summer 2019 interns BRADLEY SPICHER ’20: Commerce Department, Division of International Trade Administration

KYLE ZELENITZ ’21: Commerce Department, Division of International Trade Administration

MADELINE SONG ’21: Securities and Exchange Commission’s Student Honors Internship Program, Office of Corporate Finance

LELAND DOMARATZKY ’22: Securities and Exchange Commission’s Student Honors Internship Program, Office of Corporate Division of Trading and Markets

COLIN MOFFET ’21: ifo Institute of the Leibniz Institute for Economic Research, University of Munich

PAMELLA SEBEZA ’21: One Acre Fund Rwanda

17

TEACHING & LEARNING

student associates

2019–2020 undergraduate associates z Jacob Alayof ’23

z Julie (Chengzhi) Fang ’22 (Events Director)

z Jonathan Lam ’20

z Yasmine Shafaie ’21

z Sarel Anbar ’21

z Samuel Lee ’22

z Samantha Shapiro ’21

z Luc Anderson ’22

z Jiangying Gao ’22

z Aaron Leung ’23

z Bradley Spicher ’20

z Arman Badrei ’22

z (Outreach Director)

z Sophia Lewandrowski ’22

z Gabriel Swagel ’20

z Abhimanyu Banerjee ’23

z Morgan Mills ’21

z Ricardo Talini Lapi ’21

z George H. Baughan ’21

z Miaokuan (Tiger) Gao ’21 (Co-Chair)

z Sophia Taylor ’20

z Jacob Berman ’20 (Vice-Chair)

z David Garfunkel ’20

z Brandon Mintzer 20

z Nicholas Garvey ’20

z Emiri Morita ’21

z Misha Tseitlin ’21

z Roxana Biglari ’20

z Benjamin Gelman ’22

z Maharan Murshed ’21

z Charles H. Thompson ’21 (Co-Chair)

z William Chamberlain ’21

z Kenneth D. Gonzalez Santibanez ’22

z Adam Chang ’20 z Alexander Cheng ’21 z Audrey Cheng ’20 z Emily Cheston ’21 z Maxwell Chung ’21 z Will Crawford ’20 z Allen Dai ’22 z Anna De Bernardi ’23 z Guillermo de la Torre ’22 z Leland Domaratzky ’22 (Director of Finance Fridays)

z Eric Guerci ’21 z Aatmik Gupta ’22 z Joshua Haile ’22 (Recruitment Director) z Addele Hargenrader ’23 z Grace Hong ’21 z Stephanie Hu ’21 z Rohan Joshi ’21 z Kanishkh Kanodia ’23 z Ethan Katz ’21 z Julie Kim ’21

z Mohammed Elzubeir ’22

z Roy Kim ’22

z Owen Engel ’21

z Sean Kim ’21

z Mouhamed Ndiaye ’22 z Scott Newman ’21 z Scott Overbey ’21 z Victoria Pan ’21 z Phoebe Park ’21 z Max Parsons ’20 z Emily Philippides ’22 z Andre M. Radensky ’21 z Rooya Rahin ’23 z Bailey Ransom ’22 z Nicholas Ritter ’20 z Thomas Salotti ’21 z Terrell (Gregory) Seabrooks ’21 z Pamella Sebeza ’21

z Roopa Venkatraman ’22 (Communications Director) z Christopher Walton ’21 z Michael Wang ’21 z Sean Wang ’22 z Alexandra Wilson ’20 z Cathy Wu ’21 z Jason Xu ’20 z Raymond Xu ’21 z Richard Yang ’22 z Tony Ye ’23 z Kevin Yu ’20 z Kyle Zelenitz ’21 z Eric Zhao ’20

2019–2020 graduate associates z Nathan Babb, MPA-Economics & Public Policy

z Michael Lachanski, MPA-Economics & Public Policy

z Peter Birke, MPA-Economics & Public Policy

z Sophia J. Li, Ph.D. Student, Sociology Department

z Alice Chang, MPA-Economics & Public Policy

z Paul Nix, Ph.D. Student, WWS

z Anthony Chase, MPA-Domestic Policy

z Eric Parolin, MPA, Economics & Public Policy

z Pat W. Farrell, MPA-Economics & Public Policy

z Dylan Sullivan, MPP, Economics & Public Policy

z Gokul Gopalan Ramachandran, MPA- Economics & Public Policy

z Brody Viney, MPA-Economics & Public Policy

z Liane M. Hewitt, Ph.D. Student, History Department

z Robert A. Yee, Ph.D. Student, History Department

z Anne Kuhnen, MPA-Economics & Public Policy

18

z David Wylie, MPA-Economics & Public Policy

TEACHING & LEARNING

student associates undergraduate associates class of 2019 z Bassam J. Alalawi, Honors

z Luca T. Rade

z Hamza Chaudhry

z Kiara V. Rodriguez Gallego

z Marina T. Finley

z Eitan Sapiro-Gheiler, Highest Honors

z George Grealy, Highest Honors

z Rebecca Sobel, High Honors

z Abhiram Karuppur (Chair), Highest Honors, Certificate of Finance

z Caleb South

z Ian Kim

z Cara Yi

z Brandon S. Lee

z Alis Yoo

z Jean (Yoon Jee) Lee

z Julia M. Zielczynska (Vice-Chair), Honors, Certificate of Finance

z Reed Melchionda, Highest Honors, Certificate of Finance

z Tammy Tseng, Highest Honors

class of 2019 theses A requirement for a bachelor of arts is the senior thesis which

System Perpetuates Inequality of Opportunities for Migrant

provides Princeton students the opportunity to develop their

Children in the People’s Republic of China.

scholarly interest and to evolve as independent thinkers. The students work one-on-one with a faculty member who guides them through the process. Undergraduate associates of the class of 2019 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

EITAN SAPIRO-GHEILER, Advisor: Roland Bénabou.

Cheap Talk Games with Sequential Posterior Formation.

GEORGE GREALY, Advisor: Swati Bhatt. Who Wins in Spinoffs and Why: Investigating the StockholderBondholder Conflict in Corporate Spinoffs Via Information from CDS Markets.

exceptional group of young thinkers who are soon to enter

ABHIRAM KARUPPUR, Advisor: Brad Carrow. Synthesis

careers in finance or public policy, launch their own startup or

and Evaluation of Novel A-Site Ligands for 2D Perovskites

continue their studies in law or other fields.

for Use in Studying Charge and Energy Transfer in Quantum-Confined Systems.

BASSAM J. ALALAWI, Advisor: Natalie Marie Bachas. A Comparison of Mutual Fund and ETF Expense Ratios as Indicators of Financial Performance.

HAMZA CHAUDHRY, Advisor: Atif Mian. Property Taxes

IAN KIM, Advisor: Aaron Shkuda. If You Build It, They Will Come”: An Analysis of Expansionary Construction Policies in South Korea’s Otherwise Shrinking Small-toMedium Sized Cities.

and the American Dream: New Discoveries.

BRANDON S. LEE, Advisor: Barbara Buckinx. The

MARINA FINLEY, Advisor: Martin Flaherty. Social

Underperformance of the North Korean Human Rights

Mobility with Chinese Characteristics: How the Hùkǒu

Act: A Study on the Politicization of North Korean Human Rights in the United States.

19

TEACHING & LEARNING

student associates JEAN LEE, Advisor: Iqbal Zaidi. Capital Optimization: A

CALEB SOUTH, Advisors: Jonathan Fickenscher, Leeat

Multi-Country Study of the Effect of the Basel Accord on

Yariv. Communication and Correlated Equilibria in First-

Bank Lending.

Price Auctions.

REED MELCHIONDA, Advisor: Yacine Ait-Sahalia. All

TAMMY TSENG, Advisor: Leah Boustan. White Flight from

Shocks Are (Not) Created Equal: Intra-Industry Valuation

Asian Immigration: Evidence from California Schools.

Effects Following Large Stock Price Shocks.

LUCA RADE, Advisor: Simon Levin. Extended Emulation Theory.

CARA YI, Advisor: Daniel Kurtzer. U.S. Secondary Sanctions on Iran.

ALIS YOO, Advisor: Rosina Lozano. An Admirable Cross

KIARA RODRIGUEZ GALLEGO, Advisor: Rory Truex.

between Fellow Toilers: Reframing the Rhetoric and Reality

Conceptualizing Borders: A Case Study Analysis of Chinese

of Chinese-Irish Relations during the Chinese Exclusion

Behavior in Frontier Disputes.

Era, 1850-1902.

REBECCA SOBEL, Advisor: Lisa Bilir. The Impact of

JULIA ZIELCZYNSKA, Advisor: Stephen Redding. The

Environmental Classifications on Tourist Arrivals and

Effects of Foreign Direct Investment on the European

Willingness to Pay for Conservation: A Case Study of the

Domestic Economy through Horizontal and Vertical

Galapagos Islands.

Technology Spillovers.

2019 prize and award winners John Glover Wilson Memorial Award: The best thesis on international economics or politics.

Winner: JULIA ZIELCZYNSKA (Advisor: Professor Stephen Redding) Daniel L. Rubinfeld ’67 Prize in Empirical Economics: Awarded annually for the best thesis in empirical economics.

Winner: TAMMY TSENG (Advisor: Professor Leah Bousant) Wolf Balleisen Memorial Prize: The best thesis on an economics subject, written by an economics major.

Winner: EITAN SAPIRO-GHEILER (Advisor: Professor Roland Bénabou) Halbert White ’72 Prize in Economics: Awarded annually to the most outstanding senior economics major, as evidenced by excellence in departmental coursework, and creativity in the junior papers and senior thesis.

Winner: EITAN SAPIRO-GHEILER (Advisor: Professor Roland Bénabou) Burton G. Malkiel *64 Senior Thesis Prize in Finance: Awarded annually for the most outstanding thesis in the field of finance. Winner: REED MELCHIONDA (Advisor: Professor Yacine Ait-Sahalia) Gayle F. Johnston Prize: Awarded to a senior who has shown both great improvement and achieved excellence in work in the Woodrow Wilson School. Winner: MARINA FINLEY (Advisor: Professor Martin Flaherty) Honor Society – Sigma Xi: ABHIRAM KARUPPUR

20

TEACHING & LEARNING

curriculum selected courses

The courses taught by Center-affiliated faculty provide a multidisciplinary perspective for students interested in pursuing an undergraduate certificate in finance or, at the masters level, the economics and public policy field in the Woodrow Wilson School.

public policy and finance track Now in its 20th year, the Undergraduate Certificate in Finance offered through the Bendheim Center offers students majoring in any department the opportunity to demonstrate their proficiency in the discipline of finance. Seventy-seven

z FRS 149 Ethics in Finance, Jean-Christophe de Swaan

students earned certificates in the Class of 2019. Currently

z ECO 101 Introduction to Macroeconomics, Alan S. Blinder

there are 60 juniors and 89 seniors enrolled in the program.

z ECO 342 Money and Banking, Markus K. Brunnermeier z ECO 361 Financial Accounting, Donal Byard z ECO 362 Financial Investments, Motohiro Yogo z ECO 363 Corporate Finance and Financial Institutions, David Schoenherr

About 75 percent of the students are drawn from the Economics and the Operations Research departments. The public policy and finance track, introduced in 2014–15, includes coursework in public finance, responses to financial crises, central banking, and regulation.

z ECO 461 Entrepreneurial Finance & Private Equity, Natalie Marie Bachas and Gustavo Schwed

Students can opt to follow the public policy and finance

z ECO 468/FIN 568 Behavioral Finance, Natalie Marie Bachas and Wei Xiong

track which was introduced in 2014–2015. The track focuses on the interaction between finance and policy, including

z ECO 491 Cases in Financial Risk Management, Caio Ibsen Rodrigues de Almeida

public finance, responses to financial crises, central banking

z ECO 492/FIN 592 Asian Capital Markets, JeanChristophe de Swaan z ECO 494 / FIN 594 Chinese Financial and Monetary Systems, Wei Xiong z ECO 507 Topics in Empirical Macroeconomics, Atif Mian z ECO 529 Financial and Monetary Economics, Markus K. Brunnermeier

and regulation.

public policy and finance track at a glance ECO361: Financial Accounting ECO491: Cases in Financial Risk Management

z ECO 554 International Monetary Theory and Policy II, Oleg Itskhoki

ECO492: The Rise of Asian Capital Markets

z WWS 340 The Psychology of Decision Making and Judgment, Eldar Shafir

WWS340: Psychology of Decision Making/Judgment

ECO493: Financial Crises

z WWS 466/HIS 467 Financial History, Harold James

WWS466: Financial History

z WWS 582C Growth, International Finance & Crises, Ashoka Mody

WWS582f: Topics in Economics – House of Debt: Understanding Macro & Financial Policy

z WWS 582F House of Debt: Understanding Macro & Financial Policy, Atif Mian z WWS 593B Eurozone Crisis and Beyond, Ashoka Mody z WWS 593I The Future of Fiscal Policy in the US, Owen M. Zidar

REQUIRED CORE COURSES FOR ALL CERTIFICATE PROGRAM PARTICIPANTS ECO362: Financial Investments ECO363: Corporate Finance and Financial Institutions

21

TEACHING & LEARNING

financial markets for public policy professionals N

ow in its 10th year, the intensive three-day short course, Financial Markets for Public Policy Professionals,

2019 program & speakers

to understand the operations of financial institutions, the

UNDERSTANDING THE LANGUAGE OF FINANCE (SEPTEMBER 4)

economic purposes they serve, the markets in which they

Accounting for Policy Makers: Donal Byard, Zicklin

deal and the regulatory environment in which they operate.

School of Business, Baruch College

Since its creation in the fall of 2010 in response to the

FRAMEWORK FOR UNDERSTANDING FINANCIAL MARKETS (SEPTEMBER 5–6)

provides a framework for future public policy professionals

2008 global financial crisis, this unique short course has covered the basics of securities, credit markets, mortgages, and derivatives taught by faculty from Columbia Business School and Princeton University, government officials

Capital Markets, Intermediaries, Liquidity: Lance Eckel, Managing Partner, Finance IQ

and financial industry executives. The core curriculum is

Equity Markets, Fixed Income Markets, & Other

complemented with a series of lectures and panel discussions

Markets: Lance Eckel, Managing Partner, Finance IQ

that have evolved over time and include topics such as

Mortgages, Derivatives, and the Housing: Michael

cryptocurrencies, financial crises, international finance, and Dodd-Frank legislation. To familiarize students with the language of finance, the course began with an overview of accounting for policy makers led by Visiting Professor Donal Byard of Baruch College.

Johannes, Ann F. Kaplan Professor of Business, Columbia Business School Shadow Banking, Credit, and Capital Markets: Michael Johannes, Ann F. Kaplan Professor of Business, Columbia Business School Financial Bubbles and Crises—a Historical Perspective: Karsten Müller, Postdoctoral Research Associate, JRCPPF, Princeton University

2019 short course at a glance Date: September 4–7, 2019 Audience: 42 MPA & MPP students Topics: Accounting principles, financial markets,

FEATURED TOPICS (SEPTEMBER 7) Municipal Bond Markets: RJ Gallo, Head, Municipal Bond Investment Group, Federated Investors Two to Tango: Private Equity’s Partnership Model: Noah

regulations and policy

Gottdiener, CEO and Chairman, Duff & Phelps

Financial support: Noah Gottdiener ’78

International Financial Markets: Ashoka Mody, Charles

More info: https://jrc.princeton.edu/teaching/fmpp

and Marie Robertson Visiting Professor in International Economic Policy, Princeton University National and International Financial Regulation: Charles Yi, Partner, Arnold & Porter

22

TEACHING & LEARNING

financial markets for public policy professionals

“

I had limited fluency in financial markets and related terminology before this course. Although the course could only function as an introduction to finance and markets, I was amazed by how much we covered and how much

I absorbed over the three days. I was very impressed by the range of speakers— both scholars and practitioners—who joined us. And it was great to have some WWS alums as well.”

“ “ “

I felt the value of the course was incredible. By providing a broad yet deep understanding of financial markets and the details of the 2008 crisis, the course armed us with the tools and vocabulary to understand and address

future financial issues.”

and allowed for great introductory understanding to the more complex

I have worked in finance in the past and still found this course to be very useful. The deep dives had excellent professors and walked through a

tremendous amount of material. It was a good refresher and taught me a lot I didn’t know!”

Would recommend this course to others: y Absolutely . . . . . . . . . . . . . . 53% y Yes, with enthusiasm . . . . . 20% y Yes . . . . . . . . . . . . . . . . . . . . 27% Likely to take similar courses in future? y Extremely likely . . . . . . . . . 43% y Somewhat likely . . . . . . . . . 33% y Somewhat unlikely . . . . . . . 23% Quantity/quality of subject matter learned:

This course was extremely valuable! The setup of the course was fantastic topics covered.”

student feedback

y An amazing amount . . . . . . 59% y A lot . . . . . . . . . . . . . . . . . . . 38% y Moderate amount . . . . . . . . 3%

“

I found this extremely useful. I have worked in related policy areas in the past and feel like I knew much of this content in a vague way. Having a comprehensive

short course allowed me to confirm and solidify what I already knew and integrate it in a broader framework.”

23

CENTER EVENTS

highlights

D

uring the period February 2019–February 2020, the

history—and whether it would continue. The Griswold

JRCPPF hosted and co-hosted over 25 events including

Center co-sponsored the October 10, 2019, event.

conferences, lectures, student and faculty seminars and informal gatherings.

The Center’s program of events is designed to complement classroom learning, foster innovative research, and engage with policy makers and industry professionals.

The Center sponsored two book talks in 2019, with several more planned for Spring 2020. On February 28, 2019, economic historian ADAM TOOZE talked about his book

Crashed: How a Decade of Financial Crises Changed the World. The Economist lists Crashed as one of best books of 2018. Economist EMMANUEL SAEZ discussed his book, The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay, on October 22, 2019, at an event co-sponsored by the Griswold Center for Economic Policy Studies.

In partnership with the Bendheim Center for Finance, the Center hosted JOYCE CHANG *90, Chair of Global Research at J.P. Morgan’s Corporate and Investment Bank, who provided an overview of the global macroeconomy, highlighting trends in labor markets, corporate and household debt, trade, and a range of socio-political factors.

JRCPPF’s Student Associates led the organization of a number of events including the following: z GOVERNOR LAEL BRAINARD of the U.S. Federal Reserve Board, who gave a lecture on March 7, 2019, about economic and monetary policy titled “Navigating Cautiously.” z Finance industry leaders JAMES E. KEENAN (CFA, Managing Director, Chief Investment Officer, and

On April 18, 2019, the JRCPPF and the Griswold Center

Global Co-Head of Credit, BlackRock Alternative

for Economic Policy Studies co-sponsored a talk on state

Investors) and ANNE LESTER, (portfolio manager and

fragility, growth and development by SIR TIM BESLEY

Head of Retirement Solutions for J.P. Morgan Asset

from the London School of Economics and Political Science.

Management’s Global Investment Management Solutions) spoke on a panel moderated by William Dudley on March

HIS EXCELLENCY NANA AKUFO-ADDO, President of the Republic of Ghana, spoke at Princeton University on September 20, 2019, at an event co-sponsored by JRCPPF and the Program in African Studies at Princeton. AkufoAddo addressed the barriers to economic progress in Ghana and the need for expanding access to education.

On October 2, 2019, PETRA MOSER of New York University spoke to students and faculty at the Economic History Workshop at Princeton University about the relationship between patenting, piracy, and innovation.

WILLIAM DUDLEY, visiting scholar and former president of the New York Federal Reserve Bank, spoke about the current economic expansion—the longest in U.S.

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28, 2019. z DAN M. BERKOVITZ, Commissioner of the Commodity Futures Trading Commission, who gave an April 4, 2019, talk titled “Disarming Financial Weapons of Mass Destruction: Implementing the Dodd-Frank Act.” z ARVIND PANAGARIYA *78, Professor of Economics and the Jagdish Bhagwati Professor of Indian Political Economy at Columbia University, evaluated India’s economic reforms and its future outlook at an event moderated by Prof. Atul Kohli on April 11, 2019.

CENTER EVENTS

highlights

8th annual conference: radical mechanisms 10 years after the financial crisis

On February 21-22, 2019, the Center hosted its 8th Annual Conference, exploring new ideas and mechanism designs aimed at addressing some of the most pressing issues facing financial markets and the macroeconomy. Ten years after the financial crisis, soaring inequality and stagnant productivity are exerting increasing pressure on global capitalism.

At the same time, prevailing economic policies are discredited and politics are increasingly polarized. Can the system be fixed? Should we embrace traditional policies or is fundamental change the only way out? This conference examined radical proposal to change key aspects of modern societies including property rights, taxation, decentralization, competition and voting, in the hope of building a better world.

GLEN WEYL, Microsoft Researcher and Visiting Research Scholar at Princeton University, delivered a keynote on the political economy of increasing returns. He argued for a system where we have “near-optimal emergent public goods funded by efficiency-enhancing taxes that move us beyond private property and governed by a near-optimal voting creating a world that breaks apart the divide between corporations, economics, individuals on the one hand and nations, politics and collectives on the other.�

Glen Weyl

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CENTER EVENTS

calendar

Date

Event

Audience SPRING 2019

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Feb. 21–22

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 Univ. (Economic History Workshop)

Princeton University faculty, staff, and students

Mar. 7

Governor Lael Brainard, U.S. 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. 28

Finance Industry Panel: What's Changed Since 2008 and What's Ahead?, Jim Keenan (BlackRock), Anne Lester (J.P. Morgan)

Open to the public

Mar. 28

Trade, Law and the Global Order of 1919, Patricia Clavin, Oxford Univ.

(Economic History Workshop)

Princeton University faculty, staff, and students

Apr. 3–7

Princeton U.S.-China Coalition Global Governance Forum

Selected students from Princeton and other institutions.

Apr. 4

Dan M. Berkovitz ’78, Commissioner of the Commodity Futures Trading Commission

Open to the public

Apr. 4

The Political Economy of Secrecy, Katherine Epstein, Rutgers Univ.

(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. 11

The Indian Economy, Arvind Panagariya *78, Columbia University

Princeton University faculty, staff, and students

Apr. 11–12

Insights on Health Policy: A conference in tribute to Uwe Reinhardt

Princeton University faculty, staff, and students

Apr. 12–14

The Ivy Innovation Conference

Princeton University students

Apr. 17

An Accidental Brexit: Economic Disintegration -Neither Rhyme, Nor Reason, Paul Welfens, Univ. of Wuppertal

Princeton University faculty, staff, and students

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. 25

Norm Champ ’85, Former Director, SEC Investment Management

Princeton University faculty, staff, and students

Apr. 30

Argentina Under Pressure Again: What happened? What’s happening?

What’s next?, Demian Reidel, Harvard Kennedy School

Princeton University faculty, staff, and students

May 8th

Student Associates Recognition Lunch

Staff, Faculty, Student associates

CENTER EVENTS

calendar

Date

Event

Audience FALL 2019

Sep. 20

A Public Conversation with His Excellency Nana Addo Dankwa AkufoAddo, President of the Republic of Ghana

Ticketed event. Open to the public.

Oct. 2

Pirates and Patents: An Economic History of Innovation in Europe and the United States, Petra Moser, New York Univ. (Economic History Workshop)

Princeton University faculty, staff, and students

Oct. 10

The Longest Economic Expansion in U.S. History—Can It Keep Going?, William Dudley

Open to the public

Oct. 22

The Triumph of Injustice, Emmanuel Saez, UC Berkeley

Open to the public

Oct. 23

Euro Area Architecture: What Reforms Are Still Needed and Why?, Pierre-Olivier Gourinchas, Berkeley Economics, Univ. of California

Princeton University faculty, staff, and students

Oct. 24

Organizing the World: Planning and Engineering in Cold War Europe, Sandrine Kott, Univ. of Geneva (Economic History Workshop)

Princeton University faculty, staff, and students

Nov. 6

General Laws and the Transformation of Government in the MidNineteenth-Century United States, Naomi Lamoureax, Yale Univ.

(Economic History Workshop)

Princeton University faculty, staff, and students

Nov. 14

Global Macro and Market Changes and Vulnerabilities & Challenges: What Lies Ahead?, Joyce Chang *90, J.P. Morgan

Princeton University faculty, staff, and students

SPRING 2020 Jan. 22

Money and Government: Can We Do Better?, Robert Skidelsky, Warwick Univ. (Economic History Workshop)

Princeton University faculty, staff, and students

Feb. 6

Book Talk: "The Great Reversal: How America Gave Up on Free Markets," Thomas Philippon, Max L. Heine Professor of Finance, NYU

Open to the public

Feb. 20–21

Development Finance in Fragile States, JRCPPF 9th Annual Conference

Ticketed event. Open to the public.

Feb. 27

Book Talk: "Capitalism, Alone: The Future of the System that Rules the World," Branko Milanović, CUNY

Open to the public

Mar. 5

Fintech and Challenges for SEC Enforcement, Stephanie Avakian, CoDirector, Division of Enforcement, SEC

Open to the public

Mar. 9

Pradeep Tharakan, Principal Energy Specialist, Asian Development Bank

Princeton University faculty, staff, and students

Mar. 11

Book Talk: "Transaction Man: The Rise of the Deal and the Decline of the American Dream," Nicholas Lemann, Columbia Journalism School

Open to the public

Apr. 7

Diana Farrell, President and CEO, J.P. Morgan Chase Institute

Open to the public

Apr. 14

Book Talk: "Capital and Ideology," by Thomas Piketty, L’École des Hautes Études en Sciences Sociales

Ticketed event. Open to the public.

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LEADERSHIP

external advisory council PHILIP BENNETT,

MARK GENENDER,

Board Director, Standard

Bristol Growth Capital,

CHRISTOPHER MARKS, Mitsubishi

& Poor’s Global Ratings

LLC

UFJ Financial Group

and Convergence; Senior Advisor, Ripplewood and Endeavor Global

PIERRE M. GENTIN, McKinsey & Company,

MICHAEL BORDO,

Inc

DEAN MENEGAS, Spinnaker Capital Group

Rutgers University

ROBERT A. JOHNSON, Institute for WOODY BROCK, Strategic Economic Decisions, Inc.

New Economic Thinking (INET)

MITCHELL R. JULIS, Canyon Partners, LLC

JOYCE CHANG, JP

BING SHEN, Director, Far Eastern International Bank

Morgan Chase & Co.

JOE LONSDALE, 8VC, Palantir, Adeppar

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JEFFREY SHAFER, S&P Global Ratings

executive committee

administration PALLAVI NUKA,

ATIF MIAN, Director, Julis-Rabinowitz

Associate Director

Center for Public Policy & Finance; John H. Laporte, Jr. Class of 1967 Professor of Economics, Public Policy and Finance

NANCY TURCO,

ALAN S. BLINDER, Gordon S. Rentschler

Program Coordinator

Memorial Professor of Economics and Public Affairs

MARKUS K. BRUNNERMEIER, Edwards S. Sanford Professor of Economics and Director, Bendheim Center for Finance

Editor: Pallavi Nuka Design: Nita Congress

HAROLD JAMES, Claude and Lore Kelly

Photo credits: Sameer Khan, Sam Dearden, Nancy

Professor in European Studies, Professor of

Turco, Tiger Gao, Pallavi Nuka, Dan Komoda,

History and International Affairs, and

Princeton Office of Communications

Director, Program in Contemporary European Politics and Society

NOLAN MCCARTY, Susan Dod Brown Professor of Politics and Public Affairs

CECILIA E. ROUSE, Dean, Woodrow Wilson School of Public and International Affairs; Lawrence and Shirley Katzman and Lewis and Anna Ernst Professor in Economics and Education; Professor of Economics and Public Affairs

WEI XIONG, Hugh Leander and Mary Trumbull Adams Professor for the Study of Investment and Financial Markets

Copyright © 2020 by the Trustees of Princeton University In the Nation’s Service and the Service of Humanity

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