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 Reconstruction and Inter-American Dialogue, she also 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., M.P.A. from Princeton. 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 Before joining McKinsey as 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 Distinguished Professor of on the Forum’s Global Agenda Council. 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 spans economic and financial history, Research at JP Morgan, Joyce Chang University and Columbia Law School. 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 Thinking (INET). Robert 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 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, and Lore Kelly Professor in ADRIEN MATRAY, Otto A. Hack 1903 Professor European Studies, Professor Assistant Professor of of Finance and Economics of History and International Affairs, Economics and Director, Program in Contemporary NATALIE MARIE European Politics and Society* NOLAN MCCARTY, BACHAS, Assistant Susan Dod Brown Professor Professor of Economics JAKUB KASTL, Professor of Politics and Public Affairs* of Economics ROLAND J.M. ASHOKA MODY, Charles BÉNABOU, Theodore A. and Marie Robertson Visiting Wells ‘29 Professor of NOBUHIRO KIYOTAKI, Professor in International Economics and Public Affairs Harold H. Helm ‘20 Professor Economic Policy of Economics and Banking
ALAN S. BLINDER, BENJAMIN MOLL, Gordon S. Rentschler HENRIK J. KLEVEN, Professor of Economics and Memorial Professor of Professor of Economics and International Affairs Economics and Public Affairs* Public Affairs CECILIA E. ROUSE, Dean, MARKUS K. ALAN B. KRUEGER, Woodrow Wilson School of BRUNNERMEIER, Lynn Bendheim Thoman, Public and International Edwards S. Sanford Professor Class of 1976, and Robert Affairs and Lawrence and Shirley of Economics and Director, Bendheim Bendheim, Class of 1937, Professor of Katzman and Lewis and Anna Ernst Center for Finance* Economics and Public Policy, Woodrow Professor in the Economics of Education, Wilson School* Professor of Economics and Public MIGUEL A. CENTENO, Affairs* Musgrave Professor of MORITZ LENEL, Assistant Sociology, Professor of Professor of Economics Sociology and International Affairs
* Denotes Executive Committee member. 3 FACULTY: 2018–2019 CENTER AFFILIATES
DAVID SCHOENHERR, LEONARD WEI XIONG, Hugh Leander Assistant Professor of WANTCHEKON, Professor and Mary Trumbull Adams Economics of Politics and International Professor for the Study of Affairs 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
OWEN ZIDAR, Assistant CHRISTOPHER A. SIMS, Professor of Economics and John F. Sherrerd ‘52 Professor Public Affairs of Economics
Photo: Princeton University, Office of Communications, Denise Applewhite (2017) 4 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 ATIF MIAN, Center Director, John H. Laporte, Jr. Class of 1967 Professor of Economics, Public Policy NATALIE MARIE BACHAS, Assistant Professor 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 MOTOHIRO YOGO, Professor of Economics. inclusion. One strand of research looks at aspects of financial Yogo’s fields of expertise are financial economics, inclusion for low-income households and minorities both in 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 predictability. JAMES’ acclaimed book The Euro and the Battle 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 NEWS published in the Journal of Political Economy. Using a unique 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 Fellows of the Econometric Society. KARSTEN MÜLLER with co-author Carlo Schwarz has investigated the link between social media and hate crime Alexandre Mas was named the William S. Tod Professor of using Facebook and twitter data. The paper, “Fanning the Economics and Public Affairs. Flames of Hate: Social Media and Hate Crime,” studies the rise of anti-refugee sentiment in Germany. A related Benjamin Moll won the 17th Edition of the Bernácer Prize, paper, “Making America Hate Again? Twitter and Hate awarded annually to European economists under the age of Crime Under Trump,” focuses on hate crimes in the U.S. 40 who have made outstanding contributions in the fields using twitter data. This work has been widely cited in of macroeconomics and finance. Moll also won, together the press including The New York Times, The Guardian, with Greg Kaplan and Gianluca Violante, the award for The Economist and Financial Times. Another strand of economics in central banking for the paper “Monetary Policy Müller’s recent work looks at the political economy of according to Hank.” The work adds to the realism of core finance. The paper “Electoral Cycles in Macroprudential economic models by allowing for differences in households’ Regulation” finds a robust and sizable electoral cycle in the liquid and illiquid assets. use of macroprudential tools around 212 elections in 58 countries over the 2000–2014 period. In the paper “Busy Roland Bénabou was elected to the Institute de France, Bankruptcy Courts and the Cost of Credit,” Müller finds that Académie des Sciences Morales et Politiques. the efficiency of legal enforcement is an important factor for 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 platform “Luohan Academy” clashes with Trump — The Daily finance: Debt-burdened Japan needs — PRNewswire Princetonian fiscal reform to stave-off “collapse” zzDilip José Abreu: an elegant and zzThe Free Trade Paradox — Foreign — Nikkei Asian Review creative economist — livemint Affairs
zzGhosts of history: Lessons for zzAdvice and Dissent, by Alan Blinder Atif Mian US-China trade war — livemint — Financial Times zzHow low interest rates can freeze the economy — The Wall Street Journal zzPreventing the next housing crisis zzWhy politicians and economists often — DSnews don’t get along — The Washington zzWhat’s got U.S. inflation so Post depressed? Just asking for the Fed zzBitcoin has taught us many lessons — Bloomberg on financial bubbles — The National zzEx-Fed vice chair Blinder to Trump: Hiking rates gradually from historic zzLow rates can harm productivity — zzEurobonds of mistrust — Financial lows won’t choke economic growth Central Banking Times — CNBC zzWeak economic growth? Blame the zzEuropean union and divisions — La zzAlan Blinder on how bad economics Polar Vortex — Barron’s Vie des idées so often makes for good politics — zzNegative rates would have speed up zzPulling rabbits out of hats: How a American Enterprise Institute economic recovery, Fed Paper Says decade of crisis changed economics zzIs the Phillips Curve Dead? And — The Wall Street Journal — Jacobin other questions for the Fed — The zzFixing Pakistan’s financial woes Wall Street Journal Harold James — Dawn z zThe ghosts of Versailles — Project Will Dobbie zzThe real engine of the business cycle Syndicate — Project Syndicate zzBlack and white bail judges show zzItaly’s writing on the wall — Project bias against black defendants — zzAn alternative view of boom and bust Syndicatee Journalist’s Resource cycles — Barron’s zzThe ghost of Brexit past — Project zzMost Americans can’t catch the same zzCredit expansion is the real cause of Syndicate kind of cash bail breaks as Harvey booms and busts — MarketWatch zzWhat Lehman Brother’s failure Weinstein — Thinkprogress zzFinancial panic and credit means today — Project Syndicate disruptions in the 2007-09 crisis Henrik Kleven zzThe beginning of the end of Britain’s — Brookings zzHow Econ went from Philosophy to Brexit fantasy — Foreign Policy Science — Bloomberg Opinion
8 FACULTY: RESEARCH, PUBLICATIONS AND NEWS
Alan Krueger Ashoka Mody zzWhat economists still don’t get about zzA debt crisis is coming. But zzThank goodness British governments the 2008 crisis — Bloomberg Opinion don’t blame entitlements. — The were too cowardly to take the UK zzIt’s hard to short crypto — and that’s Washington Post into the euro — Independent propping up prices, study finds zzThe Freedom to Leave — Center for zzLagging: Ireland below European — coindesk American Progress average when it comes to research and development spending Motohiro Yogo zzCorporate America is Suppressing — Independent zzWhy annuities may be safer than Wages for Many Workers — The you think — The Wall Street Journal New York Times zzAngela Merkel’s Tragedy — Project (blog) Syndicate zzFor women who attend elite colleges, pay and marriage have ups and Owen Zidar Benjamin Moll downs — The Washington Post zz“Working rich” prevail among zzEconomics in central banking: Greg today’s top earners — phys.org Adrien Matray Kaplan, Benjamin Moll and Gianluca Violante — Central Banking zzYes, you can outmuscle Chinese VIDEO PRESENTATIONS imports through Innovation and Leonard Wantchekon zzNobel Symposium — Atif Mian R&D — Forbes on “The Credit Driven Household zzIt ended in 1767, yet this experiment Demand Channel” Nolan McCarty is still linked to higher incomes and education levels — The Washington zzNobel Symposium — Markus zzHow the shutdown might end, Post (wonkblog) Brunnermeier on ”Leverage and according to game theory — PBS Cycles” NewsHour Wei Xiong zzNobel Symposium — Nobu zzMidterms 2018: A Divided Congress zzAlibaba Initiates the Open Research Kiyotaki on “Inside Money and — Yahoo Finance Platform “Luohan Academy” 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 Baruch College, City University of New Columbia Business School. (i.e., central bank discount rates, York (CUNY). He earned a Ph.D. in interbank markets, liquidity 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 Liu is a Postdoctoral 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 regulators and its implications for the development. He has done work that SWAAN, Lecturer in 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 and Asian capital markets, and acts as a economies. His other work shows how 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 the Judge Business School at the Limodio is a Visiting Fellow productivity growth; how financial 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, 10 RESEARCHERS: VISITORS, FELLOWS AND POSTDOCTORAL ASSOCIATES
KARSTEN MÜLLER, mechanisms to create a richer and more CARL CHRISTIAN Postdoctoral Research equal society. He is Founder and 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 2008 are subject to powerful electoral in macroeconomics, finance and cycles. He has also studied the effects of PRE-DOCTORAL growth. inefficient bankruptcy courts and RESEARCHERS banking deregulation on credit JULIO ROLL is a Senior contracts in the U.S. His second stream NICOLAS ANDREOULIS Research Specialist at the of research—focusing on social media, is a Senior Research Julis-Rabinowitz Center for populism and hate crime—has been Specialist at the Julis- Public Policy & Finance. Prior to featured widely in international news Rabinowitz Center for Public Policy & joining the center, he received a outlets. Müller earned his Ph.D. in Finance. He holds an M.Sc. in master’s in economics at the University business and management from the economics from University College of Chicago. He also holds a bachelor’s University of Warwick. London. He has been especially degree in economics from the interested in econometrics and University of Lyon II, a bachelor’s in E. GLEN WEYL, Visiting macroeconomics, with a particular Mechanical Engineering from the Research Scholar. Glen focus on the impact evaluation of Polytechnic School of the University of Weyl’s work draws on ideas macroeconomics policies. Before São Paulo, and a master’s in from political economy to develop social coming to Princeton, he worked as a Mechanical Engineering from the École technology for widely shared prosperity research and teaching assistant at the Centrale de Lyon. He also worked at and social cooperation. His recent book London School of Economics and the Goldman Sachs for one year in São with Eric A. Posner, Radical Markets: Institute of Fiscal Studies. 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
11 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.
n initiative of the Julis-Rabinowitz A 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 Photo: Princeton University Office of Communications research assistants
12 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: Hungarian individual level credit bureau Evidence from a Foreign Currency Debt Crisis data, firm level credit bureau data, employer- employee data
Julia Fonseca Interest Rates, Credit Access, and Repayment: NY Federal Reserve Consumer Credit Panel Evidence from Peer-to-Peer Lending
Julia Fonseca Access to Credit and Financial Health: Evaluating the NY Federal Reserve Consumer Credit Panel Impact of Debt Collection
Yann Koby Low in Japan Corporate financial data on Japan’s banks
Effects of Direct Investment Stimulus in a Financial Microlevel firm data Christian Wolf Recession
Yann Koby & Monetary Policy Shocks and the Banking System Household and bank microdata for the US Christian Wolf
AFFILIATED FACULTY, RESEARCHERS AND STUDENTS
POSTDOCTORAL FACULTY 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
13 RESEARCH INITIATIVES: WORKSHOPS
ECONOMIC HISTORY WORKSHOP FINANCIAL ECONOMICS OF INSURANCE WORKSHOP A new initiative of the Julis-Rabinowitz Center, the 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 the workshop. The workshop will be held again next year. AFFILIATED FACULTY Funding is provided by the National Science Foundation and Jeremy Adelman, Henry Charles Lea Professor of the Bendheim Center for Finance. History Leah Boustan, Professor of Economics Harold James, Claude and Lore Kelly Professor AFFILIATED FACULTY in European Studies; Professor of History and International Affairs Motohiro Yogo, Professor of Economics, Princeton Michael Bordo, Professor of Economics and Director University of the Center for Monetary and Financial History at Ralph S. J. Koijen, AQR Capital Management Rutgers University (external) Professor of Finance and Fama Faculty Fellow, University of Chicago, Booth School of Business AFFILIATED STUDENTS
Lianne Hewitt, Robert Yee, Coordinator Coordinator Zehra Ahmed Lukas Althoff Friedrich Asschenfeldt Adhitya Dhanapal Jack Guenther Peter Koczanski Robert Konkel Pablo Pryluka Jonathan Raspe Neel Thakkar Peng Wang
14 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.
his year, the Center’s Student Associates program drew and the FCC Commissioner), Central Bankers (the President T 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, attended the Santa Fe Institute’s Complex Systems Summer With the Center’s support, associates invite speakers, hold School to learn the fundamentals and practice of complex workshops, and initiate research projects related to financial systems scholarship. markets, macrofinance, macroeconomics, and public policy.
The podcast Policy Punchline founded by undergraduate Over the past year, the associates invited seven speakers at associates with Center support aims to promote policy-related four events, organized a conference on Global Governance discussions with scholars, policy makers, business executives U.S.-China, developed a podcast show, held a mentoring and entrepreneurs across all fields. The first episodes feature event, organized three lunch time informal discussions and interviews with Center-invited speakers including Christopher pursued independent research and summer internships in Marks *96, Bill Janeway ’65, Matthias Thiemann, Glen Weyl the public and non-profit sectors. The Associates brought to ’07 and Ashoka Mody. campus prominent government officials (the SEC Chairman
Student associates, faculty, researchers and staff at the Center’s end-of-year lunch. 15 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 Eric Guerci ‘21 Maharan Murshed ‘21 Charles H. Thompson ’21 (Vice-Chair) (Events Director) Stephanie Hu ‘21 Mouhamed Ndiaye ‘22 Roxana Biglari ‘20 Tammy Tseng ‘19 Rohan Joshi ‘21 Scott R. Newman ‘21 William Chamberlain ‘21 Christopher Walton ‘21 Abhiram Karuppur ’19 Max W. Parsons ‘20 Adam Chang ‘20 (Chair) Cathy Wu ‘21 Luca T. Rade ‘19 Hamza Chaudhry ‘19 Ethan Katz ‘21 Jason Xu ‘20 Andre Radensky ‘21 Audrey Cheng ‘20 Blaykyi Kenyah ‘19 Cara Yi ‘19 Nicholas Ritter ‘20 Will Crawford ‘20 Ian Kim ‘19 Alis Yoo, ‘19 Kiara V. Rodriguez Gallego Allen Dai ‘22 Julie E. Kim ‘21 ‘19 Kevin Yu ’20 (Director of Special Leland Domaratzky ‘22 Sean Kim, ‘21 Eitan Sapiro-Gheiler ‘19 Projects) Mohammed K. Elzubeir ‘22 Tom W. Kingori ‘19 Samantha Shapiro ‘21 Kyle J. Zelenitz ‘21 Marina T. Finley ‘19 Jonathan Lam ‘20 Rebecca Sobel ‘19 Eric Zhao ‘20 (Undergrad Mentor) Jean (Yoon Jee) Lee ‘19 Caleb South ‘20 Julia M. Zielczynska, ’19 Miaokuan (Tiger) Gao ’21 Brandon S. Lee, ‘19 Bradley Spicher ‘20 (Vice-Chair) (Outreach Director) Sophia Lewandrowski ‘22 Gabriel D. Swagel ‘19
2018–2019 GRADUATE ASSOCIATES
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
16 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 Vishan Nigam*** (Economics) Diego Vives*+ (Economics) Sciences) 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 Howard Crosby Warren Senior Prize in Psychology: whose senior thesis is judged to be the most outstanding Senior concentrators in psychology selected by the work in social psychology, broadly construed. department as the most worthy recipients on the basis of Winner: SHRIYA SEKHASARIA (Advisor: Emily Pronin) 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 John Glover Wilson Memorial Award: The best thesis on departmental coursework, and creativity in the junior international economics or politics. papers and senior thesis. 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
17 TEACHING & LEARNING: STUDENT ASSOCIATES
CLASS OF 2018 UNDERGRADUATE SAM MAEGLIN, Advisor: John Londregan. The Political 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. independent thinkers. The students work one-on-one with a faculty member who guides them through the process. SHRIYA SEKHASARIA, Advisor: Emily Pronin. Let’s Undergraduate Associates of the class of 2018 researched a Start with Forever: Counterintuitive Effects of Writing and wide variety of topics in their theses ranging from the effects Reading Own and Others’ Memories. of quantitative easing, the consequences of local immigration enforcement and police behavior, the impact of unionization, BEN SENDER, Advisor: Harold T. Shapiro. Predicting the to the effects of creating memory jars. The topics reflect the Accuracy of Earnings Forecasts Using Machine Learning. varied interests of this exceptional group of young thinkers who are soon to enter careers in finance or public policy, BRANDON JOEL TAN, Advisor: Leah Boustan. The launch their own startup or continue their studies in law or Impact of Unionization on Industry Adoption of Labor pursue Ph.D.s in economics. Saving Technologies: A Machine Learning Approach.
IDIR AITSAHALIA, Advisor: Jakub Kastl. Low Fares Done BENJAMIN J. TSO, Advisor: Nobuhiro Kiyotaki. Wright: Airline Responses to Low-Cost Entry Following Investigating Abe’s Third Arrow: The Effect of Japanese Regulatory Changes. Corporate Governance on Firm-Level TFP and Company Performance. SARA DIRESSOVA, Advisor: Chris Sims. Vector Autoregressive Modeling of Interest Rate Shocks on Bank GAVIN ZHANG, Advisor: Iqbal Zaidi. Bayesian Balance Sheets: A Comparative Study. Estimation of a Medium-Scale DSGE Model of China.
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.
18 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.
ow in its 20th year, the Undergraduate Certificate in N Finance offers students majoring in any department PUBLIC POLICY AND FINANCE the opportunity to demonstrate their proficiency in the TRACK AT A-GLANCE discipline. Eighty students earned certificates in the Class ECO361: Financial Accounting of 2018. Currently there are 65 juniors and 95 seniors 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: public finance, responses to financial crises, central banking, Understanding Macro & Financial Policy and regulation. REQUIRED CORE COURSES FOR ALL The certificate has four requirements: CERTIFICATE PROGRAM PARTICIPANTS ECO362: Financial Investments zzThere are prerequisites in mathematics, economics, and ECO363: Corporate Finance and Financial probability and statistics, as necessary for the study of 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.
19 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.
ow in its ninth year, the intensive three-day “Short- 2018 PROGRAM & SPEAKERS N Course: Financial Markets for Public Policy Professionals” provides a framework for future public policy UNDERSTANDING THE LANGUAGE OF FINANCE (SEPTEMBER 5) professionals to understand the operations of financial institutions, the economic purposes they serve, the markets Accounting for Policy Makers: Donal Byard, Zicklin in which they deal and the regulatory environment in which School of Business, Baruch College they operate. FRAMEWORK FOR UNDERSTANDING FINANCIAL Since its inception in the fall of 2010, the course has 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 Mortgages & Derivatives: Michael Johannes, Columbia and financial industry executives. The core curriculum is Business School complemented by a series of lectures and panel discussions that have evolved over time and include topics such as 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 Private Equity: David Rubenstein, Co-founder and regulation. One of the panelists, Kathryn Judge, Professor Managing Director of The Carlyle Group of Law at Columbia Law School, addressed the issue of 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 Impact Investment: Philip D. Bennett, First Vice President by those who do not specialize in finance. Expanding the (ret.), EBRD pool of policy folks prepared to engage in these debates is a critical step toward improving outcomes” said Judge. Global Economic and Financial Fault Lines: Ashoka Mody, Princeton University
2018 SHORT COURSE AT-A-GLANCE Cryptocurrencies & Financial Market Implications: Amber Baldet, Co-founder & CEO, Clovyr Audience: 48 MPA & MPP students (full capacity) Financial Regulation Panel: Aaron Klein, Brookings Topics: Accounting principles, financial markets, Institution, Duncan Jepson, Liberty Global regulations and policy Kathryn Judge, Columbia Law School Financial support: Noah Gottdiener ’78 More info: jrc.princeton.edu/teaching/short-course- financial-markets-public-policy-professionals
20 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 time trends. I came away feeling as though I can now read the WSJ to others: yy Absolutely ...... 53% and Financial Times! I especially appreciated the thorough review of yy Yes, with enthusiasm . . 18% yy Yes ...... 29% the bond market, the housing crisis, and the role of the U.S. banking Likely to take similar courses in system in the global economy. I also appreciated the chance to be future? yy Likely or very likely . . . 79% exposed to new ideas and thought leaders during the final day of yy Unlikely ...... 15% sessions.” yy Very unlikely ...... 6% Quantity/quality of subject matter learned: yy An amazing amount . . 35% “Brilliant, added a lot of new knowledge, especially the basic yy A lot ...... 48% workings of financial markets and some inherent flaws.” yy Moderate amount . . . 17%
21 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 used to produce a firm’s financial statements (i.e., the ECO 494: CHINESE FINANCIAL AND MONETARY balance sheet, income statement, and statement of cash 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 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 NEW COURSE IN FALL 2018 course examines the determinants of corporate financing ECO 406: RADICAL MARKETS decisions and the role of financial institutions in the wider context of the working of financial markets. Topics include (GLEN WEYL) capital budgeting, capital structure, risk management, and Wealthy countries in the 21st century face a triple corporate governance. Additionally, the course introduces social crisis of rising inequality, economic stagnation various methodologies for valuing individual projects, as and failing political legitimacy; many observers well as entire companies. blame free markets for these seemingly intractable problems. This course will explore the counter- WWS 466 / HIS 467: FINANCIAL HISTORY, intuitive 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 22 TEACHING & LEARNING: SELECTED COURSES
ECO 507: TOPICS IN EMPIRICAL WWS 582F: TOPICS IN ECONOMICS – HOUSE OF MACROECONOMICS, Atif Mian. This course is geared DEBT: UNDERSTANDING MACRO & FINANCIAL towards (i) understanding how finance and the macro 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/ wealth responses, tax compliance, optimal taxation and WWS 593B: TOPICS IN POLICY ANALYSIS - redistribution. In terms of methodologies, empirical and 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 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. WWS 525: PUBLIC ECONOMICS AND PUBLIC ECO 553: INTERNATIONAL MONETARY THEORY POLICY, Henrik J. Kleven. This course focuses on the role AND POLICY I, Mark A. Aguiar. This sequence (with 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. 23 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.
he Center’s program of events is designed to complement again at the invitation of the Center’s Undergraduate Tclassroom learning, foster innovative research, and Associates. Clayton discussed the SEC’s evolving views on engage with policymakers and industry professionals. whether digital coins should be classified as securities and the need for government oversight in the context of rapid At the invitation of the Center’s Undergraduate Associates, technological innovation. LORETTA J. MESTER *85, PRESIDENT OF THE CLEVELAND FEDERAL RESERVE BANK, gave a On October 16, 2018 four experts, DAVID A. BALDWIN speech on March 27, 2018 at Princeton University. In *65, THAD MCBRIDE ‘95, MEREDITH H. TERRELL addition to discussing the economic outlook, Mester assessed ‘91, BRIAN O’TOOLE ‘03, explored the effectiveness of labor market conditions, the expected path of inflation and financial sanctions as diplomatic tools and also discussed the monetary policy agenda. the “secondary sanctions” that restrict U.S. firms’ interactions with any non-U.S. entities that have conducted SECURITIES AND EXCHANGE COMMISSION business with a sanctioned state. CHAIRMAN JAY CLAYTON spoke on April 5, 2018,
Students packed the room to hear SEC Chairman Jay Clayton speak about cryptocurrency regulation. 24 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:
Loretta Mester zzE. GLEN WEYL, Visiting Research Scholar at the Julis- Rabinowitz Center for Public Policy & Finance and a his new book Radical Markets: Uprooting Capitalism and Principal Researcher at Microsoft Research, talked about 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. 25 CENTER EVENTS: CALENDAR
DATE EVENT AUDIENCE SPRING 2018 Feb. 15 The Future of Manufacturing-Led Development, Otaviano Princeton University students Canuto, Executive Director, World Bank Group (lunch talk) Feb. 15 The Rule of Law at Home and Abroad: Not Just for Lawyers and Princeton University students Judges, James Silkenat (co-sponsored with Law and Public Affairs) Feb. 20 Macrofinance Lab - Working Dinner Macrofinance Lab members, faculty, staff and students Feb. The Future of Globalization: Trade, Finance & Politics (7th Annual Ticketed event. Open to the 22-23 Conference) public. Mar. 7 An Accidental Brexit: Destabilization of Europe and Weakening Princeton University faculty, Multilateralism, Paul J.J. Welfens (organized by the Program in staff, and students Contemporary European Politics and Society) Mar. The Economic Outlook, Monetary Policy, and Some Future Policy Open to the public. 26 Considerations, Loretta Mester, President of the Cleveland Federal Reserve Bank Apr. 2 Latin America: Recent Developments and Economic Outlook, Princeton University students Alejandro Werner, Director-Western Hemisphere, IMF Apr. 5 Cryptocurrency and Initial Coin Offerings, Jay Clayton, Securities Princeton University students and Exchange Commission Chairman 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
26 CENTER EVENTS: CALENDAR
DATE EVENT AUDIENCE FALL 2018 Sep. Financial Markets for Policy Professionals (Ninth Edition) Registration only for MPPs and 5-8 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 Princeton University faculty, Shahryar Reza, PlanetN Group staff, and students Oct. 16 Sanctions Finance (panel discussion), David A. Baldwin *65, Thad Princeton University faculty, McBride ‘95, Meredith H. Terrell ‘91, Brian O’Toole ‘03 staff, and students Nov. 8 Successful Risk Management in Development Finance, Princeton University faculty, Christopher Marks, Managing Director and Head of Emerging staff, and students Markets, MUFG/Mitsubishi Financial Group Nov. 29 Doing Capitalism in the Innovation Economy, Bill Janeway, Open to the public Warburg Pincus Dec. 3 The Many Ways of Doing Economic History, Marc Flandreau, Princeton University faculty, University of Pennsylvania 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 Princeton University faculty, Rosenworcel (moderated by Prof. Nick Feamster) 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 Feb. Radical Mechanisms 10 Years After the Financial Crisis, JRCPPF Ticketed event. Open to the 21-22 8th Annual Conference, Cosponsored by Microsoft Research public. Feb. 28 Crashed: How a Decade of Financial Crises Changed the World Princeton University faculty, (book talk), Adam Tooze, Columbia University (Economic History staff, and students Workshop) Mar. 7 Governor Lael Brainard, US Federal Reserve Board Open to the public Mar. Fixing the Euro Needs to Go Beyond Economics, Anne-Laure Princeton University faculty, 13 Delatte, CEPII Sciences Po staff, and students Mar. Finance Industry Panel: What’s Changed Since 2008 and What’s Open to the public 27 Ahead?, Jim Keenan (BlackRock), Scott Graves (Ares Capital) Mar. Trade, Law and the Global Order of 1919, Patricia Clavin, Oxford Princeton University faculty, 28 University (Economic History Workshop) staff, and students Apr. 4 Dan M. Berkovitz, Commissioner of the Commodity Futures Princeton University faculty, Trading Commission staff, and students Apr. 4 The Political Economy of Secrecy, Katherine Epstein, Rutgers Princeton University faculty, University (Economic History Workshop) staff, and students Apr. Princeton Summit on Africa - Panel on Trade and Economic Ticketed event. Open to the 5-6 Policies public. Apr. 9 The Indian Economy, Arvind Panagariya, Columbia University Princeton University faculty, (moderated by Prof. Atul Kohli) staff, and students Apr. Insights on Health Policy: A Conference in Tribute to Uwe 11-12 Reinhardt Apr. 18 Responding to the Challenge of State Fragility, Sir Tim Besley, Princeton University faculty, London School of Economics and Politics 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 Princeton University faculty, Argentina staff, and students May 8 End of year lunch Staff, faculty, student associates 28 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 Violeta Rosenthal Director Center Academic Specialist [email protected] [email protected] 609-258-6718 609-258-9869
Pallavi Nuka Nancy Turco Assistant Director Program Coordinator [email protected] [email protected] 609-258-5258 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: [email protected] Web: jrc.princeton.edu