Annual Conference

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Trade, Growth and Development

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May 2022

Capital Quality, Productivity, and Financial Constraints: Evidence from India

Poorya KABIR, Seyed MANSOURI
This paper provides novel evidence that reduced financial constraints increase physical capital quality and, consequently, productivity. We use a project-level investment dataset from India, CapEx, with data on project cost, capacity added to the firm, and investment’s product category. We measure...
Keywords: capital quality, financial constraints, productivity, financial development
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Senior Fellows/Fellows

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Senior Fellows/Fellows, Pandemic

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Apr 2022

Pandemic-Era Uncertainty

Steven J. DAVIS, Nicholas A. BLOOM, David E. ALTIG, Jose Maria BARRERO, Brent MEYER, Emil MIHAYLOV
We examine several measures of uncertainty to make five points. First, equity market traders and executives at nonfinancial firms have shared similar assessments about one-year-ahead uncertainty since the pandemic struck. Both the one-year VIX and our survey-based measure of firm-level uncertainty a...
Keywords: Business Expectations, Uncertainty, Subjective Forecast Distributions, Capital Investments
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Webinar Series

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Innovation, Productivity and Challenges in the Digital Era: Asia and Beyond

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Mar 2022

Money Creation in Decentralized Finance: A Dynamic Model of Stablecoin and Crypto Shadow Banking

Ye LI, Simon MAYER
Stablecoins are at the center of debate surrounding decentralized finance. We develop a dynamic model to analyze the instability mechanism of stablecoins, the complex incentives of stablecoin issuers, and regulatory proposals. The model rationalizes a variety of stablecoin management strategies comm...
Keywords: Stablecoin, instability, regulation, decentralized finance, cash holdings, q-theory
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Webinar Series

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Capital Market Development: China and Asia

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Mar 2022

What Gets Measured Gets Managed: Investment and the Cost of Capital

Zhiguo HE, Baolian WANG, Guanmin LIAO
We study the impact of government-led incentive systems by examining a staggered reform in the Chinese state-owned enterprise (SOE) performance evaluation policy. To improve capital allocative efficiency, in 2010, regulators switched from using return on equity (ROE) to economic value added (EVA) wh...
Keywords: CEO compensation, Capital budgeting, Cost of Capital, Corporate governance, Economic reform, Transition economy
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Senior Fellows/Fellows

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Senior Fellows/Fellows, Pandemic

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May 2020

Still the World’s Safe Haven? Redesigning the U.S. Treasury Market After the COVID-19 Crisis

Darrell DUFFIE
I review the functionality of the secondary market for U.S. Treasuries in March 2020, when the Covid-19 crisis triggered investor flows that overwhelmed intermediaries. Although the Fed was able to largely restore market liquidity through its unprecedented rate of Treasury purchases and other action...
Keywords: COVID-19, Pandemic, US Treasury Market
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