Spring 2023

SEM217: Stephen Kealhofer and Simone Cenci, Blackstone: A causal approach to test empirical capital structure regularities

Tuesday, January 31st @ 11:00-12:30 PM (RECORDING)

Capital structure theories are often formulated as causal narratives to explain which factors drive financing choices. These narratives are usually examined by estimating cross-sectional relations between leverage and its determinants. However, the limitations of causal inference from observational data are often overlooked. To address this issue, we use structural causal modeling to identify how classic determinants of leverage are causally linked to capital structure and...

SEM217: William Zame, UCLA: Index Funds, Asset Prices and the Welfare of Investors

Tuesday, February 14th @ 11:00-12:30 PM (RECORDING)

We present an equilibrium model in which heterogeneous investors choose among bonds, stocks, and an Index Fund holding the market portfolio. We show that, under standard assumptions, an equilibrium exists. We then derive predictions for equilibrium asset prices, investor behavior, and investor welfare. The presence of the index fund (or a decrease in the fee charged by the index fund) tends to increase stock market participation and thus increase asset prices and decrease...

SEM217: Hubeyb Gurdogan, CDAR: A propagation model to quantify business interruption losses in supply chain networks

Tuesday, January 24th @ 11:00-12:30 PM (ZOOM)

Today's supply chains are global, highly interconnected, and increasingly digital. These three attributes of supply chains compound the effects of disruptions in production. For a company comprising many factories, a disruption in production at one site can impact production at other locations as well as production at other companies linked through the supply chain. Quantifying the financial impact of business interruption, such as...

SEM217: David Romer and Christy Romer, UC Berkeley: Inflation and monetary policy

Tuesday, February 7th @ 11:00-12:30 PM

Drawing on work in progress, we examine the sources of the recent inflation, the Federal Reserve’s response, and the likely implications. We present evidence that the sharp rise in inflation reflects a mix of supply factors (particularly in the early stages) and an overheated economy (particularly later). The overheated economy, in turn, appears to have been caused in part by highly expansionary fiscal policy and the Federal Reserve’s slowness in tightening policy. We show that the sharp tightening of monetary policy since mid-2022 is similar...

SEM217: Cancelled

Tuesday, April 4th @ 11:00-12:30 PM