Traditionally, fund managers cast votes on behalf of fund investors. Recently, there is a shift toward “pass-through voting,” with funds offering investors a choice: delegate votes to the fund or vote themselves. We develop a framework to study the implications of voting choice. While it helps reflect heterogeneous investor preferences, it also shapes the informational content of the vote, and these forces can conflict. When interests are aligned, voting choice improves information aggregation and investor welfare. With preference heterogeneity or costly information, however, it can make investors worse off by weakening informed.

Why do individuals pay debt interest when they could use their savings to pay down the debt? We explore why individuals “cohold” debt and savings using detailed and highly disaggregated daily-level data on household finances. We find that coholding mostly occurs in short spells within the month and the level of coholding is typically modest. Periods of coholding are not associated with shocks at the individual level. We show that mental accounting has a role to play in explaining coholding, in particular how individuals allocate different categories of expenditure to accounts in credit and debit.

We propose a statistical model of heterogeneous beliefs wherein investors are represented as different machine learning model specifications. Investors form return forecasts from their individual models using common data inputs. We measure disagreement as forecast dispersion across investor-models (MFD). Our measure aligns with analyst forecast disagreement but more powerfully predicts returns. We document a large and robust association between belief disagreement and future returns. A decile spread portfolio that sells stocks with high disagreement and buys stocks with low disagreement earns a value-weighted return of 13% per year. Further analyses suggest MFD-alpha is mispricing induced by short-sale costs and limits-to-arbitrage.

We estimate price elasticities of housing supply for U.S. cities by examining the impact of foreign purchases on housing prices and quantities. After other countries introduced foreign-buyer taxes beginning in 2011, both house prices and quantities increased more in locations with high foreign-born populations. An increase in global capital inflows, instrumented with tax policy changes scaled by immigrant exposure, increased prices and quantities over 2011–2018. We combine these estimates to construct new local supply elasticities, which average 0.26 and range from 0.06 to 0.9. Compared to prior estimates, our elasticities are more inelastic and change cities’ relative rankings.

We study the interaction between firms, which can invest in green technologies, and a government, which can impose emission caps but has limited commitment power. Investment in green technologies generates innovation spillovers, reducing the cost of further investments. Spillovers generate intertemporal strategic complementarities between firms and government, and equilibrium multiplicity. In a “green equilibrium”, firms, anticipating caps, invest in green technologies, which reduces the cost of further investment, making the government willing to cap emissions. In a “brown equilibrium”, firms, anticipating no caps, don’t invest, so green technologies remain costly and the government gives up on emission caps.

A key question for studying business dynamism is whether the costs of regulatory compliance fall homogeneously on small and large businesses. Using comprehensive establishment-level occupational microdata and occupation task information, we quantify a firm’s compliance costs as the share of wage bill for performing regulatory compliance tasks (RegIndex). We reveal an inverted-U relationship between firms’ RegIndex and their size: On average, RegIndex for mid-sized firms with around 500 employees is about 47% greater than that of the smallest firms and 18% greater than that of the largest firms. We further develop a shift-share methodology to disentangle the influence of regulatory requirements and enforcement on driving firms’ compliance costs.

We show that banks cross-sell future deposits and loans to existing household depositors. A bank is 20-percentage-points more likely to sell a loan to an existing depositor than to an otherwise comparable household. Existing depositors pay a premium when borrowing, and we find no indication that banks obtain an informational advantage on such borrowers, suggesting that the cross-selling is driven more by demand than by supply complementarities. These demand complementarities are in turn driven more by stickiness rather than by unobserved persistent preferences. Finally, banks internalize future cross-selling potential when setting deposit rates.

Do real assets protect against inflation? Stocks’ core inflation betas are negative, while their energy betas are positive. Currencies, commodities, and real estate mostly hedge against energy inflation, but not core inflation. These hedging properties are reflected in the prices of inflation risks: only core inflation carries a negative risk premium, and its magnitude is consistent within and across asset classes, uniquely among macroeconomic risk factors. Energy inflation has become more procyclical and volatile since the 1990s, which helps explain the time-varying correlation between stock and bond returns. A two-sector New Keynesian asset pricing model accounts for these facts quantitatively.

This paper introduces a key factor influencing households’ decision to invest in the stock market: how people view stockholders. Using surveys we conducted with nearly 8,500 individuals from 11 countries, we document that a large majority hold negative views of stockholders based on identity-relevant characteristics. Linking survey and administrative data, we find that negative perceptions strongly predict households’ stock market participation. We show that negative perceptions causally influence household decision-making and provide evidence supporting identity concerns as the underlying mechanism. Our findings provide new perspectives on the malleability of financial decision-making and a novel explanation for low stock market participation

This paper studies how public information, such as proxy advice, affects shareholder voting and, thus, corporate decision-making. We find that while public information improves the voting decisions of uninformed shareholders, it also induces privately informed shareholders to exit rather than to exercise their voice (vote). As a result, public information impairs information aggregation by voting but improves information aggregation by trading. Overall, public information can undermine corporate decision-making. Furthermore, slightly more precise public information can lead to a discontinuous reduction in firm value. Our results give rise to new empirical predictions and have implications for regulation