Myopic investors focus on short-run price changes rather than long-term fundamental value, resulting in an overweighting of public information and a slow diffusion of fundamental news. Such processing of information can produce price drifts similar to those seen in behavioral models of momentum. We explore the impact of myopia over an international sample, finding that momentum is stronger in more myopic countries, and this relationship is magnified where the proportion of funds under delegated management is high. We therefore argue that investor myopia, which arises due to agency issues in delegated funds management, is an important determinant of momentum.

Abstract During the past few years there has been a considerable amount of writing and discussion in the accounting and engineering field on the subject of the valuation of assets, and especially has the valuation of fixed plant assets come in for much analysis and study. The increasing interest in this problem has been doubtless due, in no small measure, to the attention directed toward it by the income tax regulations and by the marked upward swing of prices from the prewar to the postwar level-a fact which has been of considerable importance and annoyance in numerous public utility valuations incident to the regulation of their rates. However, it may be said without fear of serious contradiction that, as a practical matter, the accountant in the past has not given sufficient consideration to this important problem. This article sets forth the various methods by which the facts of such a policy may be expressed in the accounts and operating statements, assuming that the policy has been decided upon.

Abstract We develop a model that integrates modern theories of labor market flows with nominal wage rigidities to study the consequences of inflation on the labor market. Nominal wage stickiness incentivizes workers to engage in job-to-job transitions after an unexpected increase in the price level. Such dynamics lead to a rise in aggregate vacancies associating a seemingly tight labor market with lower real wages—two facts observed during the recent inflation period. The calibrated model jointly matches aggregate and cross-sectional trends in worker flows and wages during the 2021–2024 period. Using historical data, we show that prior periods of high inflation were also associated with increasing vacancies and upward shifts in the Beveridge curve. Our results suggest that policy makers and academics should be cautious about viewing the rise in the vacancy-to-unemployment rate as a sign of a tight labor market during inflationary periods without holistically looking at other labor market indicators.

This paper analyzes differences in the likelihood that black and white families become homeowners. By following a sample of black and white renters over time, we are able to separately study racial differences in the likelihood of applying for a mortgage and in the likelihood that a mortgage application is accepted. Although its effect on the race gap in housing transitions is small, we find strong evidence that black applicants are almost twice as likely as comparable white households to be rejected, even when credit history proxies and measures of household wealth are accounted for. We show that the housing transition gap exists primarily because blacks are less likely to apply for mortgages in the first place. The analysis suggests that differences in income, family structure, and in the ability and willingness of parents to provide down-payment assistance are the primary reasons for this applications gap. We speculate that the portion of the gap that remains unexplained after controlling for income, demographics, and wealth may be the result of blacks anticipating a greater chance of rejection when they apply for mortgages.

In this paper, we find that the age-adjusted elasticity of child wealth with respect to parental wealth is 0.37 before the transfer of bequests. Lifetime income and asset ownership jointly explain nearly two-thirds of the wealth elasticity. Education, past parental transfers, and expected future bequests account for little of the remaining elasticity. Survey measures of risk correlate strongly between parents and children. However, they explain little of the intergenerational similarity in the propensity to own different assets, suggesting that children's savings propensities are determined by mimicking their parents' behavior, or the inheritance of preferences not related to risk tolerance. Our results imply that while parents do pass on human capital and saving propensities to their children, the level of intergenerational fluidity is much greater than that suggested by recent accounts in the popular press.

In this paper, we use five decades of time-use surveys to document trends in the allocation of time within the United States. We find that a dramatic increase in leisure time lies behind the relatively stable number of market hours worked between 1965 and 2003. Specifically, using a variety of definitions for leisure, we show that leisure for men increased by roughly six to nine hours per week (driven by a decline in market work hours) and for women by roughly four to eight hours per week (driven by a decline in home production work hours). Lastly, we document a growing inequality in leisure that is the mirror image of the growing inequality of wages and expenditures, making welfare calculation based solely on the latter series incomplete.

A household’s vehicle purchases are among its largest expenditure outlays. Moreover, unlike housing purchases, which a typical household may make once or twice over a lifetime, a household may well buy several cars over the same interval. The magnitude and relative frequency of vehicle purchases suggest that differential treatment by race in the vehicle market may have important implications for differences in wealth and financial wellbeing by race. Yet, whereas a robust literature in economics has studied virtually all aspects of racial treatment in the housing market, corresponding work about vehicles has been relatively sparse, with most work focusing on racial differences in prices paid (Pinelopi Goldberg (1996) and Fiona Scott-Morton, Florian Zettelmeyer, and Jorge Silva-Risso (2003)). Very little previous attention has been paid to whether there is differential racial treatment in another important outcome in the vehicle market: the interest rates that households pay on the loans used to purchase vehicles.1 Calculations using data from the Survey of Consumer Finances indicate that loans for vehicle purchases are primarily obtained from one of two sources. Roughly two-thirds of vehicle loans originate from the traditional banking sector: commercial banks, savings institutions, or credit unions. Vehicle manufacturers finance the remaining one-third of auto

We explore the impact of rising incomes at the top of the distribution on spatial sorting patterns within large U.S. cities. We develop and quantify a spatial model of a city with heterogeneous agents and non-homothetic preferences for neighbourhoods with endogenous amenity quality. As the rich get richer, demand increases for the high-quality amenities available in downtown neighbourhoods. Rising demand drives up house prices and spurs the development of higher quality neighbourhoods downtown. This gentrification of downtowns makes poor incumbents worse off, as they are either displaced to the suburbs or pay higher rents for amenities that they do not value as much. We quantify the corresponding impact on well-being inequality. Through the lens of the quantified model, the change in the income distribution between 1990 and 2014 led to neighbourhood change and spatial resorting within urban areas that increased the welfare of richer households relative to that of poorer households, above and beyond rising nominal income inequality.