Abstract We examine Twitter discussion of sell-side analysts’ stock recommendation revisions. While many investors lack direct access to analyst research, we observe revision-related Twitter discussion associated with approximately 90 percent of the revisions in our sample, usually within three hours of their announcement. Revision-related Twitter discussion is greater for upgrades and for analysts from larger brokerages. Examining within-revision intraday price discovery, we observe increased price discovery during intraday windows with more revision-related tweets, especially for tweets that have more user engagement, are posted by more influential authors, or involve stocks with more intense retail trading volume. We find that revision-related retail trading is more intense and better predicts future returns for revisions with more revision-related Twitter discussion. We observe no such evidence for institutional investors who have direct access to sell-side research. Our results suggest that Twitter is an important channel in facilitating price discovery following analyst revisions, particularly among retail investors.

We study whether floods can affect financial stability through a credit risk channel. Our focus is onthe Netherlands, a country situated partly below sea level, where insurance policies exclude property damages caused by some types of floods. Using geocoded data for close to EUR 650 billion in real estate exposures, we consider possible implications of such floods for bank capital. For a set of 38 adverse scenarios, we estimate that flood-related property damages lead to capital declines that mostly range between 30 and 50 basis points. We highlight how starting-point loan-to-value ratios are one important driver of capital impacts. Our estimates focus on property damages as the main transmission channel and are also subject to a number of assumptions. If climate change continues, more frequent floods or flood-related macrofinancial disruptions may have stronger implications for financial stability than our estimates so far indicate.

Entrepreneurship is thought to be a key driver of economic growth. While there are myriad forms of entrepreneurship, ranging from self-employment to small and medium size enterprises to technology- and innovation-driven startups, recent research provides evidence that the relationship between entrepreneurship and economic growth is driven not by overall quantity of new firm entry, but rather by a small subset of high-growth startups that are primarily categorized as innovation-driven. This paper provides a survey of the growing literature on the economics of such innovation-driven entrepreneurship. We begin by distinguishing between the various forms of entrepreneurship, which are often confounded in both theory and empirical work. We lay out the current state of knowledge, and describe the challenges faced by researchers in the field, particularly around measurement, data and identification. We conclude with an overview of the major open questions and directions for future research in the area.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

In this article, we draw on the writings of Nigerian-born sociologist Peter P. Ekeh and, using extensive and hard-to-reach fieldwork data, we seek to understand how members of the Civic Public—the political and business elite—managed to obscure and obfuscate their corruption via accounting tools and strategies at the expense of the communities they serve, i.e., the Primordial Public. We find that members of the Civic Public engaged in a series of accounting schemes—some simple, others complex—to divert vast sums of much-needed funds away from the intended beneficiaries of a major charitable initiative established to provide aid for the un(der)-employed youth of Ghana. We make important contributions to the study of accounting, corruption, and morality. First, we disaggregate amorality from morality, situating these terms both theoretically and contextually, before discussing how members of the primordial public are systemically and culturally socialized to the elite's amorality. We build on and extend Ekeh's arguments in two ways. First, we discuss the emergence of a third public, which we call the “In-between”. Second, we argue that members of this third public are increasingly at risk of being dragged into morally dubious actions by and on behalf of their elite peers as they are persuaded toward morally dubious actions and behaviours.

This paper develops the concept of a “crypto multiplier,” which measures the equilibrium response of a cryptocurrency’s market capitalization to aggregate inflows and outflows of investors’ funds. The crypto multiplier takes high values when a large share of a cryptocurrency’s coins is held as an investment rather than being used as a means of payment. Blockchain data show that the share of coins held for the purpose of making payments is rather small for major cryptocurrencies suggesting large crypto multipliers. Our results highlight the need for market participants to be vigilant when accepting block holdings of a cryptocurrency as collateral or as compensation for seed funding. The crypto multiplier indicates that the liquidation value of block holdings of cryptocurrencies can be substantially below their prevailing market values.

Abstract What are the channels through which monetary policy affects financial stability? Can (and should) central banks prevent financial crises by deviating from price stability? To what extent may monetary policy itself unintentionally breed financial vulnerabilities? We answer these questions using a New Keynesian model with capital accumulation and endogenous financial crises due to adverse selection and moral hazard in credit markets. Our findings are threefold. First, monetary policy affects the probability of a crisis both in the short run (via aggregate demand) and in the medium run (via capital accumulation). Second, the central bank can reduce the incidence of crises in the medium run by tolerating higher inflation volatility in the short run. Third, prolonged periods of loose monetary policy followed by a sharp tightening can lead to financial crises.

Prior accounting and economics research suggests that tournaments with highly concentrated prizes attract the most talented individuals. However, this research assumes that tournament entrants have granular, reliable information about their relative skill level. Using a laboratory experiment, we replicate this result: when relative skill information is available, prize concentration leads to skill-based selection. However, when relative skill information is unavailable, and tournament choice is public, we find that highly concentrated prizes instead attract more narcissistic individuals. Together, our results suggest that high-level positions with exceptionally large prizes can attract narcissistic applicants when entry decisions are publicly observable and relative skill information is limited. These findings inform both theory and practice by clarifying when tournament prize concentration selects for skill versus personality.

ABSTRACT During the COVID‐19 pandemic, states imposed restrictions intended to slow the spread of the virus. We investigate whether states' reliance on consumption tax revenue, relative to other tax revenue sources, is associated with the duration of COVID‐19 mobility restrictions. We find that states that are more dependent on consumption taxes experienced shorter durations of stay‐at‐home orders, restaurant closures, and bar closures. We conduct a series of analyses to mitigate concerns that state‐level political preferences and biases may be influencing our findings. Our findings suggest that anticipated shortfalls in consumption tax revenue may have shaped public health responses, consistent with tax system structures relating, unintentionally, to crisis management decisions.

The previous literature finds a positive effect of institutional (relative to other investors’) ownership on firms’ innovation output . We study the impact of increases in the concentration of institutional investors’ ownership on firms’ decisions to invest in innovation and their innovation output. By reducing short-term earnings pressure, concentrated institutional investors’ ownership increases managers’ incentives to invest in R&D. However, it decreases firms’ acquisitions of external innovation due to empire-building and dilution concerns. Overall, firms’ future patents and citations decrease. Our results indicate that the previously found positive effect of institutional investors on innovation declines as the ownership of these investors becomes more concentrated. Despite that, we find that blockholder institutional ownership increases firm value. Hence, large institutional investors take measures to preserve the value of their ownership interests, even if they result in reduced innovation.