This paper investigates the role of seasonal affective disorder (SAD) in the seasonal time-variation of stock market returns. SAD is an extensively documented medical condition whereby the shortness of the days in fall and winter leads to depression for many people. Experimental research in psychology and economics indicates that depression, in turn, causes heightened risk aversion. Building on these links between the length of day, depression, and risk aversion, we provide international evidence that stock market returns vary seasonally with the length of the day, a result we call the SAD effect. Using data from numerous stock exchanges and controlling for well-known market seasonals as well as other environmental factors, stock returns are shown to be significantly related to the amount of daylight through the fall and winter. Patterns at different latitudes and in both hemispheres provide compelling evidence of a link between seasonal depression and seasonal variation in stock returns: Higher latitude markets show more pronounced SAD effects and results in the Southern Hemisphere are six months out of phase, as are the seasons. Overall, the economic magnitude of the SAD effect is large.

Losing Sleep at the Market: The Daylight Saving Anomaly: Reply by Mark J. Kamstra, Lisa A. Kramer and Maurice D. Levi. Published in volume 92, issue 4, pages 1257-1263 of American Economic Review, September 2002

Losing Sleep at the Market: The Daylight Saving Anomaly by Mark J. Kamstra, Lisa A. Kramer and Maurice D. Levi. Published in volume 90, issue 4, pages 1005-1011 of American Economic Review, September 2000

Money, Sticky Wages, and the Great Depression by Michael D. Bordo, Christopher J. Erceg and Charles L. Evans. Published in volume 90, issue 5, pages 1447-1463 of American Economic Review, December 2000

We investigate the impact of capital requirements on bank lending across institutional sectors, focusing on their transmission channel and the interaction with monetary policy. By employing confidential loan-level data for the euro area, we find that the reaction of banks to capital surcharges for Other Systemically Important Institutions (O-SII) depends on the level of the required buffer and the institutional sector of the borrowing counterpart. Tighter requirements correspond to stronger lending contractions with targeted banks curtailing their lending mostly towards credit institutions. Loan supply to non-financial corporations is almost unchanged, mainly as a result of the incentives embedded in the ECB's targeted long-term refinancing operations. Our results provide evidence on the interaction between macroprudential and monetary policy, and the positive effects of combining two different sets of incentives to support the resilience of the banking system and credit supply to the real economy.

We use Finnish OMX Helsinki data to examine the relationship between demographic variables, individual investors' broker choices and trade informativeness. We find that men prefer to use Full-Service-Retail over Discount-Retail brokers and that a higher level of income leads to a higher likelihood of using Discount-Retail brokers. Women present more heterogenous broker choice behaviors. However, both genders are more likely to carry out larger trades through Discount-Retail brokers. We show that trades executed via Discount-Retail brokers are more informative than those of Full-Service-Retail brokers and that only Discount-Retail brokers show trade informativeness differences across gender after controlling for age. Collectively, women make more informative trades then men, but this result reverses after partitioning by age. We conclude that conditioning on the type of broker reduces unobserved individual investor heterogeneity and that demographic variables are essential to the understanding of broker clientele effect. Furthermore, clientele differences observed across broker types are market specific and dominate the effects of financial advice in determining trade informativeness.

We analyze the takeover premiums paid for a sample of domestic and cross-border bank takeovers in the European Union between 1997 and 2007. We find that acquiring banks value profitable, high-growth and low risk targets. We also find that the strength of bank regulation and supervision as well as deposit insurance regimes in Europe have measurable effects on takeover pricing. Stricter bank regulatory regimes and stronger deposit insurance schemes lower the takeover premiums paid by acquiring banks. This result, presumably in anticipation of higher compliance costs, is driven by domestic deals. Similar qualitative results are found for both the entire sample and the sample of publicly traded targets.

Regulators of new products confront a trade-off between speeding a product to market and collecting additional product quality information. The FDA's Breakthrough Therapy Designation (BTD) provides an opportunity to understand if regulators can use new policy to innovate around this trade-off. We find that the BTD program shortened clinical development times by 23% and did not affect the ex post safety profile of drugs with the designation. The BTD program had the greatest impact on less experienced firms and reduced clinical trial design complexity. The results suggest that targeted regulatory innovation can shorten R&D periods without compromising product quality.

Exploiting a discontinuity in childhood Medicaid eligibility based on date of birth, we find that more years of childhood eligibility are associated with fewer hospitalizations in adulthood. For blacks, we find a 7% to 15% decrease in hospitalizations and a suggestive 2% to 5% decrease in emergency department visits, but no similar effect for nonblacks. The effects are pronounced for utilization related to chronic illnesses and for patients living in low-income postal codes. Calculations suggest that lower rates of hospitalizations during one year in adulthood for blacks offset between 2% and 4% of the initial costs of expanding Medicaid for all children.