Cryptocurrency prices differ across countries, and these price deviations fluctuate widely. We model cryptocurrencies as an asset immune from local government expropriation, and trust serves as the perceived probability of government misconduct. After political scandal outbreaks, Bitcoin prices rise by 1.31% and Ethereum prices by 0.83% relative to their U.S. dollar prices on average. The price deviation responses are larger in countries where citizens have less trust in government. With panel regressions, we show domestic cryptocurrency prices become more expensive when higher volumes of Google searches are related to domestic institutional failures.

We evaluate Eugene F. Fama's claim that stock prices do not exhibit price bubbles. Based on US industry returns (1926‒2014) and international sector returns (1985‒2014), we present four findings (1) Fama is correct in that a sharp price increase of an industry portfolio does not, on average, predict unusually low returns going forward; (2) such sharp price increases predict a substantially heightened probability of a crash but not of a further price boom; (3) attributes of the price run-up, including volatility, turnover, issuance, and the price path of the run-up, help forecast an eventual crash; and (4) these attributes also help forecast future returns. Results hold similarly in US and international samples.

Can massive online retailers such as Amazon and Alibaba issue digital tokens that potentially compete with bank debit accounts? There is a long history of trading stamps and loyalty points, but new technologies are poised to sharply raise the significance of redeemable assets as a store of value. Here, we develop a simple stylized model of redeemable tokens that can be used to study sales and pricing strategies for issuing tokens, including ICOs. Our central finding is that platforms can potentially earn higher revenues by making tokens non-tradable unless they can generate a sufficiently high outside-platform convenience yield.

We propose a fiscal policy expectations mechanism. When bad macro news arrives (in our study, when initial jobless claims (IJC) are higher than expected), investors may expect more generous government spending and drive up aggregate stock prices through the expected cash flow channel. Using a time-series sample from January 2013 to March 2021, we find that this phenomenon emerges when newspapers mention fiscal policy more. In the cross section, firms expected to receive more government spending – through stimulus supports during COVID-19 or procurement contracts before 2020 – exhibit higher individual stock returns when bad IJC shocks arrive.