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Paula Cocoma ♦ We propose a theoretical explanation for the positive pre-announcement drift documented ahead of scheduled announcements, using the Federal Open Market Committee (FOMC) meetings as main example. The framework entails a general equilibrium model of disagreement (differences-of-opinion), where…

Matthew Baron and Isaac Green ♦ We study removals of “credit ceilings,” quantitative limits on bank credit supply imposed by many countries until the 1980s. Exploiting differences in loan types affected, we find that these removals predict increases in bank credit,…

Wei-Fong Pan ♦ This study examines the impact of recreational marijuana laws (RMLs) on firm-level employment using an imputation-based difference-in-differences approach across U.S. states. RMLs significantly reduce employment, particularly among firms with high-skilled labour, strong union presence, permissive corporate cultures,…

Andreas Ek, Gunes Gokmen, and Kaveh Majlesi ♦ This paper studies how cultural heritage influences the differences in risk taking in financial markets. We combine data on the asset allocation of second-generation immigrants in Sweden with risk taking culture in…

Niclas Käfer, Mathis Mörke, Florian Weigert, and Tobias Wiest ♦ We utilize Bayesian model averaging to estimate a stochastic discount factor (SDF) for single-stock options. A Bayesian model averaging SDF outperforms reduced-form benchmark models in-sample and out-of-sample in pricing option…