Globalization

We identify model-free mispricing factors and relate them to global stock prices and investor beliefs. The factors are model-free as they measure variation in the relative prices of assets with the same cash ows. We design three factors to re ect the beliefs and capital ows of important clientele: investors in United States (US), developed, and emerging stock markets; and individuals and institutions. Together the three factors capture most (52%) of the systematic variation in price premiums of individual securities.

This article analyzes the hedging potential of real estate and especially looks at the impact of lease contracts in various countries around the world on the inflation hedge capability for both expected and unexpected inflation. The dataset consists of direct real estate rent and capital value data for 59 cities/MSAs in 25 countries between 1991 and 2020 to make international comparison over a long time period possible. The results indicate that real estate is a good hedge against inflation, and especially against unexpected inflation.

In a monetary union, the risk-free rate cannot respond to country-level fiscal shocks, leaving only default spreads and convenience yields to respond. Empirically, we find that convenience yields play an important role as fiscal shock absorbers in the Eurozone. Consistent with downward-sloping demand for safety, Eurozone countries earn larger convenience yields after they release positive fiscal news.

We examine the optimal financing of infrastructure when governments have limited financial commitment and can expropriate rents from private sector firms that manage infrastructure. While private firms need incentives to implement projects well, governments need incentives to limit expropriation. This double moral hazard limits the willingness of outside investors to fund infrastructure projects.

How does the internet affect young people's mental health? We study this question in the context of Italy using administrative data on the universe of cases of mental disorders diagnosed in Italian hospitals between 2001 and 2013, which we combine with information on the availability of high-speed internet at the municipal level. Our identification strategy exploits differences in the proximity of municipalities to the pre-existing voice telecommunication infrastructure, which was previously irrelevant but became salient after the advent of the internet.

This article uses advanced natural language processing (NLP) methods to identify companies that are aligned with the UN Sustainable Development Goals (SDGs) based on the text in their sustainability disclosures. Using the Corporate Social Responsibility (CSR) reports of Russell 1000 companies between 2010–2019, we apply a logistic classifier, support vector machines (SVM), and a fully-connected neural network to predict alignment with the SDGs.

We investigate the impact of uneven transparency regulation across countries and industries on the location of economic activity. Using two distinct sources of regulatory variation—the varying extent of financial-reporting requirements and the staggered introduction of electronic business registers in Europe—, we consistently document that direct exposure to transparency regulation is negatively associated with the focal industry’s economic activity in terms of inputs (e.g., employment) and outputs (e.g., production).