Holger Breinlich, Elsa Leromain, Dennis Novy, Thomas Sampson, Ahmed Usman, 10 October 2018

How did the stock market react to the Brexit referendum of June 2016? This column shows that initial stock price movements on the day after the Leave vote were driven by fears of an economic slowdown in the UK and by a sharp devaluation of the pound. Later movements following two speeches by Theresa May in October 2016 and January 2017 were more closely correlated with potential future changes to tariffs and non-tariff barriers on UK-EU trade. This indicates that these speeches led investors to update their assessment of the likelihood of a hard Brexit.

Pietro Veronesi, 10 September 2018

Why does the stock market tend to do better under Democrat Presidents than Republican ones? In this video, Pietro Veronesi of the University of Chicago's Booth School of Business explains how the evidence seems to show that when risk aversion is very high, during ‘bad times’, voters are more to elect Democrat candidates, thus improvements in stock market performance are more visible under Democratic presidencies.

Christopher Snyder, 12 August 2017

With the press continuing to cast economics in a negative light, it is worth rethinking how our field is described to a lay audience. This column argues that even elementary principles can surprise non-economists with their power to explain a broader set of questions than most would think possible.

Robert Barro, 04 February 2016

China’s diminished growth prospects are in the news and seem to spell bad news for just about everybody. This column assesses the evidence, arguing that China’s economic growth will be much slower from now on, reducing international trade. Perhaps the biggest challenge for China will be future political tensions in reconciling economic dreams with economic realities.

Ross Levine, Chen Lin, Wensi Xie, 29 July 2015

Some have argued that the stock market serves as a ‘spare tire’ during banking crises by providing an alternative corporate financing channel. This column examines the claim using data for 36 countries spanning 20 years. The findings support the three core predictions of the spare tire view, suggesting that countries can insulate parts of their economy from future banking crises by designing appropriate legal frameworks.

Bastian Von Beschwitz, Donald Keim, Massimo Massa, 02 July 2015

High-frequency news analytics can increase market efficiency by allowing traders to react faster to new information. One concern about such services is that they might provide a competitive advantage to their users with potential distortionary price effects. This column looks at how high frequency news analytics affect the stock market, net of the informational content that they provide. News analytics improve price efficiency, but at the cost of reducing liquidity and with potentially distortionary price effects.

Simon Luechinger, Christoph Moser, 27 September 2012

The presidential election campaign is in full swing in the US. Whoever wins the presidential race will face the challenge of filling top positions in the federal administration. Since some political appointees traditionally come from the private sector, allegations of conflicts of interest will emerge. But are connected firms really expected to profit? This column sheds light on this issue.

Gábor Kézdi, Robert Willis, 19 December 2011

How to ordinary people form their beliefs about the economy? These beliefs then shape the decisions they make and can, if widely held, prove to be self-fulfilling. This column looks at surveys of ordinary people in the US and finds that the beliefs people hold and the reasons behind them vary almost as much as the outcomes they try to predict.

Hans Degryse, Frank de Jong, Vincent van Kervel, 24 November 2011

Financial innovation has brought about several new ways to trade equities: electronically, over-the-counter, through broker-dealer networks, and so on. But not all of the transactions are transparent, with many barely visible to outsiders – a practice known as ‘dark’ trades. This column finds that, in general, more ways to trade is a benefit, except when the trades are dark.

Andrew Rose, Christoph Moser, 09 October 2011

Who benefits from regional trade agreements? This column uses stock-market reactions to news about trade deals to argue that "natural" trading partners and poor economies benefit from such agreements.

Luis Viceira, John Campbell, Adi Sunderam, 26 October 2010

The historically low yields on Treasury bonds are the hallmark of a bubble, according to some commentators. This column analyses the relationship between bond yields, the stock market, and inflation over the past 50 years. It finds that the riskiness of nominal bonds changes over time and that investors and policymakers can use the changing stock-bond correlation as a real-time measure of inflation expectations.

Carlo Favero, Arie Gozluklu, Andrea Tamoni, 05 April 2010

Are long-run stock market returns predictable? This column shows that a forecasting model that uses a demographic variable – the ratio of middle-aged to young adults – as well as the dividend price ratio, performs “very well” in forecasting long-horizon stock market returns.

Nicholas Bloom, 04 June 2008

The credit crunch has produced significant volatility in the stock market. This column argues that the wave of uncertainty troubling the markets will likely induce a recession – and render policy instruments powerless to prevent it.

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