Research
Working Papers
"Institutional investors in the market for single-family housing: Where did they come from, where did they go?"
- Myron Scholes Prize (Stanford GSB)
- Finalist, Best Student Paper Award, UEA Toronto 2023
The Real Cost of Benchmarking (with Christian Kontz) (SSRN)
- Media Coverage: Matt Levine's Money Stuff (Bloomberg), Frankfurter Allgemeine Zeitung
- FESE De La Vega Prize 2026
- SFS Cavalcade 2025 PhD Student Award
- FIRS Conference 2025 PhD Student Prize
- Brandes Center Prize Shortlist
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Resilient traders make safer assets (Draft available upon request)
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Valuation Overhang
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Human capital investment with declining interest rates
Abstract
Since 2012 the U.S. market for single-family homes has experienced a large and unprecedented rise in rental purchases by institutional investors or ``Wall Street Landlords''. My paper causally attributes the entry of these financially unconstrained investors to an increase in expected returns that is driven by (i) declining long-term interest rates and (ii) tighter household funding constraints. After entry into a local market, house prices and rents grow 2pp and 1.2pp faster per year. The majority of faster house price growth can be accounted for by market timing and would likely also occur in the absence of institutional investors. Faster rental growth cannot be accounted for by market timing, suggesting that institutional investors use their size to extract markups in rental markets. I replicate this evidence in a stylized model of the residential housing market in which funding-constrained households bid against unconstrained investors.
Abstract
Benchmark-linked capital flows increase firms' CAPM βs, thereby raising managers' perceived cost of equity and reducing investment. Using exogenous variation from Russell and S&P 500 reconstitutions, we show that inclusion in a benchmark stock index increases a stock's CAPM β. Managers interpret the higher β as a higher cost of equity and reduce investment. Consistent with this mechanism, benchmark inclusion also raises the perceived cost of equity among stock analysts and regulators. Industries with larger increases in βs due to benchmarking have accumulated less capital over the past two decades. Benchmark-induced changes in the cross-section of CAPM βs do not cancel out but affect aggregate investment because higher βs fall on many firms with high investment elasticities, while lower βs benefit a few large but inelastic firms.
Work in progress
Abstract
This paper documents that the sectoral profile of a country in the global trade and production network generates cross-sectional variation in trade elasticities with respect to aggregate income. Countries that export (import) goods and services with high income elasticities, such as commodities or durables, are more (less) exposed to global business cycle shocks, appreciate (depreciate) during global expansions and depreciate (appreciate) in global downturns. Conversely, countries that export (import) goods and services with low income elasticities, such as tradable services, are less (more) exposed to global business cycle shocks, depreciate (appreciate) in global expansions and appreciate (depreciate) in global downturns. This gives rise to a ``trade carry trade'' that explains real interest rate differentials, carry trade returns and exchange rate volatilities across countries and currencies. I verify the intuition of this mechanism by estimating trade elasticities with respect to aggregate income in the OECD input-output tables.