Publications

June 2018
Article

Deviations from Covered Interest Rate Parity

By: Wenxin Du, Alexander Tepper and Adrien Verdelhan

We find that deviations from the covered interest rate parity (CIP) condition imply large, persistent, and systematic arbitrage opportunities in one of the largest asset markets in the world. Contrary to the common view, these deviations for major currencies are not... View Details

Keywords: Interest Rates; Financial Markets; Banks and Banking; Price

Article

You Can't Always Get What You Want: The Real Exchange Rate and Manufacturing Performance in a World of Global Value Chains

By: Laura Alfaro, Alejandro Cuñat, Harald Fadinger and Yanping Liu

Real exchange rate devaluations are typically seen as a viable development strategy, but the effectiveness of the approach may vary over time and across countries. This column explores this issue by focusing on the microeconomics of firm-level responses to exchange... View Details

Keywords: Manufacturing Performance; Real Exchange Rate; Global Value Chains; Economics; Production; Performance

15 Apr 2015
Research & Ideas

Why Americans Voted for an Income Tax

Roosevelt in the 1930s: "With the enactment of the Income Tax Law of 1913, the Federal Government began to apply effectively the widely accepted principle that taxes... View Details

Keywords: by Matthew C. Weinzierl

January 2009 (Revised October 2011)
Case

Barack Obama and the Bush Tax Cuts (A)

By: Matthew C. Weinzierl and Eric D. Werker

As his inauguration approached, President-elect Obama faced a financial sector meltdown, a costly bailout, and massive government deficits. With the economy in recession, interest rates near zero, and joblessness on the rise, Obama needed to decide whether, and how... View Details

Keywords: Decision Choices and Conditions; Financial Crisis; Borrowing and Debt; Financial Management; Policy; Government Administration; Taxation; United States

Educators

Article

Modeling dependencies between rating categories and their effects on prediction in a credit risk portfolio

18 Jul 2005
Research & Ideas

Time to Rethink the Corporate Tax System?

characterize profits to tax authorities and capital markets separately). There is also much anecdotal evidence on the profusion of tax shelters and compensation incentives for managing View Details

Keywords: by Ann Cullen

November 2021
Article

A Salient Sugar Tax Decreases Sugary Drink Buying

By: Grant E. Donnelly, Paige Guge, Ryan Howell and Leslie John

Many governments have introduced sugary drink excise taxes to reduce purchasing and consumption of such drinks; however, they do not typically stipulate how such taxes should be communicated at point-of-purchase. Historical, field, and experimental data entailing over... View Details

Keywords: Decision-making; Open Data; Open Materials; Preregistered; Health; Policy; Taxation; Consumer Behavior; Decision Making

March 2009
Article

Earnings Management and Corporate Tax Shelters, and Book-Tax Alignment

By: Mihir Desai and Dhammika Dharmapala

This paper reviews recent evidence analyzing the link between earnings management and corporate tax avoidance and considers the implications for how policymakers should evaluate the financial reporting environment facing firms. A real-world tax shelter is dissected to... View Details

Keywords: Earnings Management; Taxation; Financial Reporting; Business and Shareholder Relations

SSRN

31 Aug 2009
Research & Ideas

Why Competition May Not Improve Credit Rating Agencies

S&P and Moody's, but has become a peer over the last decade or so. We use the appearance of Fitch as a way to test for the effect of competition on ratings. When Fitch has a higher market share in issuing View Details

Keywords: by Martha Lagace; Financial Services

02 Jul 2018
Research & Ideas

Corporate Tax Cuts Don't Increase Middle Class Incomes

University professors Suresh Nallareddy and Juan Carlos Suárez Serrato, analyze data created by tax filings to compare effects on workers at varying compensation levels in different US states with and... View Details

Keywords: by Roberta Holland

Research Summary

The Effects of Firm Size and Sales Growth Rate on Inventory Turnover Performance in the U.S. Retail Sector

We review and extend recent academic literature on the inventory turnover performance of public-listed U.S. retailers using firm-level financial data. Past research has shown that there is a large variation in the inventory turnover performance of retailers across... View Details

January 2003
Case

Exchange Rate Policy at the Monetary Authority of Singapore

By: Mihir A. Desai and Mark Veblen

The Monetary Authority of Singapore (MAS) is responsible for the country's monetary policy, and its decisions are intended to support the country's overall strategy for sustainable economic growth with price stability. MAS has been very successful in managing exchange... View Details

Keywords: Currency Exchange Rate; Policy; Money; Singapore

Educators

2007
Working Paper

Taxes and Portfolio Choice: Evidence from JGTRRA's Treatment of International Dividends

By: Mihir A. Desai and Dhammika Dharmapala

This paper investigates how taxes influence portfolio choices by exploring the response to the distinctive treatment of foreign dividends in the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA). JGTRRA lowered the dividend tax rate to 15% for American equities... View Details

Keywords: Equity; Financial Markets; International Finance; Investment Portfolio; Government Legislation; Taxation; United States

October 2011 (Revised October 2011)
Supplement

Barack Obama and the Bush Tax Cuts (B)

By: Matthew Weinzierl and Jacob Kuipers

President Obama signs a major fiscal stimulus package and then must debate whether to extend the Bush tax cuts.
Instructors may also obtain a Teaching Note, written by this case supplement's author, that provides suggestions for using this case supplement... View Details

Keywords: Taxation; Government and Politics; United States

09 Feb 2007
Working Paper Summaries

Do Corporate Social Responsibility Ratings Predict Corporate Social Performance?

Keywords: by Aaron K. Chatterji, David I. Levine & Michael W. Toffel

April 2018
Article

The Power of Voice in Stimulating Morality: Eliciting Taxpayer Preferences Increases Tax Compliance

By: Cait Lamberton, Jan-Emmanuel De Neve and Michael I. Norton

Decisions about paying taxes represent one of the most common moral quandaries faced by citizens. In the present research, we argue that taxpayer compliance can be raised by increasing “voice”: allowing taxpayers to express non-binding preferences about the way their... View Details

Keywords: Morality; Public Policy; Ethics; Moral Sensibility; Taxation; Policy; Attitudes; Governance Compliance