Product scope adjustment is a key mechanism through which multi-product firms achieve efficient resource allocations. In this paper, we take a novel perspective to study firms' product scope adjustment behavior through the lens of asset pricing. Using a unique panel scanner data set containing...

This paper contrasts real exchange rate (RER) measures based on different deflators (CPI, GDP deflator, and ULC) and discusses potential implications for the link-or lack thereof-between RER and external balance. We begin by documenting patterns in the evolution of different measures of RERs,...

The spread of COVID-19, containment measures, and general uncertainty led to a sharp reduction in activity in the first half of 2020. Europe was hit particularly hard—the economic contraction in 2020 is estimated to have been among the largest in the world—with potentially severe...

This paper contrasts real exchange rate (RER) measures based on different deflators (CPI, GDP deflator, and ULC) and discusses potential implications for the link-or lack thereof-between RER and external balance. We begin by documenting patterns in the evolution of different measures of RERs,...

Product scope adjustment is a key mechanism through which multi-product firms achieve efficient resource allocations. In this paper, we take a novel perspective to study firms' product scope adjustment behavior through the lens of asset pricing. Using a unique panel scanner data set containing...

Theory suggests that balance sheet information such as total assets, total equity, or total liabilities complements earnings information in helping investors assess a firm's profitability and estimate earnings growth. The voluntary disclosure of balance sheet information at earnings announcement...

We introduce sentiments under incomplete information into an otherwise standard real business cycle model. Individual firms receive signals about their idiosyncratic demand shocks which are confounded by sentiments. Sentiments coordinate optimal decisions of individuals through their extraction...

This paper studies the effects of collateral quality shocks on house prices, the price-rent ratio, and the macroeconomy in a dynamic general equilibrium model with housing collateral. Collateral quality is not as perfect as is typically assumed in the existing literature on collateral...