Many economists believe that the stock market plays an important role in efficiently allocating capital to its most productive uses. This standard story of the stock market was called into question by events in the late 1990s, when some observers believed that stock market overvaluation - or a...

By studying the gap between the discount rates used by executives and shareholders, we assess the extent to which governance problems distort firm behavior. The estimation strategy recovers discount rates used by executives from the pattern of their actual investment spending. Our empirical work...

This study provides some perspective on analyzing the effects of corporate taxation on capital formation. Our framework translates tax policy legislation into real outcomes, and identifies three parameters that play a central role in determining the impact on policy. The remainder of the paper...

This paper examines the history, scope, and types of investment taxcredits (ITC's) implemented in the United States. Changing viewsabout the role of this fiscal policy tool are related to changing viewsabout the structure of the economy and the possibilities forconstructive public policies. The...

The possibility of creating a state bank has received much recent attention in the United States. In 2021, six states introduced legislation to create a state bank; in 2019, similar legislation was enacted in California for municipal banks. This paper develops a framework to evaluate state...

Interest in the United States in creating banks owned and operated by the state has increased dramatically in recent years. In 2023 or 2024, legislation was introduced in eight states to start a bank. In 2019, similar legislation was enacted in California for the creation of municipal banks....

The standard model of strategic tax competition assumes that government policymakers are perfectly benevolent, acting solely to maximize the utility of the representative resident in their jurisdiction. We depart from this assumption by allowing for the possibility that policymakers also may be...