Many believe that compensation, misaligned from shareholders' value due to managerial entrenchment, caused financial firms to take creative risks before the Financial Crisis of 2008. We argue instead that even in a classical principal-agent setting without entrenchment and with exogenous...

We study the impact of politicians' asset allocation on their economic bill proposals. Using a novel database of comprehensive financial disclosures of Congress members in South Korea, we find that the Congress members with more real estate assets in their portfolios are less likely to propose...