Publications

We present a model of “animal spirits” in which context and emotions affect macroeconomic beliefs by shaping which experiences people recall to simulate similar future aggregate states. We test this mechanism by priming Dutch National Bank Survey...

In a model of memory and selective recall, household inflation expectations remain rigid when inflation is anchored but exhibit sharp instability during inflation surges, as similarity prompts retrieval of forgotten high-inflation experiences. Using data...

Why do we see both advertising and powerful consumer habits for well-known and intrinsically similar brands? We offer an explanation based on the idea that, as in Bordalo et al. (2020), a consumer is more likely to demand a good if she recalls the...

We present a theory of choice in which attention to the features of options is determined by the decision maker’s categorization of the current problem in a set of problems she solved in the past. Categorization depends on goal-relevant and contextual...

Recent empirical work has revived the Minsky hypothesis of boom-bust credit cycles driven by uctuations in investor optimism. To quantitatively assess this hypothesis, we incorporate diagnostic expectations into an otherwise standard business cycle model...

We address the joint hypothesis problem in cross-sectional asset pricing by using measured analyst expectations of earnings growth. We construct a firm-level measure of Expectations Based Returns (EBRs) that uses analyst forecast errors and revisions and...

The analysis of corporate governance begins with a central feature of modern capitalism -- the separation of ownership and control in large corporations -- first empirically documented by Berle and Means (1932). Such separation entails several agency...