Finance Professor at Michigan State University @MSUBroadCollege | @MichiganRoss PhD | @HuntsmanSchool Econ | @AmbasciataUSA alum
Ann Arbor, MI
Joined March 2009
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1/ New paper with Hayong Yun:
“Someone Else’s Abatement: Data Centers, Overlapping Governments, and the Retreat from Voter-Approved Debt.”
We ask a simple question: When governments give data centers tax breaks, who actually bears the cost? 🧵 papers.ssrn.com/sol3/papers.…
10/ The broader takeaway:
A tax incentive can separate
who makes the decision,
who receives the economic gains,
who bears the fiscal cost, and
who retains control over public investment.
In this case, the consequences extend all the way to voters’ role in local borrowing.
Ryan Israelsen retweeted
How much of published finance holds up?
I attempted to replicate the main result of every paper in JF, JFE & RFS, 2000–2020.
1,328 in-sample replications; 1,005 out-of-sample. 75% reproduced in sample. But only 42% in later data. Median coeff. : 0.93 → 0.45 of the published.
Wonderful essay for anyone interested in academic finance.
Fair warning: this is long, and it is nerdy. About 15,000 words on the history of asset pricing, the branch of economics that asks why a share, a bond or an option is worth what it is worth. Nobody asked for it. I wrote it because I could not find it: the field is young enough that its founders wrote their own history, and that history is a tidy sequence of theorems from Bachelier to Black and Scholes that leaves out the machines (a magnetic tape in Chicago, a research design, a regression run monthly for fifty years), the money (the brokerage that paid for the first database, the asset managers who now fund the research), and the part where the field stopped agreeing with itself.
It is also personal, and biased in ways I try to declare. I spent twenty years in the field, at INSEAD, UCLA and Nova, and forty managing money, from the Lisbon exchange at nineteen to a hedge fund and a Soros mandate to Atrium today. I knew or worked with many of the people in it, and I say what I learned from them, at lunch as much as in seminars.
It ends with the only two lists I trust: what seventy years of theory and data have established well enough to tell a client, and what we still do not know, including the biggest asset on earth, human capital, and which businesses AI will replace.
If you are a young researcher entering the field, this is the text I wish someone had handed me. If you are not, the two lists at the end are for you, and they are short.
Ryan Israelsen retweeted
.@israelsen wish we had this handy chart when we wrote about polarization in financial news comparing NYT and WSJ!
Ryan Israelsen retweeted
The black outline is the Austro-Hungarian Empire.
So why can you still see it in a Romanian election map from 2014?
Because the old boundary of Austria-Hungary still leaves a remarkably clear imprint on how parts of Romania vote.
Why?
1/n
Ryan Israelsen retweeted
Years of revisions later, I’m thrilled that “A Model of the Data Economy” with M. Farboodi is out in ReStud. Data is an asset, a by-product, fuel for AI predictions, and a means of payment. What does that change about macroeconomics? doi.org/10.1093/restud/rdag0…
Ryan Israelsen retweeted
A study of AI's recommendation for household portfolios, from Bruce I. Carlin, @israelsen, and Christopher F. Wazzan nber.org/papers/w35153
Keweenaw County in Michigan’s Upper Peninsula only has about 2,000 people (MI’s least populous county), but apparently has tons of PhDs - around 100 of the locals.
