On the characterization of the exponential distribution by the independence of its integer and fractional parts

It is well–known that the fractional part and integer part of an exponentially distributed random variable are independent. Under some regularity conditions, the independence of the fractional part and integer part of a positive random variable characterizes the exponential distribution.     

Gravity and culture in foreign portfolio investment

Using panel regression estimates from the IMF’s CPIS survey of foreign debt and equity portfolios across 174 originating and 50 destination countries from 2001 to 2007, we clarify the role of culture and extend the set of cultural variables that have been investigated in gravity models of foreign portfolio investment (FPI). Incorporating Hofstede’s cultural dimensions of individualism, masculinity, power distance and uncertainty avoidance, we show how cultural traits in both originating and destination countries, as well as the cultural distances that separate them, interact with geographic distance and other gravity variables to determine global FPI patterns. We find hitherto unreported effects and show that while gravity always deters FPI, aspects of culture and cultural distance can offset this by supporting FPI.     

The private placement of bank equity

This paper investigates the role of private placements of common stock as a source of bank capital. Our results show that information asymmetry problems that typically attend new offers of bank equity are mitigated in the private placement process. Moreover buyers of privately placed common stock seem to provide a quality certification of capital deficient bank holding companies. Our evidence is also consistent with the notion that buyers of privately placed common stock provide a monitoring service that aligns the interest of the bank's managers and shareholders. Finally, we find no evidence that private placements are predominately motivated by incumbent management's attempts to sell equity to a friendly buyer at the expense of the bank's current shareholders.     

IMPROVING EQUALITY OF OPPORTUNITY: NEW INSIGHTS FROM BIG DATA

Children's chances of earning more than their parents have fallen from 90% to 50% over the past half century in America. How can we restore the American Dream of upward mobility for our children? In this talk, Raj Chetty discusses recent work that he and his colleagues at Opportunity Insights have done addressing this question. Among other topics, Professor Chetty covers how and why children's chances of climbing the income ladder vary across neighborhoods, how race still matters for economic mobility in the U.S. today, and the relationship between equality of opportunity, innovation, and growth. (JEL I3, H4, D9)