NEW: I started a blog during the lockdown to stay in contact with students. I post short pedagogical articles explaining how to use tools learned in HEC finance classes to understand current events in financial markets. Read the blog here
When imperfect asset pledgeability creates endogenous borrowing constraints, asset markets are endogenously segmented, assets trade at a discount relative to replicating portfolios of derivatives, and expected excess returns are concave in beta.
The late 1990s tech bubble attracted many high-skill young workers, who initially enjoyed higher wages. In the long run, however, they end up earning 6% less than individuals who started in other sectors.