James Paron

Contact Information

Research Interests: Asset pricing, household finance, and macro-finance

Links: CV, Personal Website

Maxwell Miller, James Paron, Jessica Wachter (Working), Sovereign default and the decline in interest rates.
Abstract: Yields on sovereign debt have declined dramatically across the developed world over the last half-century. Standard explanations of this decline include a change in discount rates due to an aging population or increased demand for assets from abroad. We show that these explanations encounters difficulties when confronted with the full range of evidence across asset classes. We propose that this decline was due to a decline in inflation expectations/default risk on sovereign debt. We argue that this explanation has a better chance of capturing an important feature of the decline in interest rates: namely that it has spanned centuries. We incorporate this explanation into an otherwise standard model of asset prices, augmented with inventory storage. An effective lower bound implies the existence of such a storage technology; otherwise there are arbitrage opportunities within the model. Including storage in a production-based model allows us to match the reduction in investment and GDP growth observed over the last three decades.

PSYC273 - Neuroeconomics
This course will introduce students to neuroeconomics, a field of research that combines economic, psychological, and neuroscientific approaches to study decision-making. The course will focus on our current understanding of how our brains give rise to decisions, and how this knowledge might be used to constrain or advance economic and psychological theories of decision-making. Topics covered will include how individuals make decisions under conditions of uncertainty, how groups of individuals decide to cooperate or compete, and how decisions are shaped by social context, memories, and past experience.
PSYC273001

PSYC273 - NEUROECONOMICS
This course will introduce students to neuroeconomics, a field of research that combines economic, psychological, and neuroscientific approaches to study decision-making. The course will focus on our current understanding of how our brains give rise to decisions, and how this knowledge might be used to constrain or advance economic and psychological theories of decision-making. Topics covered will include how individuals make decisions under conditions of uncertainty, how groups of individuals decide to cooperate or compete, and how decisions are shaped by social context, memories, and past experience.

Maxwell Miller, James Paron, Jessica Wachter (Working), Sovereign default and the decline in interest rates.