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The Role of Punctuation in the P2P Lending Market

Xiao Chen, Bihong Huang, Dezhu Ye, Apr 04, 2018

Using data from Renrendai, one of the largest P2P lending platforms in China, we investigate how the amount of punctuation used in loan descriptions influences the funding probability, borrowing rate, and default. The empirical evidence shows that the amount of punctuation is negatively associated with the funding probability and borrowing rate. We propose that the usage of punctuation affects the readability of a loan description and reflects borrowers’ self-control and cognitive ability.

Industry/Policy View The Impact of US-China Trade Tensions

Eugenio Cerutti, Gita Gopinath, Adil Mohommad, Jun 05, 2019

US-China trade tensions have negatively affected consumers as well as many producers in both countries. The tariffs have reduced trade between the US and China, but the bilateral trade deficit remains broadly unchanged. While the impact on global growth is relatively modest at this time, the latest escalation could significantly dent business and financial market sentiment, disrupt global supply chains, and jeopardize the projected recovery in global growth in 2019.

The Mandarin Model of Growth

Wei Xiong, Feb 13, 2019

The Mandarin model is defined by two key features of the Chinese economy. First, the government takes a central role in driving the economy through its active investment in infrastructure. Second, the agency problems between the central and local governments can lead to a rich set of phenomena in the Chinese economy--not only rapid economic growth propelled by the tournament among local governors, but also short-termist behaviors of local governors that directly affect China’s economic and financial stability.

Pushing on a String: State-Owned Enterprises and Monetary Policy Transmission in China

Peter Tillmann, Hongyi Chen, Apr 18, 2018

In China, a large share of enterprises is state-owned and has preferential access to finances. This should affect the way the economy responds to changes in monetary policy. We find that a policy easing is more effective than a policy tightening – which is consistent with the PBC being able to “push on a string”.

Does Good Luck Make People Overconfident? Evidence from a Natural Experiment in China

Huasheng Gao, Donghui Shi, Bin Zhao, Aug 01, 2018

We find that retail investors who win an allotment for an IPO subscription subsequently become more overconfident relative to retail investors who do not have an allotment. The former group subsequently trades more frequently and loses more money. Overall, our evidence indicates that the experience of good luck makes people more overconfident about their prospects.