2017 - 18 Year in Review

19 Itay Goldstein is Joel S. Ehrenkranz Family Professor in the finance department at the Wharton School at the University of Pennsylvania. He is also the coordinator of the PhD program in finance and holds a secondary appointment as professor of economics at the University of Pennsylvania. Professor Goldstein has been on the faculty of the Wharton School since 2004, three years after earning his PhD in economics from Tel Aviv University. He is an expert in the areas of corporate finance, financial institutions, and financial markets, focusing on financial fragility and crises and on the feedback effects between firms and financial markets. His research has been published in top academic journals, including the American Economic Review, the Journal of Finance , the Journal of Financial Economics , the Review of Economic Studies , and the Review of Financial Studies . His research has also been featured in the popular media in the Economist, Wall Street Journal, Financial Times, Bloomberg, Forbes, National Public Radio, and others. Goldstein is an editor of the Review of Financial Studies . During his visit, he presented his work related to the US Federal Reserve’s purchase of both agency mortgage-backed securities (MBS) and Treasury securities to conduct quantitative easing (QE). Using micro-level data, he and coauthors find that banks benefiting from MBS purchases increased mortgage origination, compared to other banks. At the same time, these banks reduced commercial lending, and firms that borrowed from these banks decreased investment. The effect of Treasury purchases was different: either positive or insignificant in most cases. Their results suggest that MBS purchases caused unintended real effects and that Treasury purchases did not cause a large positive stimulus to the economy through the bank lending channel. OCTOBER 16–20, 2017 ITAY GOLDSTEIN Joel S. Ehrenkranz Family Professor, Finance Department, Wharton School at the University of Pennsylvania