Finance Seminar（2016-16）

Topic: Competition, Markups, and Predictable Returns

Speaker: Howard Kung, London Business School

Time: Wednesday, 14 September, 10:00-11:30

Place: Room 217, Guanghua Building 2

Abstract:

Imperfect competition is an important channel for time-varying risk premia in asset markets. We build a general equilibrium model with monopolistic competition and endogenous firm entry and exit. Endogenous variation in industry concentration generates countercyclical markups, which amplifies macroeconomic risk. The nonlinear relation between the measure of firms and markups endogenously generates countercyclical macroeconomic volatility. With recursive preferences, the volatility dynamics lead to countercyclical risk premia forecastable with measures of competition. Also, the model produces a U-shaped term structure of equity returns.

Introduction:

Dr. Kung was an Assistant Professor of Finance at the University of British Columbia prior to joining London Business School in 2014. He completed his PhD at Duke University and prior to his doctorate, he studied at the University of Virginia.Dr. Howard Kung conducts research at the intersection of asset pricing and macroeconomics. His recent research studies how firms’ innovation decisions impact economic growth and asset markets, how changes in uncertainty affect firm investment decisions, and how restructuring the maturity structure of government debt can stimulate the economy.

//www.london.edu/faculty-and-research/faculty/profiles/kung-h#.V9DKMOz7zd0

Your participation is warmly welcomed!