Sound the alarm: fraud in neuroscience.

We expect scientists to follow a code of honor and conduct and to report their research honestly and accurately, but so-called scientific misconduct, which includes plagiarism, faked data, and altered images, has led to a tenfold increase in the number of retractions over the past decade. Among the reasons for this troubling upsurge is increased competition for journal placement, grant money, and prestigious appointments. The solutions are not easy, but reform and greater vigilance is needed.

Essays in Macro Finance

I study the link between capital markets and sources of macroeconomic risk. In chapter 1 I show that expected inflation risk is priced in the cross section of stock returns even after controlling for cash flow growth and volatility risks. Motivated by this evidence I study a long run risk model with a built-in inflation non-neutrality channel that allows me to decompose the real stochastic discount factor into news about current and expected cash flow growth, news about expected inflation and news about volatility. The model can successfully price a broad menu of assets and provides a setting for analyzing cross sectional variation in expected inflation risk premium. For industries like retail and durable goods inflation risk can account for nearly a third of the overall risk premium while the energy industry and a broad commodity index act like inflation hedges. Nominal bonds are exposed to expected inflation risk and have inflation premiums that increase with bond maturity. The price of expected inflation risk was very high during the 70's and 80's, but has come down a lot since being very close to zero over the past decade. On average, the expected inflation price of risk is negative, consistent with the view that periods of high inflation represent a "bad" state of the world and are associated with low economic growth and poor stock market performance. In chapter 2 I look at the way capital markets react to predetermined macroeconomic announcements. I document significantly higher excess returns on the US stock market on macro release dates as compared to days when no macroeconomic news hit the market. Almost the entire equity premium since 1997 is being realized on days when macroeconomic news are released. At high frequency, there is a pattern of returns increasing in the hours prior to the pre-determined announcement time, peaking around the time of the announcement and dropping thereafter.

Election Quality and International Observation 1975-2004: Two New Datasets

This paper introduces two new datasets on national level elections from 1975 to 2004. The data are grouped into two separate datasets, the Quality of Elections Data and the Data on International Election Monitoring. Together these data sets provide original information on elections, election observation and election quality, and will enable researchers to study a variety of research questions. The datasets will be publicly available and are maintained at a project website.