Adriano A. Rampini

William and Sue Gross Professor of Financial Economics
Professor of Finance and Economics
Ph.D., University of Chicago

Finance III: Corporate Finance Theory (Finance 953)

This second year Ph.D. course provides a rigorous introduction to the theory of corporate finance. The course is co-taught by Adriano Rampini, Felipe Varas, and Ming Yang, and meets in Spring 2014 on Wednesdays, 1:30pm-4:30pm, in the DeSanctis seminar room, starting on January 15. Topics covered include static and dynamic security design (week 1-5), liquidity (week 6-8), and macro corporate finance (week 9-14).

[Syllabus. The teaching assistant for this course is Shiming Fu.]

Spring 2014 Schedule (Tentative)

Week 1: Debt and Financing with Costly State Verification
Wednesday, 1/15, 1:30pm-4:30pm.
Papers: Townsend (1979).
Additional readings: Gale/Hellwig (1985), Mookherjee/Png (1989).

Week 2: Security Design
Wednesday, 1/22, 1:30pm-4:30pm.
Papers: DeMarzo/Duffie (1999).
Additional readings: DeMarzo (2005).

Week 3: Security Design with Moral Hazard
Wednesday, 1/29, 1:30pm-4:30pm. (Rescheduled to Wednesday, 2/5, 1:30pm-4:30pm).
Papers: Innes (1990)
Additional readings:

Week 4: Dynamic Financing with Moral Hazard
Wednesday, 2/5, 1:30pm-4:30pm. (Rescheduled to Wednesday, 2/19, 1:30pm-4:30pm).
Papers: DeMarzo/Sannikov (2006).
Additional readings: Clementi/Hopenhayn (2006), DeMarzo/Fishman (2007a,b), DeMarzo/Fishman/He/Wang (2010).

Week 5: Dynamic Financing with Limited Liability
Wednesday, 2/12, 1:30pm-4:30pm. (Rescheduled to Friday, 2/21, 9am-noon).
Papers: Biais/Mariotti/Rochet/Villeneuve (2010)
Additional readings: DeMarzo/Livdan/Tchistyi (2013).

Week 6: Illiquidity and Search in Financial Markets
Wednesday, 2/19, 1:30pm-4:30pm. (Rescheduled to Wednesday, 2/26, 1:30pm-4:30pm).
Papers: Duffie/Garleanu/Pedersen (2005).
Additional readings:

Week 7: Illiquidity and Competitive Search
Wednesday, 2/26, 1:30pm-4:30pm. (Rescheduled to Wednesday, 3/5, 1:30pm-4:30pm).
Papers: Guerrieri/Shimer/Wright (2010).
Additional reading:

Week 8: Illiquidity in Dynamic Asset Markets with Adverse Selection
Wednesday, 3/5, 1:30pm-4:30pm. (Rescheduled to Wednesday, 3/19, 1:30pm-4:30pm).
Papers: Daley/Green (2012).
Additional readings:

Week 9: Financial Intermediaries
Wednesday, 3/19, 1:30pm-4:30pm. (Rescheduled to Wednesday, 3/26, 1:30pm-4:30pm).
Papers: Diamond/Dybvig (1983), Goldstein/Pauzner (2005).
Additional readings: Morris/Shin (1998).

Week 10: Dynamic Financing with Limited Enforcement
Wednesday, 3/26, 1:30pm-4:30pm. (Rescheduled to Friday, 3/28, 9am-noon).
Papers: Rampini/Viswanathan (2013).
Additional readings: Albuquerque/Hopenhayn (2004), Cooley/Marimon/Quadrini (2004).

Week 11: Financial Intermediaries and the Macro Economy I
Wednesday, 4/2, 1:30pm-4:30pm.
Papers: Brunnermeier/Sannikov (2014).
Additional reading:

Week 12: Financing Constraints and Business Cycles
Wednesday, 4/9, 1:30pm-4:30pm.
Papers: Bernanke/Gertler (1989).
Additional readings: Scheinkman/Weiss (1986), Carlstrom/Fuerst (1997).

Week 13: Collateral, Asset Prices, and Efficiency
Wednesday, 4/16, 1:30pm-4:30pm.
Papers: Kiyotaki/Moore (1997) and Lorenzoni (2008), Inefficient credit booms.
Additional readings: Kiyotaki (1998), Kehoe/Levine (1993), Rampini/Viswanathan (2010), Kilenthong/Townsend (2011), Market based, segregated exchanges with default risk.

Week 14: Financial Intermediaries and the Macro Economy II
Wednesday, 4/23, 1:30pm-4:30pm. (Rescheduled to Tuesday, 4/22, 1:30pm-4:30pm, in DeSanctis).
Papers: Holmstrom/Tirole (1997)
Additional readings: Rampini/Viswanathan (2014), Financial Intermediary Capital.

Final Exam
Wednesday, 4/30, 1:30pm-4:30pm.