Funds from this grant support a conference organized by Glen Weyl and Eric Posner of the University of Chicago on “Benefit-Cost Analysis for Financial Regulation.” At the conference, economists, regulators, and lawyers will present and debate frameworks for evaluating government interventions in financial markets with the specific goal of catalyzing, collecting, and synthesizing the normative and quantitative research on the social welfare implications of rulemaking associated with the Dodd-Frank Act. Conference participants will represent a broad spectrum of practical and conceptual approaches to the issues at hand. Findings are scheduled to appear in a special issue of the Journal of Legal Studies. The hope is that such efforts can point the way toward more efficient, effective, and rational regimes for regulating the financial sector.

This grant to Yale University supports the planning and development of a new “Program on Financial Stability” aimed at training a new generation of experts on financial regulation. Led by Yale Finance and Management professor Andrew Metrick, the program will aim to translate and synthesize research on macroprudential regulation that speaks to practitioners; compile case studies containing raw data and documentation that describe the interaction between regulation and firm behavior; train early-career scholar-regulators employed by major national and international agencies; and help build an international community of scholars, regulators, and financial experts. If successful, the program promises to provide an invaluable training resource that responds to the need to develop the human, social, and intellectual capital that financial regulators need to fend off future financial crises.

The published research literature on any given topic likely represents a highly unrepresentative sample of all that is known. That is because authors and editors are rarely interested in publishing ambiguous or disconfirming results concerning a given hypothesis. Such “publication bias” creates vexing problems when performing formal meta-analyses, or whenever anyone tries to interpret the results of a body of empirical work.Suppose, however, that investigators could agree to collect and post public commitments to their research plans, including their hypotheses and methodologies, in advance of collecting all their data. Not only could simple transparency like this go a long way toward alleviating publication bias, it could also deter other ways researchers have of cherry picking and distorting results.This grant funds a project by the American Economic Association (AEA) to bring just such a thing about. Led by MIT economist Esther Duflo, the AEA will set up a national registry for randomized controlled trials in economics. By linking study designs to related datasets and by making study details more easily searchable, the proposed registry would advance the Foundation’s efforts to promote communication, transparency, and best practices among scholarly researchers.

This grant supports a project led by Richard Morgenstern of the nonpartisan think tank Resources for the Future (RFF) to study the effects of specific regulations governing food safety, industrial water pollution, air toxics, and municipal water pollution. Morgenstern will also commission up to six additional regulatory assessments by outside academics whose research techniques meet high scientific criteria. The studies will focus not only on the evaluation of the specific regulations themselves, but on how new datasets and measurement capabilities can improve regulatory design and support more effective regulatory assessment. Results will be disseminated through a formal report and workshop targeted at relevant stakeholders in the government, academic, and NGO communities, and through a series of online outreach activities.