Economists

Staff Economists

 

Edward S. Prescott

headshot of Edward S. Prescott

My primary research areas are banking, financial intermediation, bank regulation, corporate finance, organizational economics and contract theory. Some of my recent research projects include the connection between compensation practices and bank risk, the use of market data for bank regulatory purposes, and recent changes to the size distribution of U.S. banks.

 

Professional Experience

Ned Prescott is a vice president in the Research Department. He has published in a variety of economic journals, including the Journal of Political Economy, the Review of Economic Studies, and the Review of Financial Studies. Presently, he serves as an associate editor of Economic Theory and the Journal of Financial Services Research, and as an editor of the Richmond Fed's Economic Quarterly.

Prescott was a visiting professor at CEMFI in Madrid, Spain in 2004, visited the European Central Bank in 2005, and taught at the University of Virginia. He joined the Richmond Fed as an economist in 1995.

Education

Ph.D., University of Chicago, 1995
B.A., Swarthmore College, 1988

Curriculum vitae

"An Experimental Analysis of Contingent Capital with Market-Price Triggers" (with Douglas Davis and Oleg Korenok). Journal of Money, Credit and Banking 46, no. 5 (August 2014): 999-1033.

"Market-Based Corrective Actions" (with Itay Goldstein and Philip Bond). Review of Financial Studies 23, no. 2 (February 2010): 781-820.

"Firms as Clubs in Walrasian Markets with Private Information" (with Robert M. Townsend). Journal of Political Economy 114, no. 4 (August 2006): 644-671.

"Private Information and Intertemporal Job Assignments" (with Robert M. Townsend). Review of Economic Studies 73, no. 2 (April 2006): 531-548.

"State-Contingent Bank Regulation with Unobserved Actions and Unobserved Characteristics" (with David A. Marshall). Journal of Economic Dynamics & Control 30, no. 11 (November 2006): 2015-2049.

"Computing Solutions to Moral-Hazard Programs Using the Dantzig-Wolfe Decomposition Algorithm." Journal of Economic Dynamics & Control 28, no. 4 (January 2004): 777-800.

"Communication in Private-Information Models: Theory and Computation." Geneva Papers on Risk and Insurance Theory 28, no. 2 (December 2003): 105-130.

"Incentives, Communication, and Payment Instruments" (with John A. Weinberg). Journal of Monetary Economics 50, no. 2 (March 2003): 433-454.

"Hired Hooves: Transactions in a South Indian Village Factor Market" (with Rolf A. Mueller and Daniel A. Sumner). Australian Journal of Agricultural and Resource Economics 46, no. 2 (June 2002): 233-255.

"Collective Organizations versus Relative Performance Contracts: Inequality, Risk Sharing, and Moral Hazard" (with Robert M. Townsend). Journal of Economic Theory 103, no. 2 (April 2002): 282-310.

"Bank Capital Regulation with and without State-Contingent Penalties" (with David A. Marshall). Carnegie-Rochester Conference Series on Public Policy 54 (June 2001): 139-184.

Issue Title Author(s)
First Quarter 2014 The Financial Crisis, the Collapse of Bank Entry, and Changes in the Size Distribution of Banks Roisin McCord
Edward S. Prescott
Second Quarter 2013 Too Big to Manage? Two Book Reviews Edward S. Prescott
First Quarter 2012 Contingent Capital: The Trigger Problem Edward S. Prescott
First Quarter 2011 A Regional Look at the Role of House Prices and Labor Market Conditions in Mortgage Default Sonya Ravindranath Waddell
Anne Davlin
Edward S. Prescott
First Quarter 2010 Introduction to the Special Issue on the Diamond-Dybvig Model Edward S. Prescott
Winter 2008 Should Bank Supervisors Disclose Information About Their Banks? Edward S. Prescott
Fall 2006 Changes in the Size Distribution of U. S. Banks: 1960 - 2005 Hubert P. Janicki
Edward S. Prescott
Fall 2005 Technological Design and Moral Hazard Edward S. Prescott
Fall 2004 Auditing and Bank Capital Regulation Edward S. Prescott
Fall 2003 Firms, Assignments, and Earnings Edward S. Prescott
Spring 2002 Can Risk-Based Deposit Insurance Premiums Control Moral Hazard? Edward S. Prescott
Summer 2001 Regulating Bank Capital Structure to Control Risk Edward S. Prescott
Fall 1999 Means of Payment, the Unbanked, and EFT '99 Edward S. Prescott
Daniel D. Tatar
Winter 1999 A Primer on Moral-Hazard Models Edward S. Prescott
Fall 1997 Group Lending and Financial Intermediation: An Example Edward S. Prescott
Winter 1997 The Pre-Commitment Approach in a Model of Regulatory Banking Capital Edward S. Prescott
Paper Title Author(s)
15-05
May 2015
Did the Financial Reforms of the Early 1990s Fail? A Comparison of Bank Failures and FDIC Losses in the 1986-92 and 2007-13 Periods Eliana Balla
Edward S. Prescott
John R. Walter
15-02
February 2015
Fixed Prices and Regulatory Discretion as Triggers for Contingent Capital Conversion: An Experimental Examination Douglas Davis
Edward S. Prescott
13-03
March 2013
Banker Compensation and Bank Risk Taking: The Organizational Economics View Arantxa Jarque
Edward S. Prescott
11-07
November 2011
Contingent Capital: The Trigger Problem Edward S. Prescott
11-01R
March 2011
An Experimental Analysis of Contingent Capital Triggering Mechanisms (Revised Oct. 2011) Douglas Davis
Edward S. Prescott
Oleg Korenok
10-16
October 2010
Optimal Bonuses and Deferred Pay for Bank Employees: Implications of Hidden Actions with Persistent Effects in Time Arantxa Jarque
Edward S. Prescott
06-12
November 2006
Market-Based Regulation and the Informational Content of Prices Philip Bond
Itay Goldstein
Edward S. Prescott
05-11
November 2005
Firms as Clubs in Walrasian Markets with Private Information: Technical Appendix Edward S. Prescott
Robert Townsend
04-2
February 2004
State-Contingent Bank Regulation With Unobserved Actions and Unobserved Characteristics David A. Marshall
Edward S. Prescott
03-9
July 2003
Mechanism Design and Assignment Models Edward S. Prescott
Robert Townsend
00-11
November 2000
Incentives, Communication, and Payment Instruments Edward S. Prescott
John A. Weinberg
00-8
September 2000
Firms as Clubs in Walrasian Markets with Private Information Edward S. Prescott
Robert Townsend
98-6
June 1998
Computing Moral Hazard Problems Using the Dantzig-Wolfe Decomposition Algorithm Edward S. Prescott
96-2
June 1996
Theory of the Firm: Applied Mechanism Design Edward S. Prescott
Robert Townsend

Manuscripts

"A Snapshot of Mortgage Conditions with an Emphasis on Subprime Mortgage Performance" (with Scott Frame and Andreas Lehnert). Manuscript, August 2008.

Discussions

Discussion of "Incentive Compensation, Accounting Discretion and Bank Capital" by Timothy W. Koch, Dan Waggoner, and Larry D. Wall. Presented at the Southern Economic Association meetings, November 2014.

Discussion of "Entry, Exit and Growth of US Commercial Banks" by John O.S. Wilson, John Goddard, and Hong Liu. Presented at the Southern Finance Association meetings, November 2014.

Discussion of "Systemic Risk in Clearing Houses: Evidence from the European Repo Market" by Charles Boissel, Francois Derrien, Evren Ors, and David Thesmar, and Denefa Bostandzic; and "Systemic Risk, Bank Capital, and Deposit Insurance around the World" by Matthias Pelster and Gregor N.F. Weiss. Presented at the FDIC/JFSR 14th Bank Research Conference, September 2014.

Discussion of "Compensating Financial Experts" by Vincent Glode and Richard Lowery. Presented at the 2012 Financial Intermediation Research Society conference, Minneapolis, June 2012.

Discussion of "When Monitors Don't Help: The Costs of Collusion-Proof Contracts" by Abigail Brown. Presented at the IBEFA conference, Chicago, January 2012.

Discussion of "Liquidity Hoarding" by Douglas Gale and Tanju Yorulmazer. Presented at the Federal Reserve "Day Ahead Conference," Chicago, January 2012.

Discussion of Gadi Barlevy and Jonas D.M. Fisher, "Mortgage Choices and Housing Speculation;" and Andreas Fuster and Paul S. Willen, "$1.25 Trillion is Still Real Money: Some Facts About the Effects of the Fed's Mortgage Market Investments." Presented at the Federal Reserve System/FDIC Conference on "Mortgage Foreclosures and the Future of Housing Finance," October 2010.

Discussion of Fabrizio Mattesini, Cyril Monnet, and Randall Wright, "Banking: A Mechanism Design Approach." Presented at "Eighth Philadelphia Conference on Monetary and Macroeconomics," March 2010.

Discussion of William Roberds and Stacey L. Schreft, "Data Breaches and Identity Theft." Presented at "Recent Developments in Consumer Credits and Payments" Conference, Federal Reserve Bank of Philadelphia, September 2009.

Discussion of Charles M. Kahn and Joao A.C. Santos, "Endogenous Financial Fragility and Prudential Regulation." Presented at NAEFA, New Orleans, January 2008.

Discussion of Morton L. Bech and Rod Garrat, "Illiquidity in the Interbank Payments System following Wide-Scale Disruptions." Presented at "Modern Financial Institutions, Financial Markets, and Systemic Risk" Conference, Atlanta, April 2006.

Contact Us

Richmond

Edward S. Prescott
(804) 697-8206