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. He also 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. Currenty, Prescott is on leave at the Federal Reserve Bank of Cleveland.

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.


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.

Second Quarter 2013

Too Big to Manage? Two Book Reviews

Edward S. Prescott

First Quarter 2012

Contingent Capital: The Trigger Problem

Edward S. Prescott

Fall 2006

Changes in the Size Distribution of U. S. Banks: 1960 - 2005

Edward S. Prescott and Hubert P. Janicki

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

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 and Daniel D. Tatar

Winter 1999

A Primer on Moral-Hazard Models

Edward S. Prescott

November 2011, No. 11-07

Contingent Capital: The Trigger Problem

Edward S. Prescott

March 2011, No. 11-01R

An Experimental Analysis of Contingent Capital Triggering Mechanisms (Revised Oct. 2011)

Edward S. Prescott, Douglas Davis and Oleg Korenok

November 2006, No. 06-12

Market-Based Regulation and the Informational Content of Prices

Edward S. Prescott, Itay Goldstein and Philip Bond

November 2005, No. 05-11

Firms as Clubs in Walrasian Markets with Private Information: Technical Appendix

Edward S. Prescott and Robert Townsend

February 2004, No. 04-2

State-Contingent Bank Regulation With Unobserved Actions and Unobserved Characteristics

Edward S. Prescott and David A. Marshall

July 2003, No. 03-9

Mechanism Design and Assignment Models

Edward S. Prescott and Robert Townsend

November 2000, No. 00-11

Incentives, Communication, and Payment Instruments

Edward S. Prescott and John A. Weinberg

September 2000, No. 00-8

Firms as Clubs in Walrasian Markets with Private Information

Edward S. Prescott and Robert Townsend

June 1996, No. 96-2

Theory of the Firm: Applied Mechanism Design

Edward S. Prescott and Robert Townsend

March 2015, No. 15-03

Explaining the Decline in the Number of Banks since the Great Recession

Edward S. Prescott, Roisin McCord and Tim Sablik

February 2012, No. 12-02

Experimenting with Contingent Capital Triggers

Edward S. Prescott and David A. Price

May 2009, No. 09-05

The Costs and Benefits of Bank Supervisory Disclosure

Edward S. Prescott and Stephen Slivinski


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


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


Edward S. Prescott
(804) 697-8206