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Devastating economic consequences of businesses without remote work
The study offers U.S. policymakers a blueprint for a future round of COVID-19 stimulus.
Faculty
Lawrence D. W. Schmidt is the Victor J. Menezes (1972) Career Development Professor of Finance. His research is at the intersection of finance and macroeconomics.
Schmidt's research combines theory and applied econometric approaches to offer a richer picture of risks faced by financial market participants—households, institutional investors, and financial intermediaries—and sheds new light on underlying economic mechanisms linking financial markets with the real economy. His research is particularly interested in understanding factors which are associated with the risk and return to investments in human capital (that is, the present discounted value of labor income), and how frictions that limit risk-sharing in the labor market affect asset prices and macroeconomic dynamics. In addition to studying the risk factors and behavior of households, his work also studied the behavior of institutional investors during financial crises. His research has appeared in the American Economic Review, the Journal of Applied Econometrics, and the Journal of Mathematical Economics, and his research has won multiple awards, including the 2015 AQR Top Finance Graduate Award.
Schmidt holds a BA from the University of California, Santa Barbara, and PhD and MA degrees in Economics from the University of California, San Diego. Prior to joining the faculty at MIT Sloan, Schmidt was an Assistant Professor in the Kenneth C. Griffin Department of Economics at the University of Chicago and a senior consultant at Navigant Consulting, Inc.
Current Research Focus: Schmidt’s research seeks to offer a richer picture of risks faced by financial market participants and to shed new light on economic mechanisms linking financial markets with the real economy. Two recent areas of interest are (1) understanding factors associated with the risk and return to investments in human capital, particularly how frictions that limit risk sharing in labor and capital markets affect asset prices and macroeconomic dynamics, and (2) understanding investment behavior of institutional investors in delegated asset management settings.
Schmidt, Lawrence D. W., MIT Sloan Working Paper 5500-16. Cambridge, MA: MIT Sloan School of Management, March 2016.
Schmidt, Lawrence D. W., Allan Timmermann, and Russ Wermers. American Economic Review Vol. 106, No. 9 (2016): 2625-2657. Author Disclosures. Appendix. Data Set.
Papanikolaou, Dimitris and Lawrence D.W. Schmidt, MIT Sloan Working Paper 6115-20. Cambridge, MA: MIT Sloan School of Management, May 2020.
Gallagher, Emily A. Lawrence D W Schmidt, Allan Timmermann, Russ Wermers. The Review of Financial Studies Vol. 33, No. 4 (2020): 1445-1483.
Byun, Sung Je and Lawrence D.W. Schmidt, MIT Sloan Working Paper 5712-19. Cambridge, MA: MIT Sloan School of Management, 2019.
Akepanidtaworn, Klakow, Rick Di Mascio, Alex Imas, and Lawrence D.W. Schmidt, MIT Sloan Working Paper 5713-18. Cambridge, MA: MIT Sloan School of Management, September 2019.
The study offers U.S. policymakers a blueprint for a future round of COVID-19 stimulus.
New research shows those who can’t work from home bear the brunt of the pandemic’s economic fallout — particularly women with children.
Source: WCVB-TV (Video)
"...the Paycheck Protection Program had a bit of a design flaw. The hardest-hit sectors actually tended to receive the least amount of aid."
Source: The Wall Street Journal
"...tying financing to payroll expenses had the [likely unintended] consequences of allocating more federal funds to the least affected sector.”
Source: Marketplace | Morning Report
[Prof.] Schmidt found the biggest loans went to the professional and technical services sector — lots of remote workers, fewer jobs lost.
Source: Chicago Booth Review