Fire sales in finance and macroeconomics

A-Tier
Journal: The Review of Financial Studies
Year: 2021
Volume: 34
Issue: 3
Pages: 1509-1539

Authors (3)

Gabriel Chodorow-Reich (not in RePEc) Andra Ghent (University of North Carolina-C...) Valentin Haddad (not in RePEc)

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We construct a new data set tracking the daily value of life insurers’ assets at the security level. Outside of the 2008–2009 crisis, a1 drop in the market value of assets reduces an insurer’s market equity by0.10. During the ?nancial crisis, this pass-through rises to1. We explain this pattern by viewing insurance companies as asset insulators, institutions with stable, long-term liabilities that can ride out transitory dislocations in market prices. Illustrating the macroeconomic importance of insulation, insurers’ market equity declined by 50 billion less than the duration-adjusted value of their securities during the crisis.

Technical Details

RePEc Handle
repec:oup:rfinst:v:34:y:2021:i:3:p:1509-1539.
Journal Field
Finance
Author Count
3
Added to Database
2026-01-25