The Personal Wealth Interests of Politicians and the Stabilization of Financial Markets

Ahmed Tahoun () and Laurence van Lent ()
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Ahmed Tahoun: London Business School
Laurence van Lent: Tilburg University

No 52, Working Papers Series from Institute for New Economic Thinking

Abstract: We examine whether personal wealth interests affect politicians’ decisions about stabilizing financial markets. We use the setting of the government’s support of financial institutions under the 2008 Emergency Economic Stabilization Act. We find that the personal wealth interests of politicians are positively associated with voting in favor of the EESA. We implement several analyses to show that personal wealth interests rather than unobservable beliefs in the financial sector explain our result.

Keywords: Emergency Economic Stabilization Act; US Congress members; Financial Institutions (search for similar items in EconPapers)
JEL-codes: D02 D71 D72 G14 G28 G38 P16 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2016-10
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Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:52

DOI: 10.2139/ssrn.2877983

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