Andrew B. Abel

About

Andrew B. Abel is the Ronald A. Rosenfeld Professor of Finance and Professor of Economics at the Wharton School, University of Pennsylvania. He holds a PhD from the Massachusetts Institute of Technology and an AB from Princeton University. His research interests encompass asset pricing, costly observations and transactions, macroeconomics, monetary economics, saving and investment, and social security. Abel has held academic positions at Harvard University and the University of Chicago, and has served as a visiting scholar at the Federal Reserve Bank of Philadelphia, among other institutions. His work includes significant contributions to understanding investment behavior, the effects of q and cash flow, optimal debt and profitability, and the role of growth options in firm valuation. Abel has been recognized with awards such as the Fellow of the Econometric Society and the John Kenneth Galbraith Award, and has been involved in various advisory and research roles related to economic modeling and policy.

Research topics

• Economics
• Mathematics
• Management
• Microeconomics
• Econometrics
• Statistics
• Mathematical optimization
• Biology
• Finance

Selected publications

• The effects of q and cash flow on investment in the presence of measurement error

  Journal of Financial Economics · 2018-02-21 · 36 citations

  article1st authorCorresponding
  PublisherDOI

• Precautionary Saving in a Financially Constrained Firm

  Review of Financial Studies · 2023-01-19 · 13 citations

  articleOpen access1st author

  Abstract For a firm that cannot raise external funds, cash on hand serves as precautionary saving. We derive a closed-form expression for the target level of cash on hand in the presence of persistent cash flows. Contrary to conventional wisdom, a mean-preserving increase in the volatility of cash flow can decrease this target. Over the set of admissible parameter values, the average impact of volatility on the target is zero. Endogenous selection, reflecting termination of firms that run out of…

  PublisherOA PDFDOI

• Optimal Management of a Pandemic in the Short Run and the Long Run

  2020 · 12 citations

  1st authorCorresponding

  Social policy to limit interactions can slow the spread of infection, but this benefit comes at the cost of reduced output. We solve an optimal control problem to choose the degree of interaction to maximize an objective function that rewards output and penalizes excess deaths. Optimal policy restricts the degree of interaction—permanently and perhaps substantially—but, surprisingly, not so much as to eradicate the disease. This finding holds regardless of how much weight the objective function…

• Running Primary Deficits Forever in a Dynamically Efficient Economy: Feasibility and Optimality

  National Bureau of Economic Research · 2022-10-01 · 11 citations

  report1st authorCorresponding

  Government debt can be rolled over forever without primary surpluses in some stochastic economies, including some economies that are dynamically efficient. In an overlapping-generations model with constant growth rate, g, of labor-augmenting productivity, and with shocks to the durability of capital, we show that along a balanced growth path, the maximum sustainable ratio of bonds to capital is attained when the risk-free interest rate, r[sub]f, equals g. Furthermore, this maximal ratio maximize…

  PublisherDOI

• Precautionary Saving in a Financially-Constrained Firm

  National Bureau of Economic Research · 2020-01-01 · 10 citations

  reportOpen access1st authorCorresponding

  For a firm that cannot raise external funds, cash on hand serves as precautionary saving. We derive a closed-form expression for the target level of cash on hand in the presence of persistent cash flows. Contrary to conventional wisdom, a mean-preserving increase in the volatility of cash flow can decrease this target. Over the set of admissible parameter values the average impact of volatility on the target is zero. Endogenous selection, reflecting termination of firms that run out of cash, lea…

  PublisherOA PDFDOI

Frequent coauthors

• Stavros Panageas

  35 shared

• Janice Eberly

  30 shared

• Olivier Blanchard

  Peterson Institute for International Economics

  14 shared

• Frederic S. Mishkin

  National Bureau of Economic Research

  8 shared

• Ben Bernanke

  6 shared

• Dean Croushore

  University of Richmond

  4 shared

• Robert S. Pindyck

  Massachusetts Institute of Technology

  4 shared

• William A. Barnett

  University of Kansas

  4 shared

Awards & honors

• Fellow, Econometric Society, 1991
• John Kenneth Galbraith Award, Harvard University, 1984
• Distinguished Fellow, Macro Finance Society, 1970

Similar researchers at University of Pennsylvania

• Raffi Amith-58
• Eric T Bradlowh-53
• Lawton R. Burnsh-48