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Ariel Zetlin-Jones - Carnegie Mellon University. Pittsburgh, PA, US

Ariel Zetlin-Jones

Associate Professor | Carnegie Mellon University


Ariel Zetlin-Jones' research focuses on macroeconomics, business cycles, financial frictions and banking.


Ariel Zetlin-Jones' research focuses on macroeconomics, business cycles, financial frictions and banking. He examines what makes financial markets work and how to design optimal regulations for financial markets and institutions.

Areas of Expertise (5)


Business Cycles


Financial Frictions


Media Appearances (5)

Leaked documents that Sam Bankman-Fried used to fundraise in 2021 and 2022 show why VCs may have ignored due diligence and scrambled to invest nearly $2 billion

Fortune  online


“The exchange lent billions, including most of its FTT pile, to its sister firm Alameda for trading capital at first, and eventually to cover massive losses,” said Cory Klippsten, founder and CEO of Swan Bitcoin, a financial services company. “It seems like FTX lent customer deposits to Alameda Research using FTT tokens as collateral. So when public perception of the value of the tokens collapsed, the value of the loan and collateral also collapsed,” added Ariel Zetlin-Jones, economist at Tepper School of Business at Carnegie Mellon University.

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FTX made a cryptocurrency that brought in millions. Then it brought down the company

NPR  online


The FTX Token was part of an elaborate, rewards-based marketing scheme to attract buyers. "I think of it like airline miles," says Ariel Zetlin-Jones, who teaches economics at Carnegie Mellon University. "Like loyalty points for using the exchange."

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Cryptocurrency mining under proposed US policy changes

Coin Telegraph  online


The regulatory scrutiny of blockchains and cryptocurrencies is increasing. From the cryptocurrency mining ban in China to President Joe Biden’s Working Group on Financial Markets, convened by Treasury Secretary Janet Yellen, the economic activities that support and are enabled by blockchains have become a significant concern for policymakers. Most recently, a provision in the proposed 2021 infrastructure bill amends the definition of a broker to expressly include “any person who [...] is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”

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The financialization of cryptocurrencies

IBM Supply Chain and Blockchain Blog  online


What does it mean to “own a Bitcoin?” It means there is a recorded transaction on the Bitcoin blockchain where someone sent one bitcoin to your public key address and that you (and you alone) know the address’s private key. Even if that terse description explains things, it does not help with the logistic details of how you go about doing this. It is complicated. But it is also complicated to physically buy and hold a bar of gold or a barrel of oil. Google it. You could make it happen, but it is work.

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What is a corporate blockchain?

IBM Supply Chain and Blockchain Blog  online


We have this image in our head of an overworked Chief Technology Officer summoned to the boss’s office and told to produce a corporate blockchain but without all that dodgy cryptocurrency. We imagine this CTO is puzzled. We certainly are. What is a corporate blockchain?

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Ariel Zetlin Jones: Do Consumers Benefit From More Competition in Financial Markets? Financial Crises and Risk Undergraduate Economics Course with Ariel Zetlin Jones Tepper Blockchain Initiative


Industry Expertise (2)

Financial Services


Accomplishments (2)

BP Junior Faculty Chair, Tepper School of Business (professional)


Richard M. Cyert Award for Excellence in Teaching, Carnegie Mellon University, Tepper School of Business (professional)


Education (3)

University of Minnesota:: Ph.D., Economics 2012

University of Minnesota: M.A., Economics 2011

Williams College: B.A., Political Economy and Mathematics 2004

Articles (5)

Market-making with search and information frictions

Journal of Economic Theory

2023 We develop a dynamic model of trading through market-makers that incorporates two canonical sources of illiquidity: trading (or search) frictions, which imply that investors can rebalance their portfolio only with a delay; and information frictions, which imply that market-makers face some degree of adverse selection. We use this model to study the effects of various technological innovations and regulatory initiatives that have reduced trading frictions in over-the-counter markets. Our main result is that reducing trading frictions can lead to less liquidity, as measured by bid-ask spreads.

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Moral Hazard in Remote Teams

International Economic Review

2022 We reexamine the ability of teams to credibly self‐impose group punishments and prevent free riding when individual inputs are unobservable. We formulate self‐imposed group punishments as performance underreporting by the team. Although underreporting is not credible in a static game, we show that simple strategies can sustain underreporting in a repeated game, and that the threat of underreporting improves welfare only if team members' preferences between shirking and team output consumption are nonseparable. Our results suggest that self‐assessments can replace increased managerial monitoring in remote work environments.

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Currency stability using blockchain technology

Journal of Economic Dynamics and Control

2022 To date, cryptocurrency prices are volatile and many cryptocurrency developers have adopted ad hoc approaches to stabilize their cryptocurrency price. When these currencies are not 100% backed by other valued assets, part of their price volatility may arise from self-fulfilling expectations of a speculative attack (as in Obstfeld (1996)). We show that an exchange rate policy, which is less than 100% backed and dynamically adjusts in response to traders’ conversion demand eliminates speculative attacks while, under some conditions, preserving much of the desired exchange rate stability. This dynamic exchange rate policy admits a great deal of discretion to and requires commitment by the party implementing the policy.

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The ethics of contentious hard forks in blockchain networks with fixed features

Frontiers in Blockchain

2019 An advantage of blockchain protocols is that a decentralized community of users may each update and maintain a public ledger without the need for a trusted third party. Such modifications introduce important economic and ethical considerations that we believe have not been considered among the community of blockchain developers. We clarify the problem and provide one implementable ethical framework that such developers could use to determine which aspects should be immutable and which should not.

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Screening and adverse selection in frictional markets

Journal of Political Economy

2019 We incorporate a search-theoretic model of imperfect competition into a standard model of asymmetric information with unrestricted contracts. We characterize the unique equilibrium and use our characterization to explore the interaction between adverse selection, screening, and imperfect competition. We show that the relationship between an agent’s type, the quantity he trades, and the price he pays is jointly determined by the severity of adverse selection and the concentration of market power. Therefore, quantifying the effects of adverse selection requires controlling for market structure. We also show that increasing competition and reducing informational asymmetries can decrease welfare.

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