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Chester Spatt - Carnegie Mellon University. Pittsburgh, PA, US

Chester Spatt

Professor | Carnegie Mellon University


Chester Spatt has been a leader in financial economics for more than four decades.


A pioneer in financial regulation research, Chester Spatt has been a leader in financial economics for more than four decades. His research has spanned across most of the financial economics discipline to include securities and financial regulations (SEC and Fed), equity and fixed-income market design and trading, mortgages and real estate, taxes and investing, and inflation. He is a research associate of the National Bureau of Economic Research and he previously served as chief economist for the U.S. Securities and Exchange Commission.

Areas of Expertise (5)

Banking, Finance and Investment


Economic Theory

Applied Economics


Media Appearances (5)

Do meme stocks help the companies they highlight?

Marketplace  online


A company can capitalize on becoming a meme stock if its stock price stays up for long enough — mainly by issuing new stock, said Chester Spatt at Carnegie Mellon University.

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Twitter shares are still below Musk’s offer price for the company. Should you buy it cheaper now and make a tidy profit? Proceed with caution, experts say.

MarketWatch  online


The timelines for sewing up major acquisitions can vary quite significantly, said Chester Spatt, a professor at Carnegie Mellon University’s Tepper School of Business teaching financial regulation.

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Biden Proposed Stock Buyback Restrictions. What Advisors Need to Know.

Barron's  online


“I think the economic costs of the proposal would be considerable and the likely revenue limited because of the types of changes in behavior,” said Chester Spatt, a professor of finance at Carnegie Mellon University’s Tepper School of Business. “Companies may become reluctant to raise capital because of complications in returning it to shareholders, make inefficient investment choices that hurt our economy and discourage incentive compensation to executives.”

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Inflation Is Everywhere, Including Places You Might Not Expect

The Wall Street Journal  online


“It kind of cascades from initially a small set of goods to a much larger set of goods,” said Chester Spatt, who was chief economist at the Securities and Exchange Commission from 2004 to 2007 and is now a professor of finance at Carnegie Mellon University.

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American Airlines set to issue new stock after price run-up

AP News  online


Chester Spatt, a finance professor at Carnegie Mellon, said American should tell potential investors that its price may be inflated by current market turmoil, but also said that it was “natural” for the company to make an offering. “If a company feels that its stock price is elevated, it’s reasonable for a company to issue securities,” Spatt said.

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Chester Spatt, Finance Regulation Pioneer: Research Retrospective UWFC 2023 Paper 7 Discussion



Industry Expertise (1)

Financial Services

Education (3)

University of Pennsylvania: Ph.D., Economics 1979

University of Pennsylvania: M.A., Economics 1976

Princeton University: B.A., Economics 1975

Articles (5)

Big data in finance

The Review of Financial Studies

2021 Big data is revolutionizing the finance industry and has the potential to significantly shape future research in finance. This special issue contains papers following the 2019 NBER-RFS Conference on Big Data. In this introduction to the special issue, we define the “big data” phenomenon as a combination of three features: large size, high dimension, and complex structure. Using the papers in the special issue, we discuss how new research builds on these features to push the frontier on fundamental questions across areas in finance—including corporate finance, market microstructure, and asset pricing. Finally, we offer some thoughts for future research directions.

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Proxy advisory firms, governance, market failure, and regulation

The Review of Corporate Finance Studies

2021 Proxy advisory firms developed due to market failures underlying voting and corporate governance more broadly. However, these firms, which have not been subject to mandatory regulation, reflect their own market failures, emphasizing challenges underlying corporate governance. We highlight underlying frictions, such as economies of scale and public goods aspects to information production, the import of incentive conflicts faced by the advisory firms, their power, and the implications of their recommendations and votes by different types of investors. Asset managers emphasizing stewardship are more supportive of management than are proxy advisors. We highlight the evolving regulatory environment and limitations of one-size-fits-all recommendations.

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A tale of two crises: The 2008 mortgage meltdown and the 2020 COVID-19 crisis

The Review of Asset Pricing Studies

2020 The causes and consequences of the 2008 mortgage meltdown and 2020 COVID-19 crisis are quite different: the 2008 mortgage meltdown reflected infection of the financial system due to excess leverage and poor-quality mortgage loans, and the recent crisis reflects a substantial global economic shock to contain the viral outbreak of the coronavirus. Yet the financial and medical systems share many elements, such as opacity and interconnectedness as well as adequate buffers and reserves. We examine these themes as well as asset pricing, moral hazard (though it was at the root of the crisis only in the Great Recession), the consequences for government as a systemic actor, economic concentration, and capital market regulation in the two crises. In both crises, interventions in financial markets and disruptions in the housing market played important, but differing, roles.

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Conflicts of interest in asset management and advising

Annual Review of Financial Economics

2020 This review addresses, from a unified perspective, the important role of conflicts of interest in various facets of asset management and advising, including managing individual portfolios, institutional asset management, and order routing. I use an agency framework to highlight the sources of the underlying incentive conflicts, the nature of efficient solutions, the role of the structure of compensation in mitigating (or creating) the agency problem, and the use of benchmarks as a solution. I also highlight several contemporary contexts in which conflicts of interest are important.

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A survey of the microstructure of fixed-income markets

Journal of Financial and Quantitative Analysis

2020 In this article, we survey the literature that studies fixed-income trading rules and outcomes, including Treasury securities, corporate and municipal bonds, and structured credit products. We compare and contrast the microstructure and regulation of fixed-income markets with equity markets. We highlight the nature of over-the-counter trading in the face of search costs and the associated slow evolution of electronically facilitated intermediation. We discuss the databases available to study fixed-income microstructure, as well as measures and determinants of trading costs, and the important roles dealer networks and limited transparency play. We also highlight unresolved issues.

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