Agricultural and Resource Economics
Hilscher, an associate professor in the Department of Agricultural and Resource Economics, conducts research in finance. Hilscher completed his Ph.D. in economics from Harvard and taught 10 years at Brandeis International Business School before joining the faculty at UC Davis in 2016.
Asset pricing; corporate financing; credit risk; inflation; sovereign debt; behavioral finance
My primary area of expertise is finance, specifically empirical asset pricing. My research investigates the risks of corporate and sovereign default, the need to design governance structures that mitigate risk, and the inefficiencies in financial markets. In the area of credit risk, I have examined accurate default prediction and demonstrated the empirical superiority of reduced form models compared to credit ratings and distance to default. I have also investigated whether or not investors are appropriately compensated for exposure to default risk.
Regarding corporate finance, I have investigated how default risk can be reduced by the introduction of contingent capital or governance structures. Another area of focus is behavioral finance, where I have examined the role of market frictions in explaining stock market anomalies as well as information flows between Credit Default Swap and stock markets. Recently, I have worked on quantifying the possibility of inflation eroding the value of U.S. government debt.
- How likely is it that the U.S. will erode the real value of its government debt through inflation?
- What is the optimal approach to regulate risk-taking activities of financial institutions?