PhD Student Michael Weber Receives Top Finance Graduate Award

Michael Weber, PhD 14, has been recognized with a Top Finance Graduate Award by the Copenhagen Business School, becoming the first Haas PhD student to receive this honor.

The award recognizes the graduate whose dissertation and broader research potential carry the greatest promise of making an impact on the finance practice and academia. The selection committee is composed of six of the most influential finance scholars worldwide. Weber was among six students selected to receive the award in 2014; another Berkeley student, Victoria Vanasco, from the Department of Economics, also received the award this year; her advisers include Haas professors William Fuchs and Christine Parlour.

Weber was recognized for his dissertation “Nominal Rigidities and Asset Pricing,” which he will present to the selection committee In June at the Copenhagen Business School.

A native of Heidelberg, Germany, Weber is starting a position as an Assistant Professor of Finance at the University of Chicago Booth School of Business in July. He says that his nervousness passed after the first five minutes of the University of Chicago interview and he began to enjoy the questions from his future colleagues.

“The tough yet transparent attitude of the Chicago finance group fits my attitude toward research very well,” he says. In Chicago Weber will teach MBA students their core finance class in Investments.

In his dissertation, Weber shows that the inability of firms to adjust their product prices to economic shocks exposes firms to higher systematic risk. Being riskier implies these firms earn a return premium. His favorite example of price rigidities is the Wall Street Journal, which charged a constant nominal cover price of 5 cents during the Roaring Twenties, the Great Depression, and World War II despite large swings in macroeconomic fundamentals.

The importance of price rigidities has been long recognized in macroeconomics and is actually considered the leading explanation why the Federal Reserve can stimulate the real economy with purely nominal monetary policy. But finance as a field has largely ignored rigid prices, mainly due to data restrictions.

Weber’s research interests span the fields of asset pricing, macroeconomics, international finance, and household finance. Working papers he co-authored include “Antisemitism Affects Households’ Investments,” “Are Sticky Prices Costly? Evidence from the Stock Market,” and “The Term Structure of Equity Returns: Risk or Mispricing?” Another paper, “Conditional Risk Premia in Currency Markets and Other Classes,” co-authored with Haas Professor Martin Lettau, was awarded the prestigious AQR Insight Award in 2013 and is now forthcoming in the Journal of Financial Economics.