To empirically study the policy impact of a National New Area on the local economy, this paper evaluates the effect of the Zhoushan Archipelago New Area on local GDP growth rate and economic efficiency. By collecting input and output data from 20 prefectural-level cities in Jiangsu, Zhejiang, and Anhui provinces from 1995 to 2015, we estimate the economic efficiency of these cities using data envelopment analysis. Subsequently, we construct counterfactuals for Zhoushan by selecting comparable cities from the dataset, excluding Zhoushan, and applying a panel data approach. The difference between the actual and counterfactual values for GDP growth rate and economic efficiency in Zhoushan is analyzed to determine the treatment effect of the National New Area policy. The research reveals that in the initial four years, the New Area policy enhanced Zhoushan's economic efficiency but negatively affected its GDP growth rate. This influence gradually disappeared after four years. Further analysis suggests that the policy's effect on GDP growth rate varies with the level of economic development in different regions, having a more substantial impact in less developed areas. Therefore, we conclude that establishing a New Area in relatively undeveloped zones is more advantageous.

Large Language Models (LLMs) have been shown to perform well for many downstream tasks. Transfer learning can enable LLMs to acquire skills that were not targeted during pre-training. In financial contexts, LLMs can sometimes beat well-established benchmarks. This paper investigates how well LLMs perform in the task of forecasting corporate credit ratings. We show that while LLMs are very good at encoding textual information, traditional methods are still very competitive when it comes to encoding numeric and multimodal data. For our task, current LLMs perform worse than a more traditional XGBoost architecture that combines fundamental and macroeconomic data with high-density text-based embedding features.

We propose a deep learning framework, DL-opt, designed to efficiently solve for optimal policies in quantifiable general equilibrium trade models. DL-opt integrates (i) a nested fixed point (NFXP) formulation of the optimization problem, (ii) automatic implicit differentiation to enhance gradient descent for solving unilateral optimal policies, and (iii) a best-response dynamics approach for finding Nash equilibria. Utilizing DL-opt, we solve for non-cooperative tariffs and industrial subsidies across 7 economies and 44 sectors, incorporating sectoral external economies of scale. Our quantitative analysis reveals significant sectoral heterogeneity in Nash policies: Nash industrial subsidies increase with scale elasticities, whereas Nash tariffs decrease with trade elasticities. Moreover, we show that global dual competition, involving both tariffs and industrial subsidies, results in lower tariffs and higher welfare outcomes compared to a global tariff war. These findings highlight the importance of considering sectoral heterogeneity and policy combinations in understanding global economic competition.

We investigate whether an LLM can successfully perform financial statement analysis in a way similar to a professional human analyst. We provide standardized and anonymous financial statements to GPT4 and instruct the model to analyze them to determine the direction of future earnings. Even without any narrative or industry-specific information, the LLM outperforms financial analysts in its ability to predict earnings changes. The LLM exhibits a relative advantage over human analysts in situations when the analysts tend to struggle. Furthermore, we find that the prediction accuracy of the LLM is on par with the performance of a narrowly trained state-of-the-art ML model. LLM prediction does not stem from its training memory. Instead, we find that the LLM generates useful narrative insights about a company's future performance. Lastly, our trading strategies based on GPT's predictions yield a higher Sharpe ratio and alphas than strategies based on other models. Taken together, our results suggest that LLMs may take a central role in decision-making.

Large language models (LLMs) and their fine-tuning techniques have demonstrated superior performance in various language understanding and generation tasks. This paper explores fine-tuning LLMs for stock return forecasting with financial newsflow. In quantitative investing, return forecasting is fundamental for subsequent tasks like stock picking, portfolio optimization, etc. We formulate the model to include text representation and forecasting modules. We propose to compare the encoder-only and decoder-only LLMs, considering they generate text representations in distinct ways. The impact of these different representations on forecasting performance remains an open question. Meanwhile, we compare two simple methods of integrating LLMs' token-level representations into the forecasting module. The experiments on real news and investment universes reveal that: (1) aggregated representations from LLMs' token-level embeddings generally produce return predictions that enhance the performance of long-only and long-short portfolios; (2) in the relatively large investment universe, the decoder LLMs-based prediction model leads to stronger portfolios, whereas in the small universes, there are no consistent winners. Among the three LLMs studied (DeBERTa, Mistral, Llama), Mistral performs more robustly across different universes; (3) return predictions derived from LLMs' text representations are a strong signal for portfolio construction, outperforming conventional sentiment scores.

Blockchain technology is essential for the digital economy and metaverse, supporting applications from decentralized finance to virtual assets. However, its potential is constrained by the "Blockchain Trilemma," which necessitates balancing decentralization, security, and scalability. This study evaluates and compares two leading proof-of-stake (PoS) systems, Algorand and Ethereum 2.0, against these critical metrics. Our research interprets existing indices to measure decentralization, evaluates scalability through transactional data, and assesses security by identifying potential vulnerabilities. Utilizing real-world data, we analyze each platform's strategies in a structured manner to understand their effectiveness in addressing trilemma challenges. The findings highlight each platform's strengths and propose general methodologies for evaluating key blockchain characteristics applicable to other systems. This research advances the understanding of blockchain technologies and their implications for the future digital economy. Data and code are available on GitHub as open source.

How does the presence of an AI assistant affect the collective attention of a team? We study 20 human teams of 3-4 individuals paired with one voice-only AI assistant during a challenging puzzle task. Teams are randomly assigned to an AI assistant with a human- or robotic-sounding voice that provides either helpful or misleading information about the task. Treating each individual AI interjection as a treatment intervention, we identify the causal effects of the AI on dynamic group processes involving language use. Our findings demonstrate that the AI significantly affects what teams discuss, how they discuss it, and the alignment of their mental models. Teams adopt AI-introduced language for both terms directly related to the task and for peripheral terms, even when they (a) recognize the unhelpful nature of the AI, (b) do not consider the AI a genuine team member, and (c) do not trust the AI. The process of language adaptation appears to be automatic, despite doubts about the AI's competence. The presence of an AI assistant significantly impacts team collective attention by modulating various aspects of shared cognition. This study contributes to human-AI teaming research by highlighting collective attention as a central mechanism through which AI systems in team settings influence team performance. Understanding this mechanism will help CSCW researchers design AI systems that enhance team collective intelligence by optimizing collective attention.

We present the first application of modern Hopfield networks to the problem of portfolio optimization. We performed an extensive study based on combinatorial purged cross-validation over several datasets and compared our results to both traditional and deep-learning-based methods for portfolio selection. Compared to state-of-the-art deep-learning methods such as Long-Short Term Memory networks and Transformers, we find that the proposed approach performs on par or better, while providing faster training times and better stability. Our results show that Modern Hopfield Networks represent a promising approach to portfolio optimization, allowing for an efficient, scalable, and robust solution for asset allocation, risk management, and dynamic rebalancing.

This paper solves a recursive optimal stopping problem with Poisson stopping constraints using the penalized backward stochastic differential equation (PBSDE) with jumps. Stopping in this problem is only allowed at Poisson random intervention times, and jumps play a significant role not only through the stopping times but also in the recursive objective functional and model coefficients. To solve the problem, we propose a decomposition method based on Jacod-Pham that allows us to separate the problem into a series of sub-problems between each pair of consecutive Poisson stopping times. To represent the value function of the recursive optimal stopping problem when the initial time falls between two consecutive Poisson stopping times and the generator is concave/convex, we leverage the comparison theorem of BSDEs with jumps. We then apply the representation result to American option pricing in a nonlinear market with Poisson stopping constraints.