Paper accepted for publication

Congratulations to our VGSF Program Director Alexander Mürmann, Maria Chaderina, and VGSF alumnus Christoph Scheuch on their paper acceptance in Management Science (WU Star Journal)!

The paper titled „The Dark Side of Liquid Bonds in Fire Sales“ shows that when investors must raise cash quickly, selling the most liquid and widely held bonds—though individually optimal—can trigger the largest price drops because many investors rush to sell the same assets at once. This crowding effect makes liquid-bond fire sales collectively inefficient and amplifies systemic risk. Evidence from insurers around natural catastrophes confirms that they sell liquid bonds first and that these bonds suffer the steepest price declines, highlighting the regulatory importance of overlapping liquid holdings.

Paper: The Dark Side of Liquid Bonds in Fire Sales

Authors: Maria Chaderina (University of Oregon), Alexander Mürmann (WU), Christoph Scheuch (Humboldt University of Berlin)