WORKING PAPERS
'Optimal Taxation of Risky Entrepreneurial Capital', with Corina Boar. (abstract) (slides) (pdf)
'The Revelation Incentive for Issue Engagement in Campaigns', with Chitralekha Basu. (abstract) (pdf)
'Capital Deaccumulation and the Large Persistent Effects of Financial Crises.' (abstract) (slides) (pdf)
'The Nash Wage Elasticity and Its Business Cycle Implications', with Mario Lupoli. (abstract) (available on request)
WORKS IN PROGRESS
'Quantifying the Macroeconomic Impact of Credit Expansions', with Corina Boar, Kjetil Storesletten and Yicheng Wang. (abstract)
This project explores, both theoretically and empirically, what are the effects of credit market conditions on the real economy. The literature has emphasized many different channels though which changes in credit conditions affect economy activity, and there is a debate about their relative importance. The goal of our paper is to discriminate between these channels, by using a quasi-natural experiment and a quantitative model. Empirically, we exploit the deregulation of the US banking sector in the 1980s, which we interpret as an improvement in credit market conditions. We find this lowers the interest rate on loans, increases lending to households and businesses, boosts employment, output, wages and labor productivity, stimulates firm entry and job creation. Motivated by these findings, we seek to understand what is the mechanism through which better credit affects economic activity. To that end, we build a quantitative, Heterogenous-Firm-New-Keynesian model with endogenous entry and exits, and credit market frictions can affect the real economy through several channels. First, better credit market conditions stimulate aggregate consumption demand and consequently, the real economy. Second, more favorable credit market conditions affect the production sector by (i) increasing capital investment and (ii) stimulating new firms' entry. To parameterize the model, we leverage the bank deregulation quasi-natural experiment and use the identified moments in the data as targets in the estimation. We use the model to discriminate between the relative importance of the aforementioned channels.
'Optimal Taxation of Risky Entrepreneurial Capital', with Corina Boar. (abstract) (slides) (pdf)
'The Revelation Incentive for Issue Engagement in Campaigns', with Chitralekha Basu. (abstract) (pdf)
'Capital Deaccumulation and the Large Persistent Effects of Financial Crises.' (abstract) (slides) (pdf)
'The Nash Wage Elasticity and Its Business Cycle Implications', with Mario Lupoli. (abstract) (available on request)
WORKS IN PROGRESS
'Quantifying the Macroeconomic Impact of Credit Expansions', with Corina Boar, Kjetil Storesletten and Yicheng Wang. (abstract)
This project explores, both theoretically and empirically, what are the effects of credit market conditions on the real economy. The literature has emphasized many different channels though which changes in credit conditions affect economy activity, and there is a debate about their relative importance. The goal of our paper is to discriminate between these channels, by using a quasi-natural experiment and a quantitative model. Empirically, we exploit the deregulation of the US banking sector in the 1980s, which we interpret as an improvement in credit market conditions. We find this lowers the interest rate on loans, increases lending to households and businesses, boosts employment, output, wages and labor productivity, stimulates firm entry and job creation. Motivated by these findings, we seek to understand what is the mechanism through which better credit affects economic activity. To that end, we build a quantitative, Heterogenous-Firm-New-Keynesian model with endogenous entry and exits, and credit market frictions can affect the real economy through several channels. First, better credit market conditions stimulate aggregate consumption demand and consequently, the real economy. Second, more favorable credit market conditions affect the production sector by (i) increasing capital investment and (ii) stimulating new firms' entry. To parameterize the model, we leverage the bank deregulation quasi-natural experiment and use the identified moments in the data as targets in the estimation. We use the model to discriminate between the relative importance of the aforementioned channels.
