Financial-Markets

Noah Williams

Layer 1: Overview Research question and motivation: Williams asks whether the recurrent boom-bust dynamics of Minsky’s financial instability hypothesis — “periods of stability lead to …

Simon Johnson · Lukasz Rachel · Catherine Wolfram

Layer 1: Overview This paper asks what the optimal response of an exhaustible-resource producer is to sanctions in the form of a price cap, and how a sanctioning coalition should set the cap. The …

Fan Liang

Layer 1: Overview This paper asks why small firms hold large quantities of liquid assets — cash and cash equivalents that earn low or negative real returns — even when external credit is available. …

Andrew Y. Chen · Francisco Palomino

Layer 1: Overview Chen and Palomino prove a general irrelevance theorem identifying when risk aversion and time-varying risk are irrelevant for key model dynamics in representative-agent macroeconomic …

Ana Fostel · John Geanakoplos · Gregory Phelan

Layer 1: Overview The paper asks why large gross financial flows exist between similarly rich countries (especially the U.S. and Europe), why financial integration raises rather than lowers asset …

Mitali Das · Gita Gopinath · Helene Hall · Taehoon Kim · Jeremy C. Stein

Layer 1: Overview This paper investigates why non-U.S. central banks accumulate large holdings of dollar-denominated foreign exchange reserves, focusing on a previously under-emphasized motive: the …

Katharina Bergant · Prachi Mishra · Raghuram Rajan · Freddy Pinzon-Puerto

Layer 1: Overview This paper examines how unexpected changes in U.S. monetary policy transmit to cross-border merger and acquisition (M&A) activity globally, covering both the volume of deals and …

Alessandro Ferrari · Francisco Queirós

Layer 1: Overview Ferrari and Queirós ask why US recoveries have become progressively slower and argue that rising firm heterogeneity and market power — well-documented long-run trends — can …

Carlo Altavilla · Giacomo Carboni · Michele Lenza · Harald Uhlig

Layer 1: Overview This paper asks whether uncertainty in the interbank market — distinct from general macroeconomic uncertainty — raises the cost of bank credit to firms, and whether bank-specific …

Andrea Ferrero · Maurizio Michael Habib · Livio Stracca · Fabrizio Venditti

Layer 1: Overview This paper investigates how institutional quality shapes (i) the domestic financial and macroeconomic impact of Global Financial Cycle (GFC) shocks on emerging market economies …

Jianjun Miao · Zhouxiang Shen · Dongling Su

Layer 1: Overview This paper asks how bank holdings of long-term government securities interact with interest-rate-driven monetary tightening to amplify macroeconomic downturns and generate banking …

Giovanni Cespa · Xavier Vives

Layer 1: Overview Research question and motivation: The paper asks why market liquidity sometimes behaves in a stabilizing way (an illiquidity hike curbs liquidity demand and attracts liquidity …

Salomon Garcia-Villegas

Layer 1: Overview This paper develops a quantitative general equilibrium model of the U.S. housing finance system that jointly determines mortgage credit and mortgage-backed security (MBS) issuance, …

Andrés Fernández · Daniel Guzman · Ruy Lama · Carlos Végh

Layer 1: Overview Developing and emerging economies exhibit procyclical fiscal policy on both the spending and taxation sides: government expenditures expand in booms and contract in recessions, and …

Esther Ann Bøler · Andreas Moxnes · Karen Helene Ulltveit-Moe

Layer 1: Overview Firms that invest heavily in intangible assets — patents, R&D, software — face a structural financing disadvantage: intangibles offer limited collateral value to banks, so …

Corina Boar · Denis Gorea · Virgiliu Midrigan

Layer 1: Overview Research question and motivation. A large literature argues that credit constraints are the dominant financial friction holding private businesses below their optimal scale, so that …

Eunkyung Lee

Layer 1: Overview Research question and motivation. This paper asks how monetary policy transmits to corporate investment through bank credit, and specifically whether the relevant credit margin is …

Donggyu Lee

Layer 1: Overview This paper asks whether the Federal Reserve’s unconventional monetary policies (UMP) — specifically quantitative easing (QE) and forward guidance — exacerbated income and …

Jung Sakong

Layer 1: Overview Research question and motivation: Wealth in the US is far more concentrated than income, even among the bottom 99%. In 2013, the next-49% (above the bottom 50%) earned 4.7 times the …

Unknown

Layer 1: Overview Research question and motivation: Can banks effectively monitor their peers under asymmetric information? Effective peer monitoring matters for functioning interbank markets and, by …

Christiaan van der Kwaak · Sweder van Wijnbergen

Layer 1: Overview Research question and motivation: Does fiscal stimulus still work when it is financed through a banking system that is undercapitalized and holds large quantities of risky domestic …

RYUICHIRO IZUMI · YANG LI

Layer 1: Overview Research question and motivation: Asset fire sales were a defining feature of the 2007-08 crisis, and post-crisis reforms (Basel III liquidity requirements, Money Market Mutual Fund …

Hiona Balfoussia · Harris Dellas · Dimitris Papageorgiou

Layer 1: Overview This paper studies a transmission channel from sovereign fiscal weakness to banking performance that the literature has largely overlooked: government-provided deposit insurance, …

Luís A.V. Catão · Jan Ditzen · Daniel Marcel Te Kaat

Layer 1: Overview Research question and motivation: The paper asks how far global factors drive the foreign-borrowing component of advanced-economy banks’ non-core funding, and whether exchange …

Daan Opschoor · Dick van Dijk · Philip Hans Franses

Layer 1: Overview Research question and motivation. Since the Great Recession, quantifying downside risks to economic activity (rather than only expected outcomes) has become central for policymakers …

Antoine L. Noël · Hongfei Sun

Layer 1: Overview Noël and Sun build an information-based theory of capital structure designed to explain the diversity of observed firm financing behavior and the coexistence of distinct optimal …

CHARLES M. KAHN · DAVID MARSHALL · ROBERT L. MCDONALD

Layer 1: Overview This paper develops a theoretical model to explain why financial markets can suffer self-fulfilling liquidity crises and how a central bank acting as a “market-maker of last …

CECILIA DASSATTI · RODRIGO LLUBERAS · FRANCESC RODRIGUEZ-TOUS

Layer 1: Overview Research question and motivation. Banks reluctant to recognize losses on troubled borrowers engage in “loan evergreening”—rolling over or extending credit to delay loss …

Álvaro Fernández-Gallardo · Iván Payá

Layer 1: Overview Research question and motivation. There is now broad consensus that monetary authorities should hold a financial-stability mandate and that macroprudential policy should be part of …

RODRIGO BARBONE GONZALEZ · JOÃO BARATA RIBEIRO BLANCO BARROSO · BERNARDUS FERDINANDUS NAZAR VAN DOORNIK

Layer 1: Overview Research question and motivation: Reserve requirements (RRs) were largely abandoned as a monetary tool in advanced economies after inflation targeting, but emerging markets (EMs) — …

Matthias Gnewuch · Donghai Zhang

Layer 1: Overview Research question and motivation. Investment is a sizable and the most volatile component of aggregate GDP, so understanding the investment channel of monetary policy matters for …

Michael Smolyansky · Gustavo Suarez

Layer 1: Overview When the Federal Reserve unexpectedly tightens policy, do riskier assets fall relative to safer ones (the standard prediction), or do investors read tightening as a signal that …

Christoph Hambel · Frederick van der Ploeg

Layer 1: Overview Research question and motivation: Central bankers, regulators, and investors increasingly worry about climate “transition risks” — abrupt shifts in climate policy, green …

THORSTEN BECK · PETER BEDNAREK · DANIEL TE KAAT · NATALJA VON WESTERNHAGEN

Layer 1: Overview Research question and motivation. The paper asks how exchange rate movements affect the real economy and what role the banking system’s foreign-asset exposure plays in …

Unknown

Layer 1: Overview Research question and motivation: How does country-specific uncertainty explain variation in the cross-border funding of banks? Studying this link is practically relevant given …

Pasqualina Arca · Gianfranco Atzeni · Luca G. Deidda

Layer 1: Overview Research question and motivation: Under U.S. Chapter 7 bankruptcy, an individual entrepreneur has most unsecured debt discharged and only her non-exempt assets liquidated, producing …

Masami Imai · Michiru Sawada

Layer 1: Overview Research question and motivation: Why do financial crises leave such deep and protracted economic wounds, with crisis-stricken economies failing to revert to pre-crisis growth trends …

Carlo Altavilla · Refet S. Gürkaynak · Rogier Quaedvlieg

Layer 1: Overview This paper establishes basic facts about the external finance premium (EFP) faced by euro area firms borrowing from banks, and studies how monetary policy is transmitted to it. The …

Ricardo Duque Gabriel

Layer 1: Overview Research question and motivation. Public procurement accounts for roughly one-third of government spending (12.6% of GDP and 30% of total government expenditures in OECD countries in …

Marius Clemens · Stefan Gebauer · Tobias König

Layer 1: Overview Research question and motivation: The first two pillars of the European Banking Union (single supervision and single resolution) are in place, but the third pillar — a European …