We study the cyclical implications of endogenous firm-level entry and exit decisions in a dynamic, stochastic general equilibrium model wherein firms face persistent shocks to both aggregate and individual productivity. The model we explore is in the spirit of Hopenhayn (1992). Firms' decisions...

We use a unique detailed database with individual state campaign contributions made by banks in U.S. from 1998 to 2010 to understand how these contributions influence the regulation of the banking industry in that state, and in particular the approval of bank mergers by the state banking...

There are two facts about the world that we take as given: First the "law of one price" is false -- one can find many different prices for what appears to be, beyond reasonable doubt, the same good. Second, prices are set in nominal terms and appear, beyond reasonable doubt, to be sticky -- some...

This paper studies the link between banking crises, sovereign default and government guarantees. A banking crisis can lead to a domestic credit crunch, which can be mitigated by government guarantees. However, the provision of bailout guaran- tees exposes the government to potentially severe...

We present a signalling theory of quantitative easing in which open market operations that change the duration of outstanding nominal government debt affect the incentives of the central bank in determining the real interest rate. In a time consistent (Markov-perfect) equilibrium of a...

In the wake of the 2008 housing bust, Single Family Rental (SFR) strategies have become popular investment vehicles for private equity funds and hedge funds. Industry estimates place the number of homes purchased by SFR investors from 2011-2013 at over 350,000, which is about 10% of all...

This paper studies optimal policy in models with multidimensional uncertainty and endogenous observables. We first consider a very general setup where the policy-maker does not observe the realisations of the shocks that hit the economy, but only some aggregate variables that are endogenous with...

We propose a model of coordination failures for business cycles in which agents learn to coordinate over time. The economy features an aggregate demand externality that leads to multiple equilibria under complete information. Under incomplete information, a group of informed agents receive...

Using a comprehensive panel dataset on U.S. households, we study the effects of the 2005 bankruptcy reform on bankruptcy, delinquency and debt accumulation. We find that the reform coincided with a 23% permanent drop in the bankruptcy rate relative to pre-reform level. We further document that...

We provide a theory of the determination of exchange rates based on capital flows in imperfect financial markets. Capital flows drive exchange rates by altering the balance sheets of financiers that bear the risks resulting from international imbalances in the demand for financial assets. Such...