We study the welfare implications of self-fulfilling bank runs and liquidity requirements, in a growth model where banks, facing persistent possible runs, can choose in any period a run-proof asset portfolio. In this framework, runs distort banks' insurance provision against idiosyncratic...

We report evidence that bank liquidity ratios (liquid assets as a percentage of total assets) decrease during the process of economic development. To reconcile this observation with the increasing importance of financial markets and the increasing direct participation of individual investors in...

How does the financial aid allocation mechanism affect student behavior? We provide a framework for quantifying the impact of financial aid on student debt, academic capital, and labor market outcomes. We specify and estimate a dynamic discrete choice model of simultaneous education, work, and...