This paper evaluates the influence of central bank's projections and narrative signals provided in the summaries of its Inflation Report on the expectations of professional forecasters for inflation and GDP growth in the case of Mexico. We use the Latent Dirichlet Allocation model, a textmining...

We study the relationship between financial constraints and employment formalization by exploiting heterogeneity in the industry-level degree of financial dependence, in the spirit of Rajan and Zingales (1998). This dependence, and variation in aggregate credit, lets us measure industry-level...

We study the impact of labor market frictions on asset prices. In the cross section of U.S. firms, a 10 percentage points increase in the firm's hiring rate is associated with a 1.5 percentage points decrease in the firm's annual risk premium. We propose an investment-based model with stochastic...

This paper shows documents the fact that high growth firms maintain low debt levels. It then shows a dynamic model of financing and investment with costs of equity issuance rationalizes these findings. In the model firms keep debt at a level that lets them finance their investment purely from...

Firms producing differentiated products have high margins and therefore low risk. As a result firms invest more into developing differentiated products when they perceive risk is high. Higher risk also implies higher product skewness towards more differentiated products and therefore higher...