We find a significant increase in sensitivities of firm-level investment to monetary policy changes after interstate banking deregulation (IBD) in the U.S. The sensitivities are on average 2% more negative in the years following IBD compared to prior. The intensification of monetary policy...

In this study, U.S. manufacturing firms' profitability measures including profit margins and returns on equity are examined over the 1971-2005 period. We find strong support for the “insulation hypothesis” as our results show that the profitability ratios and the valuation multiples of U.S....

From January 2011 through March 2018, the Bank of Japan purchased equity index ETFs worth about 3.5% of GDP. Identification of the effect of central bank ETF purchases on stock valuations and corporate responses is via differently-weighted and changing stock indices. BOJ purchases lift...

We study how financial heterogeneity determines firm-level investment responses to monetary policy shocks. In Compustat, a significant amount of firms hold almost zero debt, and among the firms who hold debt, both the amount and the maturity of debt vary greatly. We refer to these financial...

In this study, U.S. manufacturing firms' short-term financial management measures including net working capital, inventory turnover and receivables turnover are examined over the 1971-2005 period. The impacts of firm size, profitability, tangibility, market-to-book ratio, leverage, as well as...

This paper assesses the differences in how nonfinancial firms respond to high frequency identified monetary policy shocks conditional on various measures of their financial conditions. In line with the effects of monetary policy shocks on real aggregate activity, the most significant disparities...

We show that firms' nominal required returns to capital (i.e., their discount rates) are sticky with respect to expected inflation. Such nominally sticky discount rates imply that increases in expected inflation directly lower firms' real discount rates and thereby raise real investment. We...

The Freedman's Savings Bank (1865-1874) was Congressionally-approved to meet the credit needs for the emerging African American community. Preceding and then after Freedman, the post-bellum financial infrastructure was built reflecting a national banking system (1863), the Central Bank (Federal...

In this paper I document two new facts. First, bank net-interest margins (NIM) are insensitive to the short rate on average but this masks substantial heterogeneity in the cross section. I find cross sectional variation ranging from a -30bp to +40bp change in one quarter NIM after a 100bp change...

The U.S. Federal Reserve purchased both agency mortgage-backed securities (MBS) and Treasury securities to conduct quantitative easing (QE). Using micro-level data, we find that banks benefiting from MBS purchases increase mortgage origination, compared to other banks. At the same time, these...