The process of globalization encompasses economic and financial integration. The abolition of capital controls and the dismantling of barriers of different kinds will expose previously sheltered companies to shocks on the global economic arena. Policy-makers in already globalized countries have...

The China’ economy has been structurally deleveraging recent years. By constructing a dynamic stochastic general equilibrium model with state-owned enterprises and private enterprises, this article explores the impacts of different types of firms deleveraging on China’s macroeconomic...

This paper (i) estimates the local effects of government stimulus spending on labor market outcomes and (ii) shows how these effects can be obtained from a firm's optimal policy in the presence of costs to hiring workers. We analyze the American Recovery and Reinvestment Act of 2009 (Recovery...

This paper studies the effect of government stimulus spending on a novel aspect of the labor market: the differential impact of spending on the total wage bill versus employment. We analyze the 2009 Recovery Act via instrumental variables using a new instrument, the spending done by federal...

We analyze the effects of dividend taxation in a general equilibrium business cycle model with an occasionally-binding investment credit limit. Permanent dividend tax reforms distort capital investment decisions in the binding long-run equilibrium, but are neutral otherwise. Temporary unexpected...

The interest rate at which US firms borrow funds has two features: (i) it moves in a countercyclical fashion and (ii) it is an inverted leading indicator of real economic activity: low interest rates today forecast future booms in GDP, consumption, investment, and employment. We show that a...

The interest rate at which US firms borrow funds has two features: (i) it moves in a countercyclical fashion and (ii) it is an inverted leading indicator of real economic activity: low interest rates today forecast future booms in GDP, consumption, investment, and employment. We show that a...

An assessment of the current state of housing viewed from the perspective of the slowly-recovering economy, coupled with valuations of the housing market, suggests there is a high likelihood of a double dip in housing prices. With current prices nearly 30 percent below their April 2006 peak, an...

In a panel of OECD and emerging economies, I find that recessions are associated with larger initial drops in investment and more persistent drops in output if they occur simultaneously with banking crises. Furthermore, the banking crises that are followed by more persistent output slumps are...

Based on the Stein (1996) model of financing and capital expenditures when market beliefs may be affected by sentiment, this paper directly estimates the effect of sentiment on hurdle rates. The hurdle rates are estimated for periods of high and low sentiment, making use of cross-sectional...