Using regionally disaggregated data on economic activity, we show that risk sharing plays a key role in shaping the … real effects of monetary policy. With weak risk sharing, monetary policy shocks trigger a strong and durable response in … output. With strong risk sharing, the response is attenuated, and output reverts to its initial level over the medium term …

low-risk firms (i.e., firms with low debt burdens) respond more positively in increasing leverage ratios when the Federal … bond issuance rather than loan issuance. These firms outperform their high-risk counterparts in firm efficiency and … financial performance after the monetary policy shocks. Overall, our evidence suggests that low-risk firms are the main …

How does firm dynamically adjust its capital and debt structure in response to interest rate risk? Using micro-data, I …'s investment sensitivity to interest rate risk: firms with higher loan share reduce investment more aggressively when interest rate …