Are households more likely to be homeowners when “housing risk” is higher? We show that homeownership rates and loan-to-value (LTV) ratios at the city level are strongly negatively correlated with house price levels and the variance of house price growth rates in the city. But both price...

Understanding how banks allocate their resources across different intermediation activities is crucial for gauging the health of the credit market. In this paper, I show that banks do not fully internalize the effects of their allocation decisions, leading to an inefficiently high amount of...

The paper studies how high leverage and crises can arise as a result of changes in the income distribution. Empirically, the periods 1920-1929 and 1983-2007 both exhibited a large increase in the income share of the rich, a large increase in leverage for the remainder, and an eventual financial...

The rate of long-term unemployment spiked during the Great Recession. To help explain this, I exploit the systematic and counter-cyclical differences in unemployment duration across occupations. This heterogeneity extends the tail of the unemployment duration distribution, which is necessary to...

Data on the world saving distribution reveals three key features: (i) saving rates are significantly different across countries and they remain different for long periods of time; (ii) the average saving rate has remained relatively unchanged but the dispersion in saving rates has risen; and...

This paper examines the relationship between sovereign bond spreads, local economic activity, and global financial risk. We use secondary-market prices of dollar-denominated sovereign securities to construct yield spreads between sovereign bond yields and yields on the appropriately defined...

determination of the …nancing cost of working capital.

To establish that our model is a reasonable description of the data we estimate the model using Bayesian methods and then evaluate its fit along a number of standard dimensions. The Bayesian approach to estimating the model parameters is especially important for providing discipline on the...

We document that international transactions for narrowly defined goods occur infrequently. We study the implications of this lumpiness of international trade for the response of prices and quantities during large devaluations. Using a calibrated inventory management model of international trade...

What inflation rate should central banks target? Following the work of Bils and Klenow (2004), who were the first to document the large amount of heterogeneity in the frequency of price changes across different categories of goods and services in the United States, a growing literature has...