Research in development economics reveals that the bulk of cross-country differences in economic growth is attributable to differences in productivity. By some accounts, productivity contributes to more than 60 percent of countries' growth in per capita GDP. I examine a particular channel...

This paper examines how changes in bank lending standards are related to the availability of bank lines of credit for private and comparable public firms. Overall, we find that access to lines of credit is more contingent on bank lending standards for private than for public firms. The impact of...

We document five facts about banks: (1) market and book leverage diverged during the 2008 crisis, (2) Tobin's Q predicts future profitability, (3) neither book nor market leverage appears constrained, (4) banks maintain a market-leverage target that is reached slowly, and (5) precrisis, leverage...

Shadow financing through off-balance sheet wealth management products (WMPs) has become increasingly important besides deposits in China. We quantify the economic magnitude of the effect of WMPs on banking stability in an equilibrium model calibrated to Chinese banking sector data. Alternative...

This paper used an economic model of systemic risk given by Acharya (2016) to measure the state of systemic risk in Indian financial market during COVID-19 Pandemic. It is based on marginal expected shortfall (MES), the likelihoods of a financial firm to be undercapitalized when the financial...

I study positively and normatively the role of bank heterogeneity in the macroeconomy. I build an empirically-motivated macroeconomic model with a banking sector that features uninsurable idiosyncratic rate of return shocks, endogenous markups, costly default, and endogenous entry. The framework...

This paper studies how Central Bank eligibility requirements affect the supply and quality of bonds issued by non-financial firms. Banks increase demand for eligible bonds, to which firms respond by increasing their debt issuance and, therefore, default risk. We characterize firm responses and...

Using large panel data of public and private firms, this paper dissects the aggregate growth of bond financing in the Euro Area. It considerably broadened firms' access to funding, but can also lead to new risks. The composition of bond issuers has shifted, with the entry of many smaller and...

We provide empirical evidence of the causal effects of changes in financial intermediaries' net worth on the aggregate economy. Our strategy identifies financial shocks as high-frequency changes in the market value of intermediaries' net worth in a narrow window around their earnings...

The rise of bond financing in EuropeUsing large panel data of public and private firms, this paper dissects the growth of bond financing in the Euro Area through the lens of the cross-section of issuers. In recent years, the composition of bond issuers has shifted, with the entry of many smaller...