In a model in which credit markets play a crucial role, we examine two policy options for reducing child labour, 'food for education' and 'investment in education quality,' With an imperfectly elastic supply of credit, an increase in food subsidy is more effective in reducing child labour than...

We investigate the provision of public capital in an endogenous growth model with asymmetric information. In a credit market with costly screening, we show that the equilibrium contracts are characterized by the self-selection of borrowers. Through identifying an additional adverse effect of...

This paper explores how changes in credit market competition may result in a less pronounced effect of credit conditions on the real economy, and low volatility. Using the state-level deregulation of the U.S. banking system in the 1980s as a natural experiment, I examine whether changes in...

We explore the intertwined dynamics of asset prices and the macroeconomy in a Behavioural model of Credit Cycles (BCC) characterized by a credit friction `a la Kiyotaki and Moore and heterogeneous expectations cum heuristic switching `a la Brock and Hommes. This behavioural approach allows to...

The decline of the US manufacturing share since 1960 has occurred disproportionately during recessions. Using evidence from two natural experiments—the collapse of Lehman Brothers in 2008 and US interstate banking deregulation in the 1980s—I document a role for credit reallocation in...

This paper investigates the credit market power channel of macroeconomic transmission. I propose a novel measure of competition on the asset side of bank balance sheets by estimating demand elasticities across local U.S. credit markets. My empirical approach exploits within-bank cross- regional...

We uncover new facts: U.S. banks countercyclically vary the ratio of charge-offs to defaulted loans (COD). The variance of this ratio is roughly 15 times larger than that of GDP. Canonical financial accelerator models cannot explain this variance. We develop an expression for the wedge between...

We construct and calibrate a monetary model of corporate finance with endogenous formation of lending relationships. The equilibrium features money demands by firms that depend on their access to credit and a pecking order of financing means. We describe the mechanism through which monetary...

Our test procedure for discrimination in lending combines denial rates and recovery rates and is applicable to simple and intersectional discrimination regardless of the profit orientation of the lender. Using a European microcredit dataset, the tests reveal that the positive—and socially...