Working Papers
Financial Liberalization, Credit Market Dynamism and Allocative Efficiency - with Ana Maria Herrera and Raoul Minetti
- Employing the methodology put forward by Davis and Haltiwanger (1992) for the measurement of job reallocation, we construct measures of credit reallocation across firms in the U.S. states. We then exploit the staggered deregulation of the credit markets of the states of the eighties as a natural experiment to identify an exogenous shock to the process of credit reallocation. The analysis reveals that the credit market deregulation intensified inter-firm credit reallocation in the states, while leaving aggregate credit growth essentially unaltered. In turn, the increased dynamism in credit reallocation allowed to systematically transfer funds to more productive firms in a more flexible way.
- This paper studies how changes in household credit affect small business lending. First, we empirically investigate the effect of an exogenous increase in household credit on small business credit by exploiting the 1997 liberalization of home equity lending in Texas. We find that the relaxation of borrowing constraints on household lending crowds out business lending, as small business loan growth declines by roughly 20 percentage points following the liberalization. However, the negative effect is weaker in counties that experienced strong house price growth, providing evidence for a collateral effect. Then, we build a closed economy model with borrowing constraints that differentiates between household and business lending and study their interaction. We show that an expansion in household credit leads to a decline in firm borrowing. Even though there is a positive collateral effect, the crowding out effect dominates in both the theoretical model and the empirical analysis.
- This paper investigates international monetary spillovers to stock prices in Bangladesh, a frontier market that has been excluded from prior studies in the literature. Using daily stock price data for over 300 publicly traded firms in a high frequency framework, we find that contractionary monetary shocks originating from the US, euro area, and China lower stock prices, with Chinese monetary shocks having the largest impact. Contractionary shocks originating from India, on the other hand, lead to a statistically significant increase in stock returns. The positive response is driven by a small number of policy decisions. When these outlier decisions are removed from the sample, contractionary Indian monetary shocks lead to a decline in stock prices in line with spillovers from the other countries.
Publications
An Economic Analysis of Standard Reference Materials - with Michael J. Hall and Albert N. Link (working paper)
Journal of Technology Transfer, forthcoming
The Deposits Channel Revisited - with Nimrod Segev (working paper) (code) (online appendix)
Journal of Applied Econometrics, Vol 37(2), pp 450-458, March 2022
The International Spillover Effects of US Monetary Policy Uncertainty - with Aeimit Lakdawala and Timothy Moreland (working paper) (code) (online appendix)
Journal of International Economics, Vol 133, 103525, November 2021
Bank Regulation and Monetary Policy Transmission: Evidence from the U.S. States Liberalization - with Aeimit Lakdawala and Raoul Minetti (working paper) (code)
European Economic Review, Vol 138, 103859, September 2021
Monetary Policy, Bank Competition and Regional Credit Cycles: Evidence from a Quasi-Natural Experiment - with Nimrod Segev (working paper)
Journal of Corporate Finance, Vol 64, 101494, October 2020
Federal Reserve Private Information and the Stock Market - with Aeimit Lakdawala (working paper) (code)
Journal of Banking & Finance, Vol 106, pp 34-49, September 2019
Labor Market Effects in the Austrian Business Cycle Theory
Quarterly Journal of Austrian Economics, Vol 20 (3), pp 224-254, Fall 2017
Work in Progress
Monetary Policy Effectiveness Under Supply Chain Pressures: Pre-Pandemic Evidence From the US - with Sebastian Laumer
