University of Notre Dame
Department of Economics
3033 Jenkins Nanovic Hall
Notre Dame, IN 46556



Curriculum Vitae

Working Paper

Borrowing to Save and Investment Dynamics” — December 2018

Existing literature on financial frictions argue that firms reduce investment in a crisis due to a lack of credit. However, U.S. public firms, which together accounted for 89 percent of the decline in investment during the Great Recession, experienced no drop in borrowing. Instead of investing, they borrowed to expand their stock of safe assets; that is, they borrowed to save. I model borrowing to save as an optimal portfolio choice when firms face gradually resolving uncertainty. In a quantitative general equilibrium model with heterogeneous firms, I show that this mechanism can simultaneously generate a sharp downturn and a slow recovery.


Work in Progress

“The Behavioral Financial Accelerator” (with Antonio Falato)

We show that bond investors’ expectations are key to explaining fluctuations in credit spreads, and the business cycle dynamics of  both real and financial variables. (Draft coming soon)