Working Papers

Borrowing to Save and Investment Dynamics“, January 2020. Revise & Resubmit, Review of Economic Studies

During the Great Recession, investment declined more among firms whose indebtedness increased. Instead of investing, they expanded their stock of safe assets. In a general equilibrium model with heterogeneous firms, I show that “borrowing to save” can simultaneously generate a sharp downturn and a slow recovery.

The Information Driven Financial Accelerator” (with Antonio Falato), November 2020

We show that noisy information in corporate debt markets can generate boom-bust credit cycles in a quantitative business cycle model.

Expectations and Credit Slumps” (with Antonio Falato), March 2022

Why was bank lending slow to recover after the 2008 financial crisis? Using microdata and a quantitative model, we argue that over-extrapolation by banks played an important role.