“Borrowing to Save and Investment Dynamics”, May 2022. Online Appendix
Conditionally Accepted, 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.
“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.
“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.