Working Papers

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.

The goal of this paper is to show that household-level financial distress (FD) varies greatly, meaning there is unequal exposure to macroeconomic risk, and that FD can increase macroeconomic vulnerability.

The authors develop a model of industry evolution that links innovation, diffusion, and intellectual property protection with 18 industries, including automobiles and personal computers to show how industry dynamics shape optimal policy design.

Episodes of booming innovation coincide with intense speculation in financial markets leading to bubbles — increases in market valuations and firm creation followed by a crash.

In this paper, we aim to provide insights into two main questions: First, which firms set up plants in which locations? Second, what determine the scale and location of production? Answering these questions requires us to think about plants and firms as distinct, albeit related, economic entities.