There is a new and now large literature analyzing government policies for financial stability based on models with endogenous borrowing constraints. These normative analyses build upon the concept of constrained efficient allocation where the social planner is constrained by the same borrowing...

We study credit allocation across firms and its real effects during China's economic stimulus plan of 2009-2010. We match confidential loan-level data from the 19 largest Chinese banks with firm-level data on manufacturing firms. We document that the stimulus-driven credit expansion...

Do investment tax incentives improve job prospects for workers? We explore states' adoption of a major federal tax incentive that accelerates the depreciation of equipment investments for eligible firms but not for ineligible ones. Analyzing massive establishment-level datasets on occupational...

Various countries have implemented transfer programs to individuals since the Covid-19 outbreaks. However, the extent to which such transfers alleviate economic recessions is unclear. This paper analyzes a South Korean program, which provided vouchers redeemable only at small local businesses....

Consumer response to transitory income shocks is of academic interest in many disciplines. During the 2020 COVID-19 epidemic, the Federal government in the US passed the CARES Act that among other measures provides direct payments to households. In this article we utilize a large database on...

The short-term impact of COVID-19 on the environment is positive, as with the shutdown of economic activity carbon emissions have dropped. Once the crisis is over, emissions and environmental externalities are likely to rebound. Further, if the stimulus packages announced by the government are...

Policymakers have employed a range of fiscal and monetary tools to address the economic and financial fallout from COVID-19. From ultra-accommodative monetary policy, loan guarantees to income transfers, these policies have averted a depression and supported the private sector. This paper...

To predict the effects of the 2020 U.S. ‘CARES' act on consumption, we extend a model that matches responses of households to past consumption stimulus packages. The extension allows us to account for two novel features of the coronavirus crisis. First, during the lockdown, many types of...

This paper makes an innovative contribution to the literature by analyzing the determinants of the COVID-19 economic stimulus. In particular, we explore whether the stock market fall observed due to the coronavirus pandemic in many countries around the world can predict the COVID-19 stimulus...