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Liquidity Dependence and the Waxing and Waning of Central Bank Balance Sheets
Acharya, Viral V.; Chauhan, Rahul S.; Rajan, Raghuram Govind - National Bureau of Economic Research - 2023
in 2017, there was no commensurate shrinkage of these claims on liquidity. Consequently, the financial sector was left … more sensitive to potential liquidity shocks, with weaker-capitalized banks most exposed. This necessitated Fed liquidity … provision in September 2019 and again in March 2020. Liquidity-risk-exposed banks suffered the most drawdowns and the largest …
Persistent link: https://www.econbiz.de/10014247971
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Bank Funding Risk, Reference Rates, and Credit Supply
Cooperman, Harry; Duffie, Darrell; Luck, Stephan; Wang, … - National Bureau of Economic Research - 2023
Corporate credit lines are drawn more heavily when funding markets are more stressed. This covariance elevates expected bank funding costs. We show that credit supply is dampened by the associated debt-overhang cost to bank shareholders. Until 2022, this impact was reduced by linking the...
Persistent link: https://www.econbiz.de/10014226104
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Interbank Networks and the Interregional Transmission of Financial Crises : Evidence from the Panic of 1907
Jaremski, Matthew S.; Wheelock, David C. - National Bureau of Economic Research - 2023
This paper provides quantitative evidence on interbank transmission of financial distress in the Panic of 1907 and ensuing recession. Originating in New York City, the panic led to payment suspensions and emergency currency issuance in many cities. Data on the universe of interbank connections...
Persistent link: https://www.econbiz.de/10014287370
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Bankruptcy Exemption of Repo Markets : Too Much Today for Too Little Tomorrow?
Acharya, Viral V.; Anshuman, V. Ravi; Viswanathan, S. - National Bureau of Economic Research - 2024
-and-repurchase (repo) contracts. Exemption from an automatic stay in bankruptcy enables financial intermediaries to raise greater liquidity … and induces entry of intermediaries with higher leverage during normal times. This liquidity creation occurs, however, at …
Persistent link: https://www.econbiz.de/10014468227
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An IV Hazard Model of Loan Default with an Application to Subprime Mortgage Cohorts
Palmer, Christopher J. - National Bureau of Economic Research - 2023
This paper develops a control-function methodology accounting for endogenous or mismeasured regressors in hazard models. I provide sufficient identifying assumptions and regularity conditions for the estimator to be consistent and asymptotically normal. Applying my estimator to the subprime...
Persistent link: https://www.econbiz.de/10014447321
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Bank Failures and Economic Activity : Evidence from the Progressive Era
Richardson, Gary; Angel, Marco del; Gou, Michael - National Bureau of Economic Research - 2024
During the Progressive Era (1900-29), economic growth was rapid but volatile. Boom and busts witnessed the formation and failure of tens of thousands of firms and thousands of banks. This essay uses new data and methods to identify causal links between failures of banks and bankruptcies of...
Persistent link: https://www.econbiz.de/10014528384
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Shared Models in Networks, Organizations, and Groups
Schwartzstein, Joshua; Sunderam, Adi - National Bureau of Economic Research - 2022
To understand new information, we exchange models or interpretations with others. This paper provides a framework for thinking about such social exchanges of models. The key assumption is that people adopt the interpretation in their network that best explains the data, given their prior...
Persistent link: https://www.econbiz.de/10013462690
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Learning, Diversity and Adaptation in Changing Environments : The Role of Weak Links
Acemoglu, Daron; Ozdaglar, Asuman E.; Pattathil, Sarat - National Bureau of Economic Research - 2023
Adaptation to dynamic conditions requires a certain degree of diversity. If all agents take the best current action, learning that the underlying state has changed and behavior should adapt will be slower. Diversity is harder to maintain when there is fast communication between agents, because...
Persistent link: https://www.econbiz.de/10014287315
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Are Supply Networks Efficiently Resilient?
Capponi, Agostino; Du, Chuan; Stiglitz, Joseph E. - National Bureau of Economic Research - 2024
We show that supply networks are inefficiently, and insufficiently, resilient. Upstream firms can expand their production capacity to hedge against supply and demand shocks. But the social benefits of such investments are not internalized due to market power and market incompleteness. Upstream...
Persistent link: https://www.econbiz.de/10014512075
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The Deposit Business at Large vs. Small Banks
Avernas, Adrien d'; Eisfeldt, Andrea L.; Huang, Can; … - National Bureau of Economic Research - 2023
differences in "preferences and technologies." Large banks offer superior liquidity services but lower deposit rates, and locate …
Persistent link: https://www.econbiz.de/10014436996