We propose a model that starts from the premise that intangible capital needs to be stored on some medium --- software, patents, essential employees --- before it can be utilized in production. Storage implies that intangible capital may be partially non-rival within the firm, leading to scale...

We study the effects of monetary-policy-induced changes in Tobin's q on corporate investment and capital structure. We develop a theory of the mechanism, provide empirical evidence, evaluate the ability of the quantitative theory to match the evidence, and quantify the relevance for monetary...

Economists have widely varying opinions of how corporate taxation affects aggregate investment, output, and wages. This disagreement reflects a 60-year history of misapplication of the neoclassical theory of investment to interpret empirical work and guide policy analysis. In this article I...

We document that monetary policy has a substantial impact on innovation activities. After a tightening shock of 100 basis points, research and development (R&D) spending declines by about 1 to 3 percent and venture capital (VC) investment declines by about 25 percent in the following 1 to 3...

We investigate how firms manage financial default risk (on debt) and operational default risk (on delivery obligations). Financially constrained firms reduce operational hedging through inventory and supply chain in favor of cash holdings. Our model predicts that firms' markup increases with...

Banks have voluntarily committed to align their lending portfolios with a net zero path toward a decarbonized economy. In this review, we explore the economic channels for why portfolio decarbonization might be consistent with lender profit maximization. We frame the question by positing that...

We study the effectiveness of government aid to exporters by exploring an exogenous shock that affected the ability of the Export-Import Bank of the United States (EXIM) to provide aid to U.S. exporters through loan guarantees to importers. We focus on Boeing, the largest individual recipient of...

The importance of time in production was emphasized by Classical economists and was at the core of the Austrian capital theory proposed by Böhm-Bawerk and further elaborated by Wicksell, Hicks, Dorfman, and many others. A central concept in this literature is the existence of an 'average period...

We analyze the adoption of clean technology by heterogeneous firms subject to financing constraints. In the model, capital goods differ in terms of their energy needs and age. In equilibrium, cleaner and newer capital requires more financial resources. Therefore, financial constraints induce an...

China's land market features a substantial industrial discount: industrial-zoned land is an order of magnitude cheaper than residential land. In contrast to explanations centered on subsidies to industry or promoting industry growth, we emphasize the importance of future tax revenues from the...