From Banks to Nonbanks: Macroprudential and Monetary Policy Effects on Corporate Lending

By Bruno Albuquerque, Eugenio Cerutti, Nanyu Chen, and Melih Firat

American Economic Journal: Macroeconomics

The growing role of nonbanks in corporate credit intermediation raises important yet underexplored questions about the transmission of monetary policy (MP) and macroprudential policy (MaPP) to the real economy. Using syndicated loan data, we find that ...

A Static Capital Buffer is Hard To Beat

By Matthew Canzoneri, Behzad Diba, Luca Guerrieri, and Arsenii Mishin

American Economic Journal: Macroeconomics

In a model with endogenous risk-taking, deposit insurance and limited liability may lead banks to make risky loans that are socially inefficient. Capital requirements can prevent excessive risk-taking at the cost of reducing liquidity-producing bank dep...

Using Machine Learning to Generate, Clarify, and Improve Economic Models

By Annie Liang

Journal of Economic Literature

This article examines how machine learning and other computational techniques can contribute to the development of economic models. First, comparing economic models to flexible algorithms can help clarify the strengths and limitations of existing models,...

Knowledge Spillovers, Competition, and Individual Careers

By Thomas Cornelissen, Christian Dustmann, and Uta Schönberg

American Economic Review

Exposure to better peers in the workplace can influence career trajectories through two opposing channels: positively, via knowledge spillovers, and negatively, through competition for advancement. We disentangle these effects by studying untrained lab...

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Becoming Legible to the State: The Necessary but Not Sufficient Role of Identification in Taxation

By Oyebola Okunogbe

American Economic Review

Many lower-income countries know little about their citizens and their tax bases, which hinders effective taxation. This paper studies the impact of making the tax base more “legible” to the state and signaling this legibility to taxpayers. Leveragi...

Firm Adaptation in Production Networks: Evidence from Extreme Weather Events in Pakistan

By Clare Balboni, Johannes Boehm, and Mazhar Waseem

American Economic Review

This paper considers how far private adaptation may reduce future vulnerability to climate risks. Using data on monthly firm-to-firm transactions from Pakistan, we find that flood-affected firms are more likely to relocate to safer ground, and shift pur...

The Returns to Government R&D: Evidence from US Appropriations Shocks

By Andrew J. Fieldhouse and Karel Mertens

American Economic Review

Based on a narrative classification of all significant postwar changes in R&D appropriations for five major federal agencies, we find that an increase in nondefense R&D appropriations leads to increases in various measures of innovative activity and hi...