Why does the same monetary tightening lead some banks to write safer loans than others? We develop a model and identify a novel deposit-franchise mechanism within the risk-taking channel of monetary policy. Sticky deposits generate rents that vanish …
We introduce a novel monthly county-level consumption dataset constructed from spending data on over 350 million credit cards in the Federal Reserve’s Y-14M reports, covering more than 3,000 U.S. counties since 2014. We first show that the data …
Using newly matched U.S. defense contract and restricted administrative employment data, we show that the regional employment effects of defense procurement are costly, concentrated, and slow to diffuse. Employment gains are initially driven by large …
This paper provides novel empirical evidence on how political fragmentation shapes the fiscal transmission mechanism. Using data from 16 OECD countries (1978-2019) and narrative accounts to identify exogenous fiscal interventions, we show that when …
This paper provides new causal evidence on the effects of fiscal austerity on productivity using data covering 139 regions from ten Euro Area countries over 1999-2019. We construct a novel utilization-adjusted TFP measure at the regional level that …
Using a novel regional database covering over 200 elections in several European countries, this paper provides new empirical evidence on the political consequences of fiscal consolidations. To identify exogenous reductions in regional public …
The 1876 Portuguese banking crisis, triggered by a partial default on Spanish bonds, offers a compelling historical case of widespread bank runs in a pre-central bank setting, where no major bank failures occurred despite severe liquidity pressures. …
This paper argues that the exchange rate regime matters for inflation and economic activity, with substantial benefits arising from a currency peg. At the heart of these benefits lies an increase in credibility that reduces the inflationary bias once …
We investigate the pass-through of a temporary value-added tax (VAT) cut on selected food products to consumer prices in Portugal. Exploiting a novel data set of daily online prices, we find that the VAT cut was fully transmitted to consumer prices, …
This paper examines the shifting dynamics in bank funding of nonbank financial institutions (NBFIs) from 1980 to 2024. We document three key facts. First, bank funding to NBFIs has been relatively stable, accounting for, on average, 3.5% of total …