Search Results
Corporate Bond Spreads and the Pandemic II: Heterogeneity across Sectors
The COVID-19 pandemic’s effects on firm borrowing costs have been heterogeneous, with some sectors being more affected than others.
How Many Employees Are Prepared to Work from Home?
Sorting workers by occupation and income helps shed light on who is more likely to be able to work remotely.
Corporate Bond Spreads and the Pandemic IV: Liquidity Buffers
The cost of borrowing rose for most firms during the pandemic-related disruption of financial markets, but firms with greater liquidity have had smaller increases in credit spreads.
Journal Article
What Is Driving Student Debt in the Eighth District?
Tuition appears to be a bigger driver of student debt growth in the Eighth District than in the U.S. as a whole.
Corporate Bond Spreads and the Pandemic III: Variance across Sectors and Firms
Corporate bond spreads widened when COVID-19 initially began spreading, then spreads stabilized. How have spreads fared across individual sectors and issuances from the same firm?
Working Paper
When Liquidity Matters: Firm Balance Sheets during Large Crises
We study how aggregate shocks shape the joint dynamics of credit spreads, debt, and liquid asset holdings for nonfinancial firms, focusing on the Great Financial Crisis (GFC) and COVID-19. Both episodes saw sharp credit spread increases and investment declines, but debt and liquidity fell during the GFC and rose during COVID-19. Cross-sectionally, leverage drove spreads and investment in the GFC, while liquidity dominated during COVID-19. We build a macro-finance model of firm capital structure with a liquidity motive for working capital. Calibrated to data, it attributes the GFC to real and ...
Working Paper
When Liquidity Matters: Firm Balance Sheets during Large Crises
We study how aggregate shocks shape the joint dynamics of credit spreads, debt, and liquid asset holdings for nonfinancial firms, focusing on the Great Financial Crisis (GFC) and COVID-19. Both episodes saw sharp credit spread increases and investment declines, but debt and liquidity fell during the GFC and rose during COVID-19. Cross-sectionally, leverage drove spreads and investment in the GFC, while liquidity dominated during COVID-19. We build a macro-finance model of firm capital structure with a liquidity motive for working capital. Calibrated to data, it attributes the GFC to real and ...
Working Paper
The Sine Aggregatio Approach to Applied Macro
We develop a method to use disaggregate data to conduct causal inference in macroeconomics. The approach permits one to infer the aggregate effect of a macro treatment using regional outcome data and a valid instrument. We estimate a macro effect without (sine) the aggregation (aggregatio) of the outcome variable. We exploit cross-equation parameter restrictions to increase precision relative to traditional, aggregate series estimates and provide a method to assess robustness to departures from these restrictions. We illustrate our method via estimating the jobs effect of oil price changes ...
Working Paper
The Sine Aggregatio Approach to Applied Macro
We develop a method to use disaggregate data to conduct causal inference in macroeconomics. The approach permits one to infer the aggregate effect of a macro treatment using regional outcome data and a valid instrument. We estimate a macro effect without (sine) the aggregation (aggregatio) of the outcome variable. We exploit cross-series parameter restrictions to increase precision relative to traditional, aggregate series estimates and provide a method to assess robustness to modest departures from these restrictions. We illustrate our method via estimating the jobs effect of oil price ...
Working Paper
The Local-Spillover Decomposition of an Aggregate Causal Effect
This paper presents a method to decompose the causal effect of government defense spending into: (i) a local (or direct) effect, and (ii) a spillover (or indirect) effect. Each effect is measured as a multiplier: the unit change in output of a one unit change in government spending. We apply this method to study the effect of U.S. defense spending on output using regional panel data. We estimate a positive local multiplier and a negative spillover multiplier. By construction, the sum of the local and spillover multipliers provides an estimate of the aggregate multiplier. The ...