Anil's interests include Macroeconomics, Sovereign Debt Crises and Financial Economics.
Abstract of Anil's job market paper:
Title: Sovereign risk and bank risk-taking
Abstract: In European countries recently hit by a sovereign debt crisis, the share of domestic sovereign debt held by the national banking system has sharply increased, raising concerns about economic and financial resilience, as well as policy design. This paper addresses these issues by analyzing the banking equilibrium in a model with optimizing banks and depositors. Under-capitalized banks in default-risky countries have an incentive to gamble on domestic sovereign bonds. The optimal reaction by depositors to bank insolvency risk imposes discipline, but also leaves the economy susceptible to self-fulfilling shifts in sentiments. In a bad equilibrium, sovereign risk shocks lead to a prolonged period of financial fragility and a persistent drop in output. The model is quantified using Portuguese data and generates similar dynamics to the observed behaviour of the Portuguese economy during the debt crisis. Policy interventions face a trade-off between alleviating funding constraints and strengthening incentives to gamble. Liquidity provision to banks eliminates the good equilibrium when not targeted. Targeted interventions have the capacity to eliminate adverse equilibria.
Teodora Boneva is a British Academy Post-doctoral fellow at the University College London (Department of Economics). Her general research interests include human capital formation, labour, consumption and socio-economic inequality. Her current research focuses on the evolution of preferences and skills, the role of feedback in the skill accumulation process and the role of beliefs in educational investment decisions. She is particularly interested in how interventions, be it in the school, home or work environment, can promote skill development and improve life outcomes.
Since Sept 2016 I am in the Economist Program, at the International Monetary Fund (IMF).
In my research project supported by the Keynes Fund, I examine how school infrastructure projects affect local economies. I start by constructing a unique dataset of thousands of US school bond referenda from newspaper articles reporting on the referenda. Using difference-in-difference and regression discontinuity approaches, I find that bond approval has large, positive effects on per capita income and employment, and that it leads to persistent increases in local population, house prices, residential construction, and refinancing activity. These results in turn suggest an important complementarity between fiscal multipliers and the marginal utility of government spending.
Jasmine's research interests lie in Macro Finance.
Abstract of Jasmine's job market paper:
Balance Sheet Restructuring, Financial Frictions, and Investment Dynamics
This paper examines how firms' balance sheet policies respond to aggregate shocks, and the implications of such responses on future macroeconomic dynamics. Using a micro-level dataset on the public U.S. firms' debt compositions between 2006 and 2015, I provide novel evidence that the substitution of corporate bonds for bank loans since the Great Recession has been associated with a substantial reallocation of firms' assets from capital to cash holdings. Remarkably, firms that had tapped the bond market in large quantities experienced a more severe recession and a slower recovery. To evaluate the relative importance of debt substitution in the propagation of the Great Recession, I build a quantitative general equilibrium model of firm dynamics, where firms choose both the scale and composition of debt, and simultaneously hold cash balances. In choosing between bank and bond financing, firms trade-off the greater flexibility of banks in case of financial distress against the lower marginal cost of bond issuance. A contraction in the effective supply of bank credit generates powerful dynamics on cash holdings and investment that are consistent with the data and counter to those implied by uncertainty-driven aggregate demand shocks. Finally, a calibration of the model to the Great Recession indicates that the channel of balance sheet restructuring can account for one-third of the decline in aggregate investment in the first two years of the crisis, and more than one-half of the decline in the following five years.
Alexandre is an Assistant Professor in Economics at the Institute for International Economic Studies, Stockholm University. His research seeks to combine Information Economics with Macroeconomics and Finance. He is especially interested in the optimal design of communication policies.
Irina's research interests are in Development Economics, Labour Economics, and Microeconometrics
Riccardo Trezzi, holds a BA in Economics from Bocconi University, a Master of Arts from the University of Pavia, a Master degree in Economics from the University of Warwick and a PhD in Economics from the University of Cambridge. He has worked for the United Nations in Morocco, the World Bank Group in Washington DC and in 2014 he has been appointed as an Economist at the Board of Governors of the Federal Reserve Bank in Washington DC. His research interests lies in the broad areas of Applied Macroeconomics and Public Finance.