Central Bank Liquidity Facilities and Market Making
We create a theoretical model of central bank asset purchases. The model helps explain how, in a crisis, these purchases ease pressures on investment dealers.
L1 - Market Structure, Firm Strategy, and Market Performance
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Centralizing Over-the-Counter Markets?
Would a shift in trading in fixed-income markets—from over the counter (bilateral trading) to a centralized electronic platform—improve welfare? We use trade-level data on the secondary market for Government of Canada debt to answer this question. -
Trade and Market Power in Product and Labor Markets
Trade liberalizations increase the sales and input purchases of productive firms relative to their less productive domestic competitors. This reallocation affects firms’ market power in their product and input markets. I quantify how the labour market power of employers affects the distribution and size of the gains from trade. -
Imperfect Banking Competition and Macroeconomic Volatility: A DSGE Framework
How do banks adjust their loan rate markup in response to macroeconomic shocks? -
Market Concentration and Uniform Pricing: Evidence from Bank Mergers
We show that US banks price deposits almost uniformly across their branches and that this pricing practice is more important than increases in local market concentration in explaining the deposit rate dynamics following bank mergers. -
On Causal Networks of Financial Firms: Structural Identification via Non-parametric Heteroskedasticity
Banks’ business interactions create a network of relationships that are hidden in the correlations of bank stock returns. But for policy interventions, we need causality to understand how the network changes. Thus, this paper looks for the causal network anticipated by investors. -
Non-competing Data Intermediaries
I study a model of competing data intermediaries (e.g., online platforms and data brokers) that collect personal data from consumers and sell it to downstream firms. -
Why Fixed Costs Matter for Proof-of-Work Based Cryptocurrencies
Can Bitcoin survive? Some say it will become vulnerable to attacks as the rewards for processing Bitcoin transactions continue to decline. The economics of fixed costs suggest the specialized hardware used to mine Bitcoin may be key to its survival. -
Trading on Long-term Information
Investors who trade based on good research are said to be the backbone of stock markets: They conduct research to discover the value of stocks and, through their trading, guide financial prices to reflect true value. What can make their job difficult is that high-speed, short-term traders could use machine learning and other technologies to infer when informed investors are trading. -
Multi-Product Pricing: Theory and Evidence from Large Retailers in Israel
Standard theories of price adjustment are based on the problem of a single-product firm, and therefore they may not be well suited to analyze price dynamics in the economy with multiproduct firms.