- Ph.D. Economics, UCLA (2011)
- MSc Economics and Econometrics, Southampton University (2006)
- BSc Economics and Business, Goethe University Frankfurt (2005)
Josef Schroth is a Research Advisor in the Financial Stability Department at the Bank of Canada. He works in the areas of macroeconomics and accounting. Specific topics include financial market regulation and disclosure choice. Josef Schroth received his PhD in economics from UCLA.
Staff analytical notes
Staff working papers
Optimal Monetary and Macroprudential PoliciesMacroprudential policy should aim for bank balance sheets that are larger and safer during normal times but smaller and riskier during financial crises. During recoveries from financial crises, monetary policy should complement macroprudential policy by being less expansive than what would be required to close the labour gap.
Outside Investor Access to Top Management: Market Monitoring versus Stock Price ManipulationShould managers be paid in stock options if they provide stock-market participants with information about the firm? This paper studies how firm owners trade off the benefit of stock-price incentives and better-informed market participants against the cost of potential stock-price manipulation.
Macroprudential Policy with Capital BuffersThe countercyclical capital buffer is part of Basel III, the set of regulatory measures developed in response to the financial crisis of 2007–09. This study focuses on how time-varying capital buffers can address inefficiencies in economies with endogenous financial crises.
Optimal Capital RegulationWe study constrained-efficient bank capital regulation in a model with market-imposed equity requirements. Banks hold equity buffers to insure against sudden loss of access to funding. However, in the model, banks choose to only partially self-insure because equity is privately costly.
Capital Flows to Developing Countries: Is There an Allocation Puzzle?Foreign direct investment inflows are positively related to growth across developing countries—but so are savings in excess of investment. I develop an explanation for this well-established puzzle by focusing on the limited availability of consumer credit in developing countries together with general equilibrium effects.
Supervising Financial RegulatorsHow much discretion should local financial regulators in a banking union have in accommodating local credit demand? I analyze this question in an economy where local regulators privately observe expected output from high lending. They do not fully internalize default costs from high lending since deposit insurance cannot be priced fairly.
Financial Crisis InterventionsThis paper develops a model of an economy where bank credit supports both productive investment and individual consumption smoothing in the face of idiosyncratic income risk. Bank credit is constrained by bank equity capital.
Risk Sharing in the Presence of a Public GoodThis paper studies an economy where agents can spend resources on consuming a private good and on funding a public good. There is asymmetric information regarding agents’ relative preference for private versus public good consumption.
Managerial Compensation Duration and Stock Price ManipulationI build a model of optimal managerial compensation where managers each have a privately observed propensity to manipulate short-term stock prices.
Financial Crisis ResolutionThis paper studies a dynamic version of the Holmstrom-Tirole model of intermediated finance. I show that competitive equilibria are not constrained efficient when the economy experiences a financial crisis. A pecuniary externality entails that banks’ desire to accumulate capital over time aggravates the scarcity of informed capital during the financial crisis.
- “Macroprudential Policy with Capital Buffers.”
Journal of Monetary Economics, vol. 118, p. 296-311 (2021).
- “On the Distributional Effects of Bank Bailouts.”
Review of Economic Dynamics , vol. 40, p. 252-277 (2021).
- “Managerial Compensation and Stock Price Manipulation.”
Journal of Accounting Research, vol. 56, no. 5, p. 1335-1381 (2018).
- “Optimal Intermediary Rents.”
American Economic Journal: Macroeconomics, vol. 8, no. 1, p. 98-118 (2016).