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Falling Interest Rates and Credit Reallocation: Lessons from General Equilibrium

Alberto Martin,Alejandro Van der Gothe,Luc Laeven, Victoria Vanasco , Vladimir Asriyan   Nov 15,2023

Working Paper No.00107-01

We show that in a canonical model with heterogeneous entrepreneurs, financial frictions, and an imperfectly elastic supply of capital, a... Read More

Market opacity and fragility: Why liquidity evaporates when it is most needed

Giovanni Cespa, Xavier Vives   Dec 04,2023

Working Paper No.00131-00

We show that, consistent with empirical evidence, access to order flow information allows traders to supply liquidity via contrarian marketable... Read More

Free entry in a Cournot market with overlapping ownership

Orestis Vravosinos, Xavier Vives   Dec 04,2023

Working Paper No.00130-01

We examine the effects of overlapping ownership among existing firms deciding whether to enter a product market. We show that... Read More

The Short-Termism Trap: Catering to Informed Investors Under Stock-Based CEO Compensation

James Dow , Jungsuk Han Francesco Sangiorgi   Dec 15,2023

Working Paper No.00132-00

The combination of stock-based CEO compensation and limited informed trading capital creates a ''race to the bottom among firms resulting... Read More

Central Bank Digital Currency and Financial Stability

Peter Hoffmann,Agnese Leonello,Davide Porcellacchia, Toni Ahnert   Dec 20,2023

Working Paper No.00100-03

What is the effect of Central Bank Digital Currency (CBDC) on financial stability? We answer this question by studying a model... Read More

The Rise of Factor Investing: "Passive" Security Design and Market Implications

Douglas Xu, Shiyang Huang , Lin William Cong (叢林)   Dec 30,2023

Working Paper No.00133-00

We model financial innovations such as Exchange-Traded Funds, smart beta products, and many index-based vehicles as composite securities (CSs) that... Read More

The Tokenomics of Staking

Zhiheng He,Ke Tang, Lin William Cong (叢林)   Dec 30,2023

Working Paper No.00134-00

Blockchain-based platforms and decentralized finance prominently features ``staking'': Besides offering a convenience yield for transactions as digital media of exchange,... Read More

Production, Trade, and Cross-Border Data Flows

Qing Chang,Longtian Zhang,Liyong Wang, Lin William Cong (叢林)   Dec 30,2023

Working Paper No.00135-00

We build a tractable general equilibrium model to analyze the effects of cross-border data flows and pre-existing development gaps in... Read More

Market Integration, Risk-Taking, and Income Inequality

Ron Kaniel , Yizhou Xiao Lin William Cong (叢林)   Dec 30,2023

Working Paper No.00136-00

A pandemic or nationalism can dial back global integration as much as advancements in IT and transportation spur it. We... Read More

Equilibrium Staking Levels in a Proof-of-Stake Blockchain

Kose John,Thomas Rivera, Fahad Saleh   May 24,2022

Working Paper No.00076-00

We study the equilibrium level of staking in a Proof-of-Stake blockchain when investors have different trading horizons. We find that,... Read More