The Finance Uncertainty Multiplier
We show how real and financial frictions amplify the impact of uncertainty shocks. We build a model with real frictions, and find adding financial frictions roughly doubles the impact of [...]
Banking on Deposits: Maturity Transformation without Interest Rate Risk
We show that maturity transformation does not expose banks to significant interest rate risk—it actually hedges banks' interest rate risk. We argue that this is driven by banks' deposit franchise. [...]