Using newly matched U.S. defense contract and restricted administrative employment data, we show that the employment effects of defense procurement are costly, concentrated, and slow to diffuse. Employment gains are initially driven by large existing …
This paper provides novel empirical evidence on how political fragmentation shapes the fiscal transmission mechanism. Using data from 16 OECD countries (1978--2019) and narrative accounts to identify exogenous fiscal interventions, we show that when …
We develop a tractable model in which a bank’s deposit franchise shapes its risk-taking response to monetary policy. Banks with more deposit market power (lower deposit betas) see larger franchise gains when rates rise and therefore reduce …
The 1876 Portuguese banking crisis, triggered by a partial default on Spanish bonds, offers a compelling historical case of widespread bank runs in a pre-central bank setting, where no major bank failures occurred despite severe liquidity pressures. …
This paper argues that the exchange rate regime matters for inflation and economic activity, with substantial benefits arising from a currency peg. At the heart of these benefits lies an increase in credibility that reduces the inflationary bias once …
We investigate the pass-through of a temporary value-added tax (VAT) cut on selected food products to consumer prices in Portugal. Exploiting a novel data set of daily online prices, we find that the VAT cut was fully transmitted to consumer prices, …
This paper examines the shifting dynamics in bank funding of nonbank financial institutions (NBFIs) from 1980 to 2024. We document three key facts. First, bank funding to NBFIs has been relatively stable, accounting for, on average, 3.5% of total …
Public procurement accounts for one-third of government spending. In this paper, I document a new mechanism through which government procurement promotes firm growth: firms use procurement contracts to increase cash flow based lending. I use …
We investigate whether joining the European Monetary Union and losing the ability to set monetary policy affected the economic growth of Eurozone countries. We use the synthetic control approach to create a counterfactual scenario for how each …
Using a novel regional database covering over 200 elections in several European countries, this paper provides new empirical evidence on the political consequences of fiscal consolidations. To identify exogenous reductions in regional public …