• Publications
  • Influence
Zombie Lending and Depressed Restructuring in Japan
In this paper, we propose a bank-based explanation for the decade-long Japanese slowdown following the asset price collapse in the early 1990s. We start with the well-known observation that mostExpand
  • 1,016
  • 126
  • PDF
Consumption puzzles and precautionary savings
Abstract When marginal utility is convex, agents accumulate savings as a precautionary measure against labor-income eventualities. This paper shows that precautionary savings can go a long way inExpand
  • 519
  • 59
The Cleansing Effect of Recessions
This paper investigates the response of industries to cyclical variations in demand in the context of a vintage model of ?creative destruction.? Due to process and product innovation, productionExpand
  • 954
  • 58
International and Domestic Collateral Constraints in a Model of Emerging Market Crises
We build a model of emerging markets crises which features two types of collateral constraints. Firms in a domestic economy have limited borrowing capacity from international investors. They alsoExpand
  • 717
  • 50
  • PDF
Collective Risk Management in a Flight to Quality Episode
We present a model of optimal intervention in a flight to quality episode. The reason for intervention stems from a collective bias in agents' expectations. Agents in the model make risk managementExpand
  • 631
  • 48
  • PDF
On the Sign of the Investment-Uncertainty Relationship
Understanding the effects of uncertainty over any decision variable has fascinated economists for a long time. Risk aversion and incomplete markets are likely to make the investment-uncertaintyExpand
  • 625
  • 46
Plant-Level Adjustment and Aggregate Investment Dynamics
THE EMPIRICAL INVESTMENT literature is full of disappointments. From time to time waves of new ideas challenge the aggregate investment equation, but these challenges are rarely successful, andExpand
  • 508
  • 41
Irreversibility and Aggregate Investment
Investment is often irreversible, in that installed capital has little or no value unless used in production. In the presence of ongoing uncertainty, an individual firm's irreversible investmentExpand
  • 453
  • 36
  • PDF
Aggregate Investment
The 90s have witnessed a revival in economists' interest and hope of explaining" aggregate and microeconomic investment behavior. New theories, better econometric" procedures, and more detailedExpand
  • 279
  • 35
  • PDF
The Safety Trap
In this article, we provide a model of the macroeconomic implications of safe asset shortages. In particular, we discuss the emergence of a deflationary safety trap equilibrium with endogenous riskExpand
  • 259
  • 35
  • PDF