Pablo D’Erasmo
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View article: Market Concentration in Fintech
Market Concentration in Fintech Open
This paper discusses concentration in consumer credit markets with a focus on fintech lenders and residential mortgages.We present evidence that shows that concentration among fintech lenders is significantly higher than that for bank lend…
View article: Capital Buffers in a Quantitative Model of Banking Industry Dynamics
Capital Buffers in a Quantitative Model of Banking Industry Dynamics Open
We develop a model of banking industry dynamics to study the quantitative impact of regulatory policies on bank risk taking and market structure as well as the feedback effect of market structure on the efficacy of policy.Since our model i…
View article: Capital Buffers in a Quantitative Model of Banking Industry Dynamics
Capital Buffers in a Quantitative Model of Banking Industry Dynamics Open
We develop a model of banking industry dynamics to study the quantitative impact of regulatory policies on bank risk taking and market structure.Since our model is matched to U.S. data, we propose a market structure where big banks with ma…
View article: Replication Package for: Reorganization or Liquidation: Bankruptcy Choice and Firm Dynamics
Replication Package for: Reorganization or Liquidation: Bankruptcy Choice and Firm Dynamics Open
This package contains the code necessary to reproduce tables and figures in Corbae, Dean, and Pablo D'Erasmo "Reorganization or Liquidation: Bankruptcy Choice and Firm Dynamics" Review of Economic Studies. Detailed instructions are also gi…
View article: Reorganization or Liquidation: Bankruptcy Choice and Firm Dynamics
Reorganization or Liquidation: Bankruptcy Choice and Firm Dynamics Open
In this paper, we ask how bankruptcy law affects the financial decisions of corporations and its implications for firm dynamics. According to current U.S. law, firms have two bankruptcy options: Chapter 7 liquidation and Chapter 11 reorgan…
View article: Rising Bank Concentration
Rising Bank Concentration Open
Concentration of insured deposit funding among the top four commercial banks in the U.S. has risen from 15% in 1984 to 44% in 2018, a roughly three-fold increase.Regulation has often been attributed as a factor in that increase.The Riegle-…
View article: Relationship Networks in Banking Around a Sovereign Default and Currency Crisis
Relationship Networks in Banking Around a Sovereign Default and Currency Crisis Open
We study how banks' exposure to a sovereign crisis gets transmitted onto the corporate sector.To do so we use data on the universe of banks and firms in Argentina during the crisis of 2001.We build a model characterized by matching frictio…
View article: History Remembered: Optimal Sovereign Default on Domestic and External Debt
History Remembered: Optimal Sovereign Default on Domestic and External Debt Open
Infrequent but turbulent overt sovereign defaults on domestic creditors are a "forgotten history" in macroeconomics.We propose a heterogeneous-agents model in which the government chooses optimal debt and default on domestic and foreign cr…
View article: Banking Regulation with Risk of Sovereign Default
Banking Regulation with Risk of Sovereign Default Open
Banking regulation routinely designates some assets as safe and thus does not require banks to hold any additional capital to protect against losses from these assets.A typical such safe asset is domestic government debt.There are numerous…
View article: Capital Requirements in a Quantitative Model of Banking Industry Dynamics
Capital Requirements in a Quantitative Model of Banking Industry Dynamics Open
We develop a model of banking industry dynamics to study the quantitative impact of capital requirements on bank risk taking, commercial bank failure, and market structure. We propose a market structure where big, dominant banks interact w…
View article: History Remembered: Optimal Sovereign Default on Domestic and External Debt
History Remembered: Optimal Sovereign Default on Domestic and External Debt Open
Infrequent but turbulent overt sovereign defaults on domestic creditors are a "forgotten history" in Macroeconomics.We propose a heterogeneous-agents model in which the government chooses optimal debt and default on domestic and foreign cr…
View article: Reorganization or Liquidation: Bankruptcy Choice and Firm Dynamics
Reorganization or Liquidation: Bankruptcy Choice and Firm Dynamics Open
In this paper, we ask how bankruptcy law affects the financial decisions of corporations and its implications for firm dynamics.According to current U.S. law, firms have two bankruptcy options: Chapter 7 liquidation and Chapter 11 reorgani…
View article: Reorganization or Liquidation: Bankruptcy Choice and Firm Dynamics
Reorganization or Liquidation: Bankruptcy Choice and Firm Dynamics Open
In this paper, we ask how bankruptcy law affects the financial decisions of corporations and its implications for firm dynamics.According to current U.S. law, firms have two bankruptcy options: Chapter 7 liquidation and Chapter 11 reorgani…
View article: Optimal Domestic (and External) Sovereign Default
Optimal Domestic (and External) Sovereign Default Open
Infrequent but turbulent episodes of outright sovereign default on domestic creditors are considered a "forgotten history" in macroeconomics.We propose a heterogeneousagents model in which optimal debt and default on domestic and foreign c…
View article: Distributional Incentives in an Equilibrium Model of Domestic Sovereign Default
Distributional Incentives in an Equilibrium Model of Domestic Sovereign Default Open
Europe's debt crisis resembles historical episodes of outright default on domestic public debt about which little research exists.This paper proposes a theory of domestic sovereign default based on distributional incentives affecting the w…
View article: Optimal Domestic (and External) Sovereign Default
Optimal Domestic (and External) Sovereign Default Open
Infrequent but turbulent episodes of outright sovereign default on domestic creditors are considered a “forgotten history” in Macroeconomics. We propose a heterogeneous-agents model in which optimal debt and default on domestic and foreign…
View article: Replication data for: Market Exposure and Endogenous Firm Volatility over the Business Cycle
Replication data for: Market Exposure and Endogenous Firm Volatility over the Business Cycle Open
We propose a theory of endogenous firm-level risk over the business cycle based on endogenous market exposure. Firms that reach a larger number of markets diversify market-specific demand shocks at a cost. The model is driven only by total…
View article: Market Exposure and Endogenous Firm Volatility over the Business Cycle
Market Exposure and Endogenous Firm Volatility over the Business Cycle Open
We propose a theory of endogenous firm-level risk over the business cycle based on endogenous market exposure. Firms that reach a larger number of markets diversify market-specific demand shocks at a cost. The model is driven only by total…
View article: What is a Sustainable Public Debt?
What is a Sustainable Public Debt? Open
The question of what is a sustainable public debt is paramount in the macroeconomic analysis of fiscal policy. This question is usually posed as asking whether the outstanding public debt and its projected path are consistent with those of…