with Gary Gorton
If society progresses in its treatment of minority groups, can corporate cultures do the same? A model of how corporate cultures are determined and whether competition can push regressive ones out of the market.
Bank Net Worth and Frustrated Monetary Policy
R&R, Journal of Financial Economics
A model in which the interest rate channel of monetary policy depends on the state of bank net worth. When banks are flush with equity, the interest rate channel is wide open; when banks have little equity, the channel closes.
Dynamic model of collateral constraints with multiple equilibria. This means asset prices can be self-fulfilling. Price crashes, booms, and leverage cycles transpire purely from investor expectations.
A model of portfolio choice with a punitive government guarantee. Risk-taking actually declines with net worth, unless the fund's failure is imminent, in which case risk increases dramatically.