Working Papers
Corporate Discount Rates (with Niels Joachim Gormsen)
Conditionally accepted, American Economic Review
We assemble new data on firms' discount rates and perceived cost of capital. Time-varying wedges between discount rates and the cost of capital account for low US investment in recent decades.
Website on Cost of Capital and Discount Rates | Barron's Forbes FT Hobart Matt Levine VoxEU BFI Brief
Disaggregated Economic Accounts (with Asger Andersen, Niels Johannesen, Ludwig Straub, and Emil Toft Vestergaard)
Revision requested by Quarterly Journal of Economics
We disaggregate the full circular flow of money (consumption, income, and output) between small subgroups of consumers and producers. The measured flows determine the aggregate and distributional consequences of shocks.
Website on Disaggregated Economic Accounts | Applied by Danish Central Bank BFI Visualization
Firms’ Perceived Cost of Capital (with Niels Joachim Gormsen)
Revision requested by Quarterly Journal of Economics
Cross-sectional variation in firms' perceived cost of capital systematically deviates from expected returns, challenging traditional macro-finance models.
Website on Cost of Capital and Discount Rates
Nominal discount rates are sticky with respect to expected inflation. As a result, real investment demand increases when inflation is high. This mechanism generates monetary non-neutrality and crowds in investment.
Online Supplement | BFI Brief
Green firms report lower perceived cost of capital and discount rates in recent years, concurrent with the rise of "green investing."
Website on Cost of Capital and Discount Rates | 2024 Moskowitz Prize Kellogg Brief BFI Brief
Publications
Tracing the International Transmission of a Crisis Through Multinational Firms (with Marcus Biermann), Journal of Finance
June 2024
Firms transmit crises globally through internal capital markets in a "Darwinist" manner, but are "Socialist" with respect to domestic affiliates.
BFI Brief Booth Review
April 2023
I describe how researchers can estimate spillovers that propagate economic shocks and how to overcome mechanical biases.
BFI Brief Summary Slides Editable Slide Files
July 2021
Increases in bank size can harm borrowers and real growth. Bank managers may enjoy private benefits even when bank efficiency does not improve.
Video Summary | BFI Brief Booth Review Die Zeit | Seminar Villanova Seminar Virtual Econ History Seminar VMACS | Online Appendix
Discrimination, Managers, and Firm Performance: Evidence from “Aryanizations” in Nazi Germany (with Volker Lindenthal and Fabian Waldinger), Journal of Political Economy
September 2021, lead article
Discrimination against senior managers causes large economic losses because qualified individuals are key to firm performance.
BFI Brief Booth Review Cato Institute CentrePiece FAZ Freakonomics Harvard Business Review Manager Magazin ProMarket VoxEU | Online Appendix
The Effect of House Prices on Household Borrowing: A New Approach (with James Cloyne, Ethan Ilzetzki, and Henrik Kleven), American Economic Review
June 2019
Idiosyncratic shocks to house prices affect borrowing of households who face tight borrowing constraints.
Booth Review VoxEU | Online Appendix
Disentangling the Effects of a Banking Crisis: Evidence from German Firms and Counties, American Economic Review
March 2018
The effects of bank lending cuts are exacerbated by general equilibrium effects: demand and innovation spillovers. Employment and output remain persistently depressed even after bank lending has normalized.
Presentation ESRB | BFI Brief Booth Review Die Zeit | Online Appendix