Department of Economics
2211 Campus Drive,
Evanston, IL 60208
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Ph.D., Economics, Northwestern University, 2019 (expected)
M.A., Economics, Northwestern University, 2015
B.A., Economics, Macalester College, 2013
B.A., Applied Mathematics and Statistics, Macalester College, 2013
Primary Fields of Specialization
Finance and Macroeconomics
Secondary Fields of Specialization
Household Finance, Monetary Economics, Real Estate, and International Finance
Job Market Paper
The Impact of Debt Relief Generosity and Liquid Wealth on Household Bankruptcy (PDF)
The debt relief households obtain in bankruptcy provides insurance against wealth losses, but also distorts borrower incentives to repay debt, discouraging lending. Understanding how bankruptcy filings respond to changes in cash-flows and “strategically” to relief generosity is important for assessing these trade-offs. This paper presents new evidence on the causes of bankruptcy using data on millions of mortgage borrowers. First, I exploit a kink in debt relief generosity induced by asset exemption laws in a regression kink design (RKD) to estimate a small, positive effect of an increase in generosity on filing. Second, I exploit quasi-experimental variation in mortgage payment reductions to estimate a large negative effect of an increase in cash-flows on filing. The RKD isolates the strategic motive by holding wealth fixed and varying the payoff from filing while the payment reductions affect filing by increasing cash-flows that are not generally seizable in bankruptcy. Using a simple model of household bankruptcy, I show that the relatively weak strategic motive implies that consumption gains to filers must be large but that other costs of bankruptcy, such as social stigma or from credit market exclusion, must also be large. My findings are consistent with a lack of insurance against cash-flow shocks driving bankruptcy and imply that increases in the generosity of bankruptcy only weakly incentivize further filing.
Financial Crises and the Transmission of Monetary Policy to Consumer Credit Markets (PDF)
This paper explores one channel through which financial crises can alter the strength of the credit channel of monetary policy. Analyzing microdata on the universe of US credit unions and exploiting plausibly exogenous variation in exposure to ABS markets, I find that asset losses among lenders increase the sensitivity of their lending to the policy rate. A 10 basis point fall in the two-year Treasury yield generates a 0.86 percentage point increase in quarterly lending growth when assets are unchanged. However, the same policy rate change leads to a 1.15 percentage point increase for a credit union experiencing a one standard deviation asset loss. This is a more than 20% difference relative to median lending growth. Additionally, a 10 basis point policy rate reduction lowers the effect of a one standard deviation asset loss from a 3.20 to 2.91 percentage point decrease in lending growth. These findings suggest that monetary easing is more potent among lenders with recently weakened balance sheets and there exists an additional benefit of monetary easing which reduces the contractionary effect of asset losses.
Bad News Bankers: Underwriter Reputation and Contagion in Pre-1914 Sovereign Debt Markets (PDF)
This paper uses new data on the timing of sovereign defaults during 1869-1914 to quantify an informational channel of contagion via shared financial intermediaries. Concerns over reputation incentivized Britain’s merchant banks to monitor, advise, and occasionally bail out sovereigns. Default signaled to investors that a merchant bank was not as willing or able to write and support quality issues, suggesting that its other bonds may underperform in the future. In support of this channel, I find that during a debt crisis, a 5% fall in the defaulting bond’s price leads to a 2.19% fall in prices of bonds sharing the defaulter’s bank. This is substantial compared to the 0.24% price drop among bonds with different banks. Information revelation about financial intermediaries can be a powerful source of contagion unrelated to a borrower’s fundamentals. In modern financial markets, third parties such as credit rating agencies, the IMF, or the ECB could similarly spread contagion if news about their actions reveals information about their willingness to monitor risky borrowers or intervene in crises.
Work in Progress
Rural Urban Income Inequality: The Role of Gender Norms (with Paul Mohnen)