"Group Affiliation, Implicit Guarantees and the Cost of Borrowing" abstract This paper investigates the effect of group affiliation on credit spreads of firm’s public debt. We analyse all the firms issuing publicdebt on the US Primary and Secondary market from 1980 until 2006, by comparing business groups and independent firms new issuances. Theresults show that controlled firms…

"Labor Relations, Endogenous Dividends and the Equilibrium Term Structure of Equity" abstract Leading asset pricing models are inconsistent with the recent empirical findings which document downward sloping term structures of equity risk and premia. This paper shows that a simple general equilibrium model can accommodate the stylized facts about dividend strips as long as dividend distributions endogenously obtain…

"Labor and Finance: Mortensen and Pissarides meet Holmstrom and Tirole" abstract In real life labor markets firms hold at all times a variety of liquid assets not invested in their core business. Such external use of funds acts as an insurance against future adverse financial shocks, and typically varies across firms and sectors. As a…

"Seven ways to knit your portfolio: can familiarity explain the gender gap in finance?" abstract We investigate whether the gender gap in measured financial literacy, risk attitudes and portfolio choice may be affected by a gender gap in familiarity with the language and product supply in the life cycle saving and investing industry. Familiarity is…

"Optimal monetary policy with counter-cyclical credit spreads" Abstract We study the consequences for monetary policy design of including deep habits in credit markets into the benchmark New-Keynesian DSGE model. Under deep habits, monopolistically competitive banks set lending rates in a forward-looking fashion: they internalize the fact that, due to habits in banking (which are meant…

"International Capital Flows, Financial Frictions and Welfare" abstract The connection between the financial crisis of 2007-08 and global imbalances is controversial. We argue that the main reason why the relationship may be in place is due to the existence of financial frictions in domestic credit markets. We rationalize this point of view by developing a…

"Screening as a Unied Theory of Delinquency,Renegotiation, and Bankruptcy"