Research

Published (and other available) papers (on RePec) 

• “Optimal Financial Exclusion,” with Erwan Quintin, forthcoming AEJ: Microeconomics.
• “Dealers’ Insurance, Market Structure, and Liquidity,” with Francesca Carapella, forthcoming, Journal of Financial Economics.
• “The Collateral Cost of Clearing,” with Thomas Nellen, forthcoming, Journal of Money Credit and Banking
• “Relationships In The Interbank Market”, (2020) Review of Economic Dynamics 35, 170-191, with Jonathan Chiu and Jens Eisenshmidt.
• “A Theory of Repurchase Agreements, Collateral Re-use, and Repo Intermediation” (2019), Review of Economic Dynamics 33, 30-56 with Vincent Maurin and Piero Gottard
• Rational Opacity ” (2017) Review of Financial Studies 30, December, with Erwan Quintin
  • We study why some corporations are more opaque than they could be.

• Limited disclosure and hidden orders in asset markets (with Erwan Quintin) Journal of Financial Economics, 2017
  • The optimal organization of asset markets is characterized by hidden orders of expert investors and limited disclosure from the originators of assets to induce participation of non-experts. 
• A search-based model of the interbank money market and monetary policy implementation (with Morten Bech) Journal of Economic Theory, 2016 
  • A simple model to understand the effects of monetary policy implementation, including large excess reserves, on the interbank market.
• Monetary Emissions Trading Mechanisms (with Ted Temzelides) International Journal of Game Theory, 2016
  • We use insights from dynamic mechanism design in monetary economics to derive properties of optimal dynamic emissions trading mechanisms. 
• Private Money and Banking Regulation (with Daniel Sanches) Journal of Money, Credit, and Banking, 2015
  • How to regulate banking to achieve an efficient supply of liquidity?

• Efficient Contract Enforcement (with Thor Koeppl and Erwan Quintin) Economic Theory, 2014
  • When the choice of institutions is endogenous what is the impact of inequality on the quality of institutions and ultimately on growth. 

• Endogenous Credit Cycles (with Chao Gu, Fabrizio Mattesini and Randy Wright) Journal of Political Economy, 2013
  • How endogenous credit limit can create exotic and interesting dynamics. 

• Banking: A new monetarist approach (with Chao Gu, Fabrizio Mattesini and Randy Wright) Review of Economic Studies, 2013
  • A mechanism approach to banking that emphasizes limited commitment.
• The Impact of Unconventional Monetary Policy on the Overnight Interbank Market (with Morten Bech)  Reserve Bank of Australia 2013 Annual Conference Volume on “Liquidity and Funding Markets”
  • We review different models of the overnight interbank market in light of the recent unconventional monetary policy. 
• Money Talks (with Marie Hoerova and Ted Temzelides) Economic Letters, 2012
  • We study credible information transmission by a benevolent short-lived central bank. Information transmission through monetary policy creates a distortion, thus, lending credibility. 
• Central Counterparty Clearing and Systemic Risk Insurance in OTC Derivatives Markets (with Thor Koeppl) Revue d’Economie Financiere – The Unregulated Finance – 2012
  • We argue that CCP clearing derivatives should require contributions to a systemic risk funds which goes beyond the standard collateral requirements (default funds, initial and variation margins). 

Unpublished papers

• A Theory of Repurchase Agreements, Collateral Re-Use and Repo Intermediation (with Piero Gottardi and Vincent Maurin)
  • We show that repurchase agreements (repos) arise as the instrument of choice to borrow in a competitive model with limited commitment. In equilibrium, lenders choose to re-use collateral. This increases the circulation of the asset and generates a “collateral multiplier” effect. Intermediation by dealers may endogenously arise in equilibrium, with chains of repos among traders. 
• The Emergence and Future of Central Counterparties (with Thor Koeppl)
  • We present a model of central counterparty clearing and derive some policy implications if regulations are put in place. 
• Why Rent When You Can Buy : A Theory of Repurchase Agreements (with Borghan Narajabad)
  • We show that repos are redundant in Walrasian markets. With bilateral trading, repos help restore efficiency. We obtain testable results on prices and market volumes. 
• Endogenous adverse selection, market discipline, and central bank lending (with Marie Hoerova)What is the role of a central bank when market discipline is effective?