Research

Publications:

• Teaching Production with SimCity BuildIt, Journal of Economics Teaching, forthcoming.

• Bank Bailouts: Cost of Inability to Commit, Journal of Mathematical Economics, Volume 111, April 2024, 102939. (Best Paper In Financial Institutions Track at Southwestern Finance Association Conference 2020)

• Monetary and Fiscal Coordination in Preventing Bank Failures and Financial Contagion, Journal of Macroeconomics, Volume 75, March 2023, 103498.

• The Optimal Bailout Policy in an Interbank Network, Economics Letters, Volume 216, July 2022, 110628 .

Working Papers:

• The Bailout Incentive on Excessive Risk-taking Behavior in Banks

Abstract: This paper reinforces a common opinion that bank bailouts create moral hazard by showing that bailouts foster excessive risk-taking behavior in banks. However, restricting bailouts altogether is also suboptimal as it forces banks to be overly conservative and forego the benefit that comes from the higher expected returns from risky investments. Therefore, restricting bailouts does not always dominate allowing bailouts and vice versa. However, allowing bailouts can become constrained efficient if implemented together with appropriate Pigouvian taxes. Additionally, if bailout policies can be precommitted ex ante, allowing bailouts can also be constrained efficient. Lastly, the existence of a large bank in the economy can be beneficial or harmful to the economy depending on the size of the large bank.

Works in Progress:

• Predicting Bank Failures Using Recurrent Neural Networks

• Opacity, Bailout, and Bank Fragility (with Ryuichiro Izumi)

• Bank Runs with Heterogeneous Depositors: Should Deposit Insurance Coverage be Expanded?

• Credit Card Swipe Fees and Benefits as Regressive Taxation