We provide novel empirical evidence that firms' investment is more responsive to monetary
policy when a higher fraction of their debt matures. In a heterogeneous firm New Keynesian …

This paper provides a survey of the trade-off theory of corporate capital structure. First we
provide an analysis of an equilibrium version of the theory. The firm raises debt from an …

Using firm-level data from high-and middle-income European countries, I document
significant differences in firms' access to finance over their life cycles and across countries …

Premiums on US sovereign credit default swaps (CDS) have risen to persistently elevated
levels since the financial crisis. We examine whether these premiums reflect the probability …

Business credit lags GDP growth by about one year. This contributes to high leverage during
recessions and slow deleveraging. We show that a model in which firms use risky long-term …

Capital structure has been a defining intellectual puzzle in corporate finance since
Modigliani and Miller (1958). 1 Are capital structure decisions worth worrying about? If we …

We revisit evidence of real effects of uncertainty shocks in the context of interest rate
uncertainty. We document that adverse movements in interest rate uncertainty predict …

The majority of bank liabilities are deposits typically not withdrawn for extended periods. We
propose a dynamic model of banks in which depositors forecast banks' leverage and default …

We introduce long-term debt and a maturity choice into a dynamic model of production, firm
financing, and costly default. Long-term debt saves roll-over costs but increases future …

I develop a dynamic model of financing decisions and optimal debt maturity choice in which
creditors face adverse selection and learn about the firm's quality from news. In equilibrium …