This chapter studies how incomplete information helps accommodate frictions in
coordination, leading to novel insights on the joint determination of expectations and …

We develop a tractable model of systemic bank runs. The market‐based banking system
features a two‐layer structure: banks with heterogeneous fundamentals face potential runs …

What is the effect of Central Bank Digital Currency (CBDC) on financial stability? We answer
this question by studying a model of financial intermediation with an endogenously …

This paper provides, for the first time, large-scale evidence that liquidity transformation by
banks creates fragility, as their uninsured depositors face an incentive to withdraw their …

What is the effect of Central Bank Digital Currency (CBDC) on financial stability? We answer
this question by studying a model of financial intermediation with remunerated CBDC as …

We propose a model of the financial system in which banks are individually prone to runs
and connected through fire sales. Strategic complementarities within and across banks …

This paper studies the equilibrium effect of public liquidity on financial crises. Banks borrow
from households via insured deposits and partially runnable debt, and suffer endogenous …

This paper studies a major financial panic, the run on the German banking system in 1931,
to distinguish between banking theories that view depositors as demanders of liquidity and …

We show that the correlation across financial institutions is a major force that increases their
overall fragility. Our model features a financial system with banks individually prone to runs …

We study the run on the German banking system in 1931 to understand whether depositors
anticipate which banks will fail in a major financial crisis. We find that deposits decline by …