Research Statement
My research studies how joint macroeconomic policies provide welfare gains to society. Understanding the interdependencies among regulatory policies remains an open area of research with welfare implications. Conflicting effects among policies may lead to over-regulation and disruptions in the credit flow to the real economy. Alternatively, policies decided in isolation may lead to under-regulation, heightened default risk with possibly failures with socially undesirable outcomes. My research agenda is focused on providing a framework to understand policy interdependencies and show how a comprehensive financial regulation collectively advances the efficiency of the financial system. You can find my research statement here.




Financial Regulation and Wealth Distribution
Abstract: Financial regulation provides welfare gains to the society, at the expense of an exacerbated wealth distribution. I show that when capital markets are segmented, financial regulation leads to a transfer of wealth from depositors to equity investors. An integrated monetary and financial regulatory policy achieves welfare gains due to a credit flow expansion to the real sector, while default likelihood within the banking sector remains fixed. Nonetheless, this constrained equilibrium allocation is associated with lower deposit rate while dividends increase, leading to a wealth transfer across market segments. I provide sufficient conditions under which optimal financial regulation leads to welfare gains without exacerbating wealth heterogeneity.



Pay Banks to Lend: Targeted Long-Term Refinancing Operations and the Fiscal Stimulus
Abstract: The aftermath of the financial crisis inherited heightened economic uncertainty and low productivity. These features prompted the banking sectors across the developed economies to rely heavily on excess reserves offered by the central banks despite the negative nominal interest-on-excess-reserve (IOER) policy. Nonetheless, the negative relationship between the overall interest expenses of the banking sector with the IOER around the zero lower bound further exacerbates the over-reliance on excess reserves particularly when rates are negative. This paper shows that the new Targeted Long-Term Refinancing Operations (TLTRO) policy adopted by the central banks leads to expansionary effects when the refinancing lending rates fall below the IOER. I first provide a social welfare maximizing approach to determine the optimal borrowing limit. Second, I show that the policymaker's decision to finance the deficit due to remunerations depends on the trade-offs between the social gains associated with the expansion of lending to the real sector against the social costs of monetary tools (creating money to finance the gap) the fiscal stimulus.