We measure how cuts to public procurement propagate through the banking system in a financial crisis. During the European sovereign debt crisis, the Portuguese government cut procurement spending by 4.3 percent of GDP. We find that this cut saddled banks with nonperforming loans from government contractors, which led to a persistent reduction in credit supply to other firms. We estimate a bank-level elasticity of credit supply with respect to procurement demand of 2.5. In a general equilibrium model, our findings point to large effects of fiscal policy on credit supply and output in a crisis. (JEL E23, E44, E62, G01, G21, H57)

We argue that the fiscal multiplier of government purchases increases with the size of the spending shock: more expansionary government spending shocks generate larger multipliers and more contractionary shocks generate smaller multipliers. We empirically document this pattern across time, countries, and modes of financing. We propose a neoclassical mechanism that hinges on the relationship between fiscal shocks, their form of financing, and the response of labor supply across the wealth distribution. An incomplete markets model predicts that the aggregate labor supply elasticity increases with the spending shock, and this holds regardless of whether shocks are deficit-or balanced-budget financed. We show that this mechanism survives the introduction of nominal price rigidities and find evidence for it using micro-data for the US.

Large-scale debt forbearance is a key policy tool during crises, yet targeting is challenging due to information asymmetries. Using transaction-level data from a Portuguese bank during COVID-19, we find that financially fragile households are more likely to enter forbearance, irrespective of income shocks. Mortgage payment suspension increases consumption and savings, but effects differ across households. Low liquid wealth and income are associated with a higher marginal propensity to consume. Additionally, ineligible households accessing forbearance show a higher propensity to consume than eligible ones. Our results suggest that observable household characteristics can help in the design of effective debt relief policies.

We show cash windfalls affect the real economy by spurring entrepreneurship. We identify these effects using the Spanish Christmas Lottery, which provides a unique setting as prizes are geographically concentrated and distributed among thousands of households. We find higher start-up entry, job creation, and self-employment in winning regions. Consistent with a financial constraints channel, results are strongest in sectors relying on external finance and regions with limited credit access. Newly created firms are larger, more profitable, and survive longer. For existing firms, however, growth and profitability do not respond to lottery awards, but wages increase due to tighter labor markets.

O Transtorno do Espectro Autista (TEA) é uma condição neurocomportamental complexa que afeta a comunicação, interação social e comportamento. A Análise do Comportamento Aplicada (ABA) tem sido uma das estratégias mais estudadas e aplicadas para a intervenção no autismo. Esta revisão foca na eficácia da ABA como uma abordagem terapêutica. A ABA é uma abordagem baseada em evidências, que utiliza princípios de reforço positivo e comportamental para moldar comportamentos desejados, ensinar novas habilidades e reduzir comportamentos problemáticos. Estudos têm consistentemente mostrado que a ABA pode ser eficaz na melhoria de habilidades sociais, linguagem, habilidades acadêmicas, habilidades adaptativas e redução de comportamentos desafiadores em indivíduos com TEA. Esta revisão analisa múltiplos estudos que destacam a eficácia da ABA em diferentes faixas etárias, níveis de gravidade do TEA e contextos de intervenção. Descobertas indicam que intervenções precoces, intensivas e individualizadas baseadas na ABA tendem a oferecer os melhores resultados, especialmente quando aplicadas durante a primeira infância. Além disso, questões éticas e a acessibilidade a esses serviços são abordadas, destacando a importância de considerar a individualidade de cada pessoa com TEA e de garantir a acessibilidade de intervenções baseadas na ABA para um espectro diversificado de indivíduos. Essa revisão reforça a importância da ABA como uma das abordagens terapêuticas eficazes no tratamento do autismo, embora ressalte a necessidade de pesquisa contínua, adaptação de técnicas e considerações éticas para aprimorar a eficácia e a acessibilidade dessas intervenções.

We estimate the indirect costs of financial distress due to lost sales by exploiting real estate (RE) shocks and cross-supplier variation in RE assets and leverage. We show that for the same client buying from different suppliers, the client's purchases from distressed suppliers decline by an additional 13% following a drop in local RE prices. The effect is more pronounced in more competitive industries, manufacturing, durable goods, less-specific goods, and when the costs of switching suppliers are low. Our results suggest that clients reduce their exposure to suppliers in financial distress.

We estimate the economic impact of climate change by exploiting variation in local temperature across suppliers of the same client. We find that suppliers experiencing a 1°C increase in average daily temperature decrease their sales by 2%. The effect is more pronounced among suppliers in manufacturing and heat-sensitive industries, which is consistent with lower labor productivity and supply when temperatures are higher. Financially constrained suppliers are more affected due to their lack of financial flexibility to adapt to changes in temperatures. We also find that episodes of extremely hot and cold weather lead to large drops in sales.

We show that production networks are important for the transmission of unconventional monetary policy. Firms with bonds eligible for purchase under the European Central Bank's Corporate Sector Purchase Program act as financial intermediaries by extending additional trade credit to their customers. The increase in trade credit is pronounced from core countries to periphery countries and for financially constrained customers. Customers then increase investment and employment in response to the increased trade financing, whereas suppliers expand their customer base, contributing to upstream industry concentration. Our findings suggest that trade credit redistributes the effects of monetary policy across regions and firms.

We show that credit rating agencies can influence political elections. We find that incumbent political parties experience an increase in their vote shares following municipal bond upgrades. The evidence is consistent with rating agencies affecting elections indirectly by expanding local governments’ debt capacity and directly through an impact on voters’ perceptions of the quality of incumbent politicians. To identify these effects, we examine election outcomes within neighboring counties by exploiting exogenous variation in municipal bond ratings due to Moody’s recalibration of its scale in 2010.

Purpose In the macroeconomic environment of the Iberian Peninsula, this paper aims to understand which factors, intrinsic to management, affect the performance of wine companies. Design/methodology/approach The sample comprises 3,113 wine Iberian companies between 2011 and 2018. This study has used the panel data methodology, specifically the generalized method of moments system estimation method of Arellano and Bond (1991); Arellano and Bover (1995); and Blundell and Bond (1998) to test the hypotheses proposed. Findings Using return on assets (ROA) and sales growth as measures of corporate performance, this study's results suggest that sales growth is the variable that has the most significant determining factors, both specific to the company and given the macroeconomic environment. Investors and civil society well understand the meaning of sales growth, namely, in a sector close to the final consumer. When using ROA as a dependent variable, the results suggest that because it is a pure management variable, the manager tends to be more concerned with maintaining adequate levels of economic profitability to ensure sustainability and future solvency, without giving prominence to the macroeconomic environment. Originality/value To the best of the authors' knowledge, this is the first time that a study has been carried out in the Iberian Peninsula on the wine industry using ROA and sales growth as measures of corporate performance. This study shows that sales growth is a measure traditionally known to external stakeholders, and to that extent, its determining factors are the variables that these players most value in the market.

We estimate the effect of cash windfalls arising from the Spanish Christmas Lottery on entrepreneurship. This lottery provides a unique setting as prizes are geographically concentrated and distributed among thousands of households. We find that lottery prizes lead to higher firm creation, startup job creation, and self-employment. The entrepreneurial response is more pronounced in regions with poorer access to finance. Firms created in winning provinces are larger, more profitable, and more likely to survive longer. Incumbent firms in winning provinces do not benefit but increase wages, suggesting a local labor market tightening. Our results suggests that regional cash windfalls can have long-lasting effects on business activity. JEL classification: D14, G30, L26

We show that FinTech lending affects credit markets and real economic activity using a unique data set of a Peer-to-Business platform for which we have the universe of loan applications. We find that FinTech serves high quality and creditworthy small businesses who already have access to bank credit. Firms use FinTech to obtain long-term unsecured loans and reduce their exposure to banks with less liquid assets, stable funds, and capital. We find that access to FinTech spurs firm growth, employment and investment relative to firms that get their loan application rejected. In addition, firms with access to FinTech increase leverage and substitute long-term bank debt with FinTech debt. Our findings suggest that FinTech allows firms to preserve financial flexibility, reduce their bank dependence and exposure to banking shocks.

Given the potential for agency conflicts in delegated asset management, and the constant push for disclosure by regulators, we examine a clear potential source of agency conflicts in the mutual fund industry: anonymously managed mutual funds. Using a global sample of mutual funds, we find that 17% of funds worldwide, excluding the US, and 22% of emerging market funds do not disclose the names of their management team. Anonymously managed funds significantly underperform, have lower active share, return gap, tracking error, and higher r2 than funds with named managers. They are more frequent in families with cooperative structures, and in bank affiliated funds. Further examining fund performance and activity around changes in SEC disclosure regulation, we find that both performance and fund activity increases following new regulation that required disclosure of manager names. This is important, as it provides evidence that the underperformance of anonymous teams is related to the disincentive brought on by anonymous management, and not solely due to less skilled managers being kept anonymous.

Following the Great Recession, many European countries implemented fiscal consolidation policies aimed at reducing government debt. Using three independent data sources and three different empirical approaches, we document a strong positive relationship between higher income inequality and stronger recessive impacts of fiscal consolidation programs across time and place. To explain this finding, we develop a life-cycle, overlapping generations economy with uninsurable labor market risk. We calibrate our model to match key characteristics of a number of European economies, including the distribution of wages and wealth, social security, taxes and debt, and study the effects of fiscal consolidation programs. We find that higher income risk induces precautionary savings behavior, which decreases the proportion of credit-constrained agents in the economy. Credit-constrained agents have less elastic labor supply responses to fiscal consolidation achieved through either tax hikes or public spending cuts, and this explains the relationship between income inequality and the impact of fiscal consolidation programs. Our model produces a cross-country correlation between inequality and the fiscal consolidation multipliers, which is quite similar to that in the data.

We examine the effects of FinTech lending on firm policies using proprietary data on loan applications and loans granted from a peer-to-business platform. We find that FinTech serves high quality and creditworthy small businesses who already have access to bank credit. Firms access FinTech to obtain long-term unsecured loans and reduce their exposure to banks with less liquid assets, stable funds, and capital. We find that firms with access to FinTech loans significantly increase investment, employment, and sales growth relative to firms that get their loan application rejected. We identify these effects by exploiting the number of banks in each a municipality as a source of exogenous variation in the probability of obtaining a FinTech loan. Our findings suggest that FinTech allows firms to improve their financial flexibility and reduce bank dependence.

We study the performance persistence of quantitative actively managed US equity funds. We show that the persistence of quantitative funds originates from poor performers and that there are reversals at the top of the performance scale, which is no different from the widely accepted evidence in the mutual fund literature. When testing for differences in performance persistence between quantitative and non–quantitative funds, we find no differences for poorly performing funds, but we observe significantly more reversals for quantitative funds at the top of the performance distribution. We also find that the differences in performance persistence are not explained by differences in flow–induced incentives to generate alpha, as there is no heterogeneity in investors preferences when allocating capital to these funds. Overall our results are consistent with machines having less skill than their human counterparts.

We use data from 33 countries to study how a fund’s affiliation with large families shapes the flow–performance relationship internationally. Our results show that the effect of family size on the fund flows’ response to performance depends on the sophistication of investors in a country. While less sophisticated investors are persuaded by the great visibility and strategies of funds that are affiliated with large and established families, more sophisticated investors are not. Affiliation with a large family increases the convexity of the flow–performance relationship in countries where investors are less sophisticated, but decreases this convexity in countries with more sophisticated investors. These results are important for investors, mutual fund companies and regulators because the flow–performance sensitivity determines the assets under management, the level of fees, risk–taking, and the performance of the fund.