"To Bail-in or to Bailout: that's the (Macro) Question," (2026) with Christiaan van der Kwaak.
Abstract: We construct a dynamic general equilibrium model with limited liability banks to compare macroeconomic outcomes under a regime in which insolvent banks are bailed out by the government with a regime where bank creditors are bailed in. We find that long-run investment, capital, output, and consumption are higher under the bailout regime. However, banks operate with higher leverage ratios, as a result of which the frequency of crises and the number of bank recapitalizations substantially increase with respect to the bail-in economy. Despite more financial fragility, welfare is higher in the bailout economy.
"The time-varying impact of sectoral and aggregate labor market tightness on wage growth," with Marente Vlekke, Siem Jan Koopman, and Rixt Swierstra.
"Fiscal rules in financial crisis economies," with Loes Verstegen.
"Macroeconomic imbalances and monetary policy," with Dennis Bonam, Roben Kloosterman, and Beau Soederhuizen.
"Structural Reforms, Sovereign Default Risk, and the Zero Lower Bound," (2020).
Abstract: In this paper we investigate the interaction between sovereign default risk and structural reforms at the zero lower bound. We do so in a quantitative two country model of a currency union calibrated to the core and periphery of the Eurozone with a tradable-non-tradable production structure and nominal rigidities, where the periphery of the Eurozone is subject to sovereign default risk. In line with the literature, we find that structural reforms, in the form of an increase in price and wage flexibility, lead to output losses at the zero lower bound. Sovereign default risk increases these output losses, and structural reforms further heighten the probability of a sovereign default. We examine whether fiscal policy, both expansionary and contractionary, fares better in such a situation. We find that a fiscal contraction in the country subject to sovereign default risk only slightly decreases the probability of sovereign default and causes another round of output losses. Contrary to previous findings in the literature, we find that a fiscal expansion in the core has small output effects on the periphery. We show that the positive spillover effects of a fiscal expansion in the core are much larger if the core government simultaneously buys the periphery's exports and increases the share of periphery exports in core public expenditure.
"Liability Dollarization, Bank Bail-Ins, and Exchange Rate Dynamics," with Christiaan van der Kwaak.