The transition towards an intangible-intensive economy reshapes financial system by creating a self-perpetuating savings glut in the production sector. As intangibles become increasingly important, firms hoard liquidity to finance investment in intangibles of limited pledgeability. Firms' savings feed cheap leverage...

We develop a dynamic model of platform economy where tokens serve as a means of payments among platform users and are issued to finance investment in platform productivity. Tokens are optimally issued to reward platform owners when the productivity-normalized token...

We develop a dynamic asset pricing model of cryptocurrencies/tokens that allows users to conduct peer-to-peer transactions on digital platforms. The equilibrium value of tokens is determined by aggregating heterogeneous users' transactional demand rather than discounting cash flows, as is done...

A salient trend in crisis intervention has emerged in recent decades: Government and central banks offered funding directly to nonfinancial firms, bypassing banks and other credit intermediaries. We analyze the long-term consequences of such policies by focusing on firm quality...

Under financing frictions, negative shocks have a lasting impact on credit intermediaries' net worth and lending capacity. Anticipating tighter credit-supply conditions and the resulting difficulty in financing ongoing capital growth, firms' current incentives to borrow and create productive capital weaken....

When the value of a pledgeable asset (or project) is uncertain, investors are tempted to examine it. The information cost is ultimately borne by the asset owner, reducing her financing capacity. A pecking order emerges. Debt generates a greater financing...