Market power does more than raise prices: it distorts what firms choose to produce. Firms with market power deliberately degrade the quality of their low-end products to protect high-end sales. This disproportionately harms low-income households, while high-income households may benefit through general equilibrium forces.

Using micro data, I show that older consumers are more reluctant to switch brands. As the population ages, incumbents enjoy a more captive customer base, raising markups and discouraging entry. This demand-side channel accounts for 20–30% of the decline in U.S. business formation and rise in profits over the past four decades.

Using administrative Census data, we show that firms with high labor market power respond less to monetary policy shocks. We build a New Keynesian model with oligopsonistic competition and show that the decline in labor market concentration since the 1980s has amplified the output response to monetary policy by about 50 percent.

Using credit bureau data on 10 million borrowers and the staggered expansion of Medicaid, we show that expanded eligibility increases borrowing. The main driver is credit supply: lenders extend more credit to households who become more financially resilient. The credit-supply channel accounts for about a third of the welfare gains from expanding Medicaid.

We develop a micro-founded model of trade credit in which supplier-to-firm financing creates a credit multiplier along production chains. Using Italian data, we find trade credit substantially amplified the output costs of the Great Recession.

Macroeconomic models typically assume firms set a single unit price. We show that allowing for the quantity-dependent pricing schedules prevalent in the data overturns standard results: markup dispersion across firms is no longer a sign of misallocation. Instead, the key distortion is across consumers within each firm, and the implied welfare losses are five times larger.

We use micro data on the universe of oil fields worldwide to build and estimate a structural model of the oil industry embedded in a general equilibrium model. Fracking firms can adjust production more quickly and at lower cost than conventional producers, weakening OPEC's market power and leading to large long-run declines in the level and volatility of oil prices.

A continuous-time formulation of sovereign default that is faster to solve than discrete-time models and generates more realistic spread volatility through a deleveraging channel.

Standard sovereign default models are calibrated to external debt, which works well for emerging markets but poorly for the European debt crisis. We show that for European economies, total public debt is the relevant state variable for default incentives, and that calibrating to it dramatically improves the model's fit to interest rate spreads.

Ex-post monetary easing after crises need not create moral hazard. When the central bank stabilizes asset prices optimally, the aggregate demand externality that distorts ex-ante borrowing can disappear.