UC Irvine

One key role as an economist is to analyze the impact of fiscal and monetary policy. In the following essays, I look at the impact of both types of policy through a theoretical and empirical lens. The first two essay looks at the role of the Federal Reserve as a lender of last resort. Theoretically, I find that the discount window can expand welfare by granting agentsaccess to external liquidity, as well as serve as an outside option for borrowing banks in the interbank market. I then look at COVID, a time when the discount window was heavily, and find that usage of the liquidity facility expands bank lending to consumers and firms in the presence of an unexpected aggregate liquidity shock. Finally, my last essay explores the impact of fiscal policy intervention on counties affected by natural disasters. I find that disaster aid improves local recovery without negative impact to the financial sector. All three chapters shows that the benefits of government intervention outweighs the cost, especially in the event of unexpected shocks.