Job Market Paper
Do Physical Bank Branches Still Matter? Real Effects of Bank Branch Closures in Brazil; with Razvan Vlaicu
Abstract: As more banking services can be delivered remotely, does local physical bank presence still matter for local economic activities? We study this question in Brazil, where bank branch numbers peaked in 2014 and then declined through several years of large-scale closures. Using municipality-level data from 2011–2021, we exploit strategic branch-network contractions across large banks to study two margins of local branch contraction: broader reductions in local branch supply and the loss of the only local branch, using a Bartik IV and staggered DiD, respectively. Broader contractions reduce active firms and shift business composition away from micro firms. Losing the only local branch produces more gradual effects: earnings dispersion falls earlier, while tax revenue and local economic activity decline more strongly several years after closure. Overall, the results show that physical bank branches continue to matter for local economies, but their effects differ across margins of branch contraction and unfold over time.
Publication
The Effects of Financial Structures to Increase Social Drivers of Health Investments in Medicaid: A Simulation Approach, with Pinar Karaca-Mandic and Richard T. Thakor. American Journal of Public Health 116, no. S3 (July 1, 2026): S210–S217. [Acess here]
Abstract: We explore and quantify the potential effects of financial innovations aimed at increasing investments in social drivers of health (SDH). We built a simulation model in which individuals in a health care market are served by multiple Medicaid managed care organizations (MCOs). In our model, each MCO can spend money to make SDH investments that improve patient health and reduce costs to the MCO, but patients can switch between different MCOs. While SDH investments improve patient health and increase the profitability of the investing MCO, the benefits also accrue to noninvesting MCOs because of the churn of patients between MCOs, resulting in a “wrong-pocket problem” where investing MCOs bear the costs but share the benefits with competitors, resulting in worse financial returns compared with making no investments and ultimately disincentivizing SDH investments. Outcomes can be improved when all MCOs participate in a financial structure—an SDH bond—which raises money from investors and distributes the proceeds to MCOs to make SDH investments. An SDH bond can improve patient health and increase profits for MCOs because of cost savings.
Work In Progress
Recipient Control over the Timing of Cash Transfers; with Francis Annan, Jason Kerwin, Naureen Karachiwalla
The Role of Inflation Expectations in Household Decision-making in Ghana
*Background pictures are taken from the Liwonde National Park, Malawi in 2024/6.