Oliver Giesecke

Ph.D. Candidate in Finance and Economics

Columbia University


Ph.D. Candidate in Finance and Economics,

Columbia University,

o.giesecke [@] columbia.edu

WORKING PAPERS

“The Bond Lending Channel of Monetary Policy” (with Olivier Darmouni and Alexander Rodnyansky)

Corporate bond markets are a growing source of funding for companies throughout the world. How does a firm's debt structure affect the transmission of monetary policy? This paper sheds light on a new corporate finance mechanism in which monetary policy disproportionately impacts market-financed firms as bonds have higher downside risks relative to bank loans. We present high-frequency evidence consistent with this channel in the euro area: firms with more bonds are more affected by surprise monetary actions than their counterparts. This finding stands in contrast to a standard bank lending channel and suggests a key role for bond markets in monetary transmission.

Finalist European Central Bank Young Economist Competition 2021

Presented at: EPR ESSIM 2021, CEPR and Bank of Finland Joint Conference on Monetary Policy Tools and Their Impact on the Macroeconomy, SED 2021, EFA 2020, 9th MoFiR Workshop on Banking, SFS Cavalcade 2020, CFM London Macro Workshop, Bocconi, University of Cambridge, Columbia Business School, LMU Munich, and NYU Stern, Georgetown University.

“Zombie Cities” (with Haaris Mateen)

We document the secular decline in the financial health of cities in the United States; most of the decline originates from the accumulation of legacy obligations, that is, pensions and other post-employment benefits (OPEBs). We find that some cities operate with a negative net position and call them--in analogy to the corporate finance literature--“Zombie Cities”.

For causal identification of the implications of a fiscal shock we utilize quasi-experimental variation in the year of property tax assessments in the state of Connecticut. We find that local governments adjust tax rates to maintain stable tax revenues; there is no change in public employment levels. Our micro data on people's location further allows us to causally estimate the migration elasticity to the change in property tax rates. We find evidence of inter-state migration in response to an increase in property tax rates; and no statistically significant response of intra-state migration. We model the margins of adjustment available to municipalities---taxes and amenities---and their strategic interaction with the endogenous response of residents to assess fiscal sustainability.

UEA North America Meeting 2021 Honorable Mention

Presented at: Columbia University, Columbia Business School, AREUEA National Conference 2021, UEA North America Meeting 2021, EEA-ESEM 2022 (scheduled).

Local Government Debt Valuation (with Haaris Mateen and Marcelo Sena)


We construct a novel data set on the fiscal position of municipalities in the United States and document a secular decline in their financial health. Our data combines financial data from the Annual Comprehensive Financial Reports (ACFRs) of municipalities along with Census data of their revenue and expenditure cash flows. We find that a large share of municipalities operate with a negative net position—akin to a negative book equity position in the corporate context. We find that most of the decline originates from the accumulation of legacy obligations, i.e., pensions and other postemployment benefits (OPEBs); this is recognized by municipal bond markets through higher credit spreads. While accounting values from the ACFRs are informative, they are predominantly based on book valuations. Thus, we turn to the market valuation of local governments’ equity by estimating an SDF that matches the valuation of a wide range of assets in the economy to price future tax and expenditure claims. We further use the cross-sectional variation of local governments’ cyclicality in tax and expenditure claims to test whether the differential covariance with the SDF are reflected in the market valuation of local governments’ outstanding market debt.

Presented at: UEA 11th European Meeting, Brookings Institution 2022 Municipal Finance Conference (scheduled).


Economic Impact of Water Scarcity (with Jessica Goldenring and Dhruv Singal)


What is the economic impact of water scarcity? The World Resource Institute projects that 44 countries experience high or extremely high water distress in 2040. We assess the economic impact of water scarcity on land valuations. This Ricardian approach is commonly used in the literature to assess the impact of climate change. Specifically, we focus on farmland valuations in California—one of the most productive farmlands in the world. The semi-arid climate makes its valuation particularly sensitive to the amount of surface and groundwater water available for irrigation. The detailed administrative transaction data from the counties’ assessor offices allows us to estimate repeat sales indices as opposed to a hedonic model which make our results less likely to be affected by unobserved confounders. We find that parcels with better access to freshwater see a 24.9%-25.9% larger appreciation in land values per acre over the time period from 2011 to 2020 depending on the exact specification; we find no statistical significant differential price change between 2000-2011. The differential change in land values points towards large economic effects of water scarcity with beliefs about future climatic conditions being updated due to two severe episodes of drought and signals of legislative willingness to curb groundwater overdraft.

Presented at: Public Policy Institute of California (PPIC), Columbia University, Hoover Institution.

RESEARCH PAPERS IN PROGRESS

“COVID-19 Infections Absent Residential Segregation” (with Harrison Hong, Jeffrey Kubik, Haaris Mateen, Neng Wang, Jinqiang Yang)

“Policy Preferences: A Computational Linguistic Approach” (with Anand Chitale, Lea Frermann and José Luis Montiel Olea)