This paper studies the effects of bank failure on firm performance. We collect over 36 million loan records to build a novel dataset on the credit relationships of 1.8 million US firms, predominantly composed of small and medium-sized enterprises (SMEs). We then implement a staggered treatment difference-in-differences strategy with 179 bank failures from 2000 to 2023 to estimate the effect of bank failure on firm-level survival and employment growth. We find that firms who had a credit relationship to a bank that fails are 8.1 percentage points (36.5%) more likely to fail themselves within five years of the bank failure. Additionally, surviving firms affected by bank failure experience employment growth rates of approximately half compared to firms banking with non-failed banks. These impacts of bank failure on firm performance persist for over 10 years, are present for bank failures both during and outside the US financial crisis period, and are strongest for smaller enterprises. Our estimated effects are robust to two natural experiments in which the timing of the bank failure is plausibly exogenous to the health of the bank's borrowers. Surprisingly, we observe that a small selection of bank failure events in the US had positive effects on business borrowers revealing that bank failure can, in rare cases, actually be fortuitous for its business borrowers. Overall, our findings suggest that bank failures exert a substantially larger influence on the real economy than previously recognized, possibly requiring a re-evaluation of current regulatory approaches to managing such events.

This paper leverages generative AI to build a network structure over 5,000 prod- uct nodes, where directed edges represent input-output relationships in production. We layout a two-step ‘build-prune’ approach using an ensemble of prompt-tuned generative AI classifications. The ’build’ step provides an initial distribution of edge- predictions, the ‘prune’ step then re-evaluates all edges. With our AI-generated Pro- duction Network (AIPNET) in toe, we document a host of shifts in the network posi- tion of products and countries during the 21st century. Finally, we study production network spillovers using the natural experiment presented by the 2017 blockade of Qatar. We find strong evidence of such spill-overs, suggestive of on-shoring of criti- cal production. This descriptive and causal evidence demonstrates some of the many research possibilities opened up by our granular measurement of product linkages, including studies of on-shoring, industrial policy, and other recent shifts in global trade.

The pandemic catalyzed an enduring shift to remote work. To measure and characterize this shift, we examine more than 250 million job vacancy postings across five English-speaking countries. Our measurements rely on a state-of-the-art language-processing framework that we fit, test, and refine using 30,000 human classifications. We achieve 99% accuracy in flagging job postings that advertise hybrid or fully remote work, greatly outperforming dictionary methods and also outperforming other machine-learning methods. From 2019 to early 2023, the share of postings that say new employees can work remotely one or more days per week rose more than three-fold in the U.S and by a factor of five or more in Australia, Canada, New Zealand and the U.K. These developments are highly non-uniform across and within cities, industries, occupations, and companies. Even when zooming in on employers in the same industry competing for talent in the same occupations, we find large differences in the share of job postings that explicitly offer remote work.

This study uses a synthetic control method to estimate the local economic cost of Brexit. The vast majority of regions in the UK have lost as a result of Brexit. Since losses tend to be concentrated in relatively prosperous regions, Brexit has reduced regional inequalities (“levelling up“) while pushing down national output (“levelling down“ in the aggregate). Using both aggregate data from local elections and individual-level survey data from the British Election Study, we find that, politically, those areas that experienced Brexit-related out- put losses saw increases in support for right-wing populist parties, while the electoral fortunes of the Labour party declined.