Joachim Jungherr

Institut d'AnÓlisi Econ˛mica
Campus UAB
08193 Bellaterra (Barcelona)

About me:
I am a Post-doc Researcher at the Institut d'AnÓlisi Econ˛mica (IAE-CSIC) in Barcelona (Spain), a Research Fellow at MOVE, and an Affiliated Professor at the Barcelona Graduate School of Economics. I received my PhD from the European University Institute in Florence (Italy). I am co-organizing the Bellaterra Macroeconomics Seminar. A detailed CV can be found here.


Optimal Debt Maturity and Firm Investment (with Immo Schott)
(November 2016)

Barcelona GSE Working Paper 943; ADEMU Working Paper 2016/051

This paper introduces a maturity choice to the standard model of firm financing and investment. Long-term debt renders the optimal firm policy time-inconsistent. Lack of commitment gives rise to debt dilution. This problem becomes more severe during downturns. We show that cyclical debt dilution generates the observed counter-cyclical behavior of default, bond spreads, leverage, and debt maturity. It also generates the pro-cyclical term structure of corporate bond spreads. Debt dilution renders the equilibrium outcome constrained-inefficient: credit spreads are too high and investment is too low. In two policy experiments we find the following: (1) an outright ban of long-term debt improves welfare in our model economy, and (2.) debt dilution accounts for 84% of the credit spread and 25% of the welfare gap with respect to the first best allocation.

Bank Opacity and Financial Crises
(New Version: February 2017)

Barcelona GSE Working Paper 882; ADEMU Working Paper 2016/002; Barcelona GSE Focus

This paper studies a model of endogenous bank opacity. Why do banks choose to hide their risk exposure from the public? And should policy makers force banks to be more transparent? In the model, bank opacity is costly because it encourages banks to take on too much risk. But opacity also reduces the incidence of bank runs (for a given level of risk taking). Banks choose to be inefficiently opaque if the composition of their asset holdings is proprietary information. In this case, policy makers can improve upon the market outcome by imposing public disclosure requirements (such as Pillar Three of Basel II). However, full transparency maximizes neither efficiency nor stability. The model can explain why empirically a higher degree of bank competition leads to increased transparency.

Work in Progress

Capital Structure, Uncertainty, and Macroeconomic Fluctuations

A Blessing in Disguise? Market Power and Growth with Financial Frictions" (with David Strauss)

Call for Papers

June 8-9, 2017. Barcelona GSE Summer Forum: Macroeconomic and Financial Imbalances and Spillovers (ADEMU).

September 22-23, 2017. Barcelona: XII REDg Workshop (Research in Economic Dynamics Group).


I am teaching the second part of the class on Foundations of Equilibrium Analysis in the Macroeconomic Policy and Financial Markets Program of the Barcelona GSE.


Last updated: February 2017