Optimal Capital Requirements over the Business and Financial Cycles
研究了银行不完全内化贷款决策的社会成本导致过度投资时，最优资本要求应如何随经济周期调整，发现繁荣期应收紧而非放松资本要求。
I study economies where banks do not fully internalize the social costs of their lending decisions, which leads to real overinvestment. The bank capital requirement that restores investment efficiency varies over time. During booms, more investment is desirable, so the banking sector must be allowed to expand. This suggests a loosening of the requirement. However, there is also more bank capital. Since the banking sector exhibits decreasing returns to scale, this suggests a tightening instead. I find that the latter effect, which I dub the “bank capital channel,” dominates: the optimal capital requirement is tighter during booms than in recessions.