Person: Gete, Pedro
Loading...
Email Address
Birth Date
Research Projects
Organizational Units
Job Title
First Name
Pedro
Last Name
Gete
Affiliation
IE University
School
IE Business School
Department
Finance
Identifiers
Name
7 results
Search Results
Now showing 1 - 7 of 7
Publication A Quantitative Model of International Lending of Last Resort(Elsevier, 2020-03) Gete, Pedro; Melkadze, Givi; Uribe, Martin; https://ror.org/02jjdwm75We analyze banking crises and lending of last resort (LOLR) in a quantitative model of financial frictions with bank defaults. LOLR policies generate a tradeoff between financial fragility (due to more highly leveraged banks) and milder crises since the policies are effective once in a crisis. In the calibrated model, the crisis mitigation effect dominates the moral hazard problem and the economy is better off having access to a lender of last resort. We characterize the conditions under which pools of small economies can be sustainable LOLRs. In addition, we assess the ability of China - a country with ample reserves - to be a sustainable international LOLR.Publication The economic effects of real estate investors(John Wiley and Sons Inc, 2023) Garriga, Carlos; Tsouderou, Athena; Gete, Pedro; Federación Española de Enfermedades Raras; Hebrew University of Jerusalem; https://ror.org/02jjdwm75We show five new results about small- and medium-sized real estate investors (SMREI) who participate through legal entities in US housing markets. First,SMREI have the largest growth across all cities post Great Recession,in contrast to Wall Street Landlords who concentrate in superstar cities. Second,SMREI increase house price growth and price-to-income ratio,especially in the bottom price tier. Third,this effect is reversed as investors trigger a medium-run supply response. Fourth,in areas with a high supply elasticity,SMREI affect rents more than prices. Finally,SMREI change the composition of the housing stock in favor of multifamily units. © 2023 American Real Estate and Urban Economics Association.Publication Credit Stimulus, Executive Ownership, and Firm Leverage(INFORMS, 2021-12-14) Gete, Pedro; Chakraborti, Rajdeep; Dahiya, Sandeep; Ge, Lei; Ministerio de Ciencia, Innovación y Universidades; Agencia Estatal de Investigación; European Regional Development Fund; https://ror.org/02jjdwm75We show that executive ownership is a significant driver of the demand for credit following credit expansion policies. Our focus on credit demand is in contrast to most studies that have focused on credit supply factors such as bank capital. Our identification exploits the large and unexpected Chinese credit expansion in 2008. This setting offers a unique advantage as in 2008 the Chinese government had almost complete control over the banking sector and it directed the banks to increase credit supply. Thus, in this setting, demand, rather than supply, largely drives the observed changes in firms’ borrowing. We provide extensive robustness tests to validate our results.Publication A model of managerial compensation, firm leverage and credit stimulus(Elsevier, 2024-06) Gete, Pedro; Chakraborti, Rajdeep; Dahiya, Sandeep; Ge, Lei; Ministerio de Ciencia, Innovación y Universidades; Agencia Estatal de Investigación; https://ror.org/02jjdwm75We study a model in which leverage and compensation are both choice variables for the firm and borrowing spreads are endogenous. First, we analyze the correlation between leverage and variable compensation. We show that allowing for endogenous compensation and leverage can explain the conflicting findings of the empirical literature. We uncover a new channel of complementarity between effort and leverage that induces a correlation sign opposite to what current theoretical models predict. Second, we study the dynamics of leverage and compensation design after a credit stimulus. We derive a set of new empirical predictions. For outward-shifts in credit supply, variable compensation is increasing in leverage growth. Moreover, variable compensation increases after the credit stimulus, especially for firms with low idiosyncratic risk.Publication Climate risk in mortgage markets: Evidence from Hurricanes Harvey and Irma(Wiley, 2024-02-27) Gete, Pedro; Tsouderou, Athena; Wachter, Susan; Ministerio de Ciencia e Innovación; Agencia Estatal de Investigación; https://ror.org/02jjdwm75Using the Credit Risk Transfers (CRTs) issued by Fannie Mae and Freddie Mac, we study how, absent government intervention, mortgage markets would price hurricane risk. Currently, such risk is priced equally across locations even if it is location-specific. We hand collect a novel and detailed database to exploit CRTs' heterogeneous exposure to Hurricanes Harvey and Irma. Using a diff-in-diff specification, we estimate the reaction of private investors to hurricane risk. We use the previous results to calibrate a model of mortgage lending. We simulate hurricane frequencies and mortgage default probabilities in each US county to derive the market price of mortgage credit risk, that is, the implied guarantee fees (g-fees). Market-implied g-fees in counties most exposed to hurricanes would be 70% higher than inland counties.Publication Expectations and the housing boom and bust. An open economy view(Elsevier, 2020-09) Gete, Pedro; Banco de España; CaixaBank; Ministerio de Economía y Competitividad; Agencia Estatal de Investigación; European Regional Development Fund; https://ror.org/02jjdwm75I show that both before and after the Great Recession, housing dynamics strongly correlate with current account dynamics, both across and within countries. In a benchmark DSGE model of housing markets, housing price-to-rent ratios are counterfactual if the transmission channel from housing to the current account is only through the consumption effects from relaxed borrowing constraints. Utilizing a model with enough reallocation of labor between construction and tradable goods resolves the problem. In this model, using survey data on housing price expectations generates dynamics of housing variables and the current account consistent with the data. However, interest rate dynamics are counterfactual.Publication Mortgage Securitization and Shadow Bank Lending(Oxford University Press, 2021-05) Gete, Pedro; Reher, Michael; Goldstein, Itay; https://ror.org/02jjdwm75We show how securitization affects the size of the nonbank lending sector through a novel price-based channel. We identify the channel using a regulatory spillover shock to the cross-section of mortgage-backed security prices: the U.S. liquidity coverage ratio. The shock increases secondary market prices for FHA-insured loans by granting them favorable regulatory status once securitized. Higher prices lower nonbanks’ funding costs, prompting them to loosen lending standards and originate more FHA-insured loans. This channel accounts for 22% of nonbanks’ growth in overall mortgage market share over 2013–2015. While the shock creates risks for financial stability, homeownership also increases.