International Monetary Fund

Jacques Polak Research Conference

Financial Frictions and Macroeconomic Adjustment

Washington DC, November 5—6, 2009

Tenth Annual Jacques Polak Research Conference

Tenth Annual Jacques Polak Research Conference

The International Monetary Fund held the Tenth Annual Jacques Polak Research Conference at its headquarters in Washington, DC, on November 5-6, 2009.

The conference provided a forum for discussing innovative research in economics, undertaken both by IMF staff and by outside economists, and facilitated the exchange of views among researchers and policy makers. The theme of this year's Annual Research Conference was "Financial Frictions and Macroeconomic Adjustment" and was an exciting opportunity to discuss topical issues in light of the crisis.


The website contains papers and web links to papers that will be considered at the Tenth Jacques Polak Annual Research Conference (ARC). The views expressed in these papers are those of the authors only, and the presence of them, or of links to them, on the IMF website does not imply that the IMF, its Executive Board, or its management endorses or shares the views expressed in the papers.

The conference is open to the public and registration is required. To register for the conference (registration will include all conference sessions, the Mundell-Fleming Lecture, and the Economic Forum) please send an e-mail to The deadline for public registration is Friday, October 30, 2009. Registered attendees will be required to present photo identification on entering the IMF at 700 19th Street, N.W. Washington D.C.

Please note that, for this event, invitations for visa purposes will be extended only to the conference speakers.

Financial Frictions and Macroeconomic Adjustment
HQ1-R-710 (Auditorium)
Thursday, November 5
8:45–9:15am Welcome - Opening Remarks - Dominique Strauss-Kahn, Managing Director, IMF
9:15–10:45am Session 1: Household Leverage and Balance Sheets

Chair: Jonathan D. Ostry (Deputy Director, Research Department, IMF)

Household Leverage and the Recession of 2007 to 2009

Atif Mian (University of Chicago and NBER) and Amir Sufi (University of Chicago and NBER)

Discussant: Kevin Lansing (Federal Reserve Bank of San Francisco)

Balance Sheet Adjustment

Zhiguo He (University of Chicago), In Gu Khang (Northwestern University) and Arvind Krishnamurthy (Northwestern University and NBER)

Discussant: Nicolae Garleanu (University of California, Berkeley, NBER and CEPR)

10:45–11:00am ***Coffee Break***
11:00–12:30pm Session 2: Financial Intermediation and Bank Runs

Chair: Stijn Claessens (Assistant Director, Research Department, IMF)

Macro Risk Premium and Intermediary Balance Sheet Quantities

Tobias Adrian (Federal Reserve Bank of New York), Emanuel Moench (Federal Reserve Bank of New York), and Hyun Song Shin (Princeton University and CEPR)

Discussant: Simon Gilchrist (Boston University and NBER)

A Model of a Systemic Bank Run

Harald Uhlig (University of Chicago, NBER and CEPR)

Discussant: Robert Marquez (Boston University)

12:30–2:00pm ***Lunch***
(By invitation, IMF Gallery)

Luncheon Remarks
Ben Bernanke’s War on the Great Panic: Lessons Learned
David Wessel (Economics Editor for The Wall Street Journal)

Session 3: Financial Constraints and Debt Overhang


Chair: Carlo Cottarelli (Director, Fiscal Affairs Department, IMF)

What Hinders Investment in the Aftermath of Financial Crises: Balance-Sheet Mismatches or Access to Finance?

Sebnem Kalemli-Ozcan (University of Houston, NBER), Herman Kamil (IMF) and Carolina Villegas-Sanchez (University of Houston)

Discussant: C. Fritz Foley (Harvard University and NBER)

The Macroeconomics of Debt Overhang

Thomas Philippon (New York University, NBER and CEPR)

Discussant: Mark Aguiar (University of Rochester and NBER)

3:45–4:00pm ***Coffee Break***

Mundell-Fleming Lecture

Chair: Olivier Blanchard (Economic Counsellor and Director, Research Department, IMF)

Sudden Financial Arrest

Ricardo J. Caballero (MIT and NBER)

Friday, November 6, 2009

Session 4: Asset Prices and Crises


Chair: Jan Brockmeijer (Deputy Director, Monetary and Capital Markets Department, IMF)

Do Global Banks Spread Global Imbalances? The Case of Asset-Backed Commercial Paper During the Financial Crisis of 2007–09

Viral Acharya (New York University, NBER and CEPR) and Philipp Schnabl (New York University)

Discussant: Adam Ashcraft (Federal Reserve Bank of New York)

Credit Traps

Efraim (Effi) Benmelech (Harvard University and NBER) and Nittai Bergman (MIT and NBER)

Discussant: Owen Lamont (Harvard University)

10:45–11:00am ***Coffee Break***

Session 5: Credit, Housing Finance and Lobbying


Chair: Jorge E. Roldos (Division Chief, IMF Institute)

Self-Fulfilling Credit Market Freezes

Lucian Bebchuk (Harvard University, NBER and CEPR) and Itay Goldstein (University of Pennsylvania)

Discussant: Paolo Pesenti (Federal Reserve Bank of New York, NBER and CEPR)

Mortgage Default, Foreclosures and Bankruptcy in the Context of the Financial Crisis

Wenli Li (Federal Reserve Bank of Philadelphia) and Michelle J. White (University of California, San Diego and NBER)

Discussant: Stijn Claessens (IMF and CEPR)

A Fistful of Dollars: Lobbying and the Financial Crisis

Deniz Igan (IMF), Prachi Mishra (IMF), and Thierry Tressel (IMF)

Discussant: Raymond Fisman (Columbia University and NBER)

1:15–2:45pm ***Lunch***
(By invitation, IMF Gallery)

Economic Forum:
Macro-Financial Policies After the Crisis
Webcast of the Forum

Olivier Blanchard (Economic Counsellor and Director, Research Department, IMF)

Franklin Allen (University of Pennsylvania)
Randall S. Kroszner (University of Chicago)
Laurence Meyer (Macroeconomic Advisers)
Eswar Prasad (Cornell University, Brookings Institution and NBER)

Conference Organizing Committee: Ayhan Kose (Chair), Abdul Abiad, Chris Crowe, Deniz Igan, Pau Rabanal (All IMF), and Pierre-Olivier Gourinchas (University of California, Berkeley).
Conference Coordinator: Tracey Lookadoo