Toni Whited

Ross School of Business
University of Michigan
701 Tappan Ave.
Ann Arbor, MI 48109
Tel: 734/764-1269

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
NBER Program Affiliations: CF
NBER Affiliation: Research Associate
Institutional Affiliation: University of Michigan

NBER Working Papers and Publications

May 2020Bank Market Power and Monetary Policy Transmission: Evidence from a Structural Estimation
with Yifei Wang, Yufeng Wu, Kairong Xiao: w27258
We quantify the impact of bank market power on monetary policy transmission through banks to borrowers. We estimate a dynamic banking model in which monetary policy affects imperfectly competitive banks’ funding costs. Banks optimize the pass-through of these costs to borrowers and depositors, while facing capital and reserve regulation. We find that bank market power explains much of the transmission of monetary policy to borrowers, with an effect comparable to that of bank capital regulation. When the federal funds rate falls below 0.9%, market power interacts with bank capital regulation to produce a reversal of the effect of monetary policy.
April 2007Regularities
with Laura X. L. Liu, Lu Zhang: w13024
The neoclassical q-theory is a good start to understand the cross section of returns. Under constant return to scale, stock returns equal levered investment returns that are tied directly with characteristics. This equation generates the relations of average returns with book-to-market, investment, and earnings surprises. We estimate the model by minimizing the differences between average stock returns and average levered investment returns via GMM. Our model captures well the average returns of portfolios sorted on capital investment and on size and book-to-market, including the small-stock value premium. Our model is also partially successful in capturing the post-earnings-announcement drift and its higher magnitude in small firms.
January 1995The Effect of Uncertainty on Investment: Some Stylized Facts
with John V. Leahy: w4986
The theoretical relationship between investment and uncertainty is ambiguous. This paper briefly surveys the insights that theory has to offer and then runs a series of simple tests aimed at evaluating the empirical significance of various theoretical effects. Our results from a panel of U.S. manufacturing firms indicate a negative effect of uncertainty on investment consistent with theories of irreversible investment. We find no evidence for a positive effect via the channel of the convexity of the marginal product of capital, and we find no evidence for the presence of a CAPM-based effect of risk.

Published: Journal of Money Credit and Banking, Vol. 28, no. 1, (February 1996), pp. 64-83. citation courtesy of

June 1993Internal Finance and Firm Investment
with R. Glenn Hubbard, Anil K. Kashyap: w4392
We examine the neoclassical investment model using a panel of U.S. manufacturing firms. The standard model with no financing constraints cannot be rejected for firms with high (pre-sample) dividend payouts. However, it is decisively rejected for firms with low (pre-sample) payouts (firms we expect to face financing constraints). Hem, investment is sensitive to both firm cash flow and macroeconomic credit conditions, holding constant investment opportunities. Sample splits based on firm size or maturity do not produce such distinctions. The latter comparison identifies firms where "free-cash-flow" problems might be expected to produce correlations between investment and cash flow.

Published: Journal of Money, Credit and Banking, vol. 27, no. 3, pp. 683-701, August 1995.

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