I quantify the relative contributions of oligopoly market power and idiosyncratic risk to firm-level markups. I develop a general equilibrium model of granular firms competing in a product network under cost and demand uncertainty, where managers face source-dependent risk penalties. Exploiting a latent factor structure in revenues and profits, I jointly estimate baseline market power and the risk markups for U.S. public firms. I find that idiosyncratic risk accounts for only 4% of aggregate markups, suggesting that it is not the primary driver of markups. Antitrust and competition regulation should remain central to addressing markups.

We study how productivity volatility affects systemic bank runs through leverage, fire sales, and post-crisis rebuilding in a continuous-time version of Gertler and Kiyotaki (2015). Higher volatility can strengthen creditor protection by reducing leverage but weaken it by depressing liquidation values when less efficient households absorb bank assets. Under the stated strategy selection rule, stationary average run intensity follows an inverted U over the solved volatility range. An exact decomposition attributes the rising branch mainly to changes in state visitation and the falling branch to deleveraging, despite offsetting fire-sale effects. An analytical illustration shows how this stationary hump can arise even when conditional run intensity is nonincreasing in volatility.

The countercyclical behavior of secured debt, a well-documented phenomenon, has raised questions about its underlying mechanisms. This paper shows that the countercyclical nature of secured debt arises in an environment with information frictions. Unsecured debt necessitates costly firm monitoring, and such action requires expertise. When the quality of collateral drops, high demand for monitoring pushes up the cost of such services and renders unsecured debt unprofitable. In response, firms switch to secured debt with active screening that is less costly. We show that the proportion of secured debt in the economy serves as an indicator of whether there is excess or insufficient information acquisition.