Two-Sided Matching and Spread Determinants in the Loan Market

Empirical work on bank loans typically regresses loan spreads (markups of loan interest rates over a benchmark rate) on observed characteristics of banks, firms, and loans. The estimation is problematic when some of these characteristics are only partially observed and the matching of banks and firms is endogenously determined because they prefer partners that have higher quality. We study the U.S. bank loan market with a two-sided matching model to control for the endogenous matching, and obtain Bayesian inference using a Gibbs sampling algorithm with data augmentation. We find evidence of positive assortative matching of sizes, explained by similar relationships between quality and size on both sides of the market. Banks' risk and firms' risk are important factors in their quality. Controlling for the endogenous matching has a strong impact on estimated coefficients in the loan spread equation.Two-sided matching; Loan spread; Bayesian inference; Gibbs sampling with data augmentation

Manipulating lightcone fluctuations in an analogue cosmic string

We study the flight time fluctuations in an anisotropic medium inspired by a cosmic string with an effective fluctuating refractive index caused by fluctuating vacuum electric fields, which are analogous to the lightcone fluctuations due to fluctuating spacetime metric when gravity is quantized. The medium can be realized as a metamaterial that mimics a cosmic string in the sense of transformation optics. For a probe light close to the analogue string, the flight time variance is $\nu$ times that in a normal homogeneous and isotropic medium, where $\nu$ is a parameter characterizing the deficit angle of the spacetime of a cosmic string. The parameter $\nu$, which is always greater than unity for a real cosmic string, is determined by the dielectric properties of the metamaterial for an analogue string. Therefore, the flight time fluctuations of a probe light can be manipulated by changing the electric permittivity and magnetic permeability of the analogue medium. We argue that it seems possible to fabricate a metamaterial that mimics a cosmic string with a large $\nu$ in laboratory so that a currently observable flight time variance might be achieved.Comment: 13 pages, 1 figur