Hamilton Galindo Gil

PhD Student
Graduate Assistant/Associate
TEMPE Campus

Research Activity

Working Papers:

Leverage and Capital Utilization (2019) (with Diogo Duarte and Alexis Montecinos).

Our paper documents procyclical behavior between capital utilization and short-term debt. This strong positive relationship persists even when we control the regressions for firm size, profits, and growth, attesting to the robustness of our findings. In addition, our analysis of the time series and panel data shows that the relationship is present at both the aggregate and firm levels. Based on this empirical finding, we develop a DSGE model that sheds light on the role of capital utilization in propagating real and financial shocks to financial assets. We show that in the presence of capital utilization, positive real and financial shocks cause the firm to change its financing of the equity payout policy from earnings to debt, resulting in an increase in short-term debt. Therefore, ignoring the firm’s optimal decision on capital utilization may lead to misleading conclusions on how leverage is undertaken.

The Effects of Risk Aversion and Money Illusion on the Components of Dividend Growth Rate (2019) (with Diogo Duarte and Alexis Montecinos).

We evaluate the impact of risk aversion and money illusion in the equity and options markets when the expected dividend growth rate is endogenously determined as a function of the dividend-price ratio and expected inflation. The closed-form equilibrium expressions for the dividend-price ratio, expected inflation, and dividend growth rate allow us to perform comparative statics to understand their sensitivity relative to the agent's preference parameters. In our calibration exercise, the dividend-price ratio is an increasing function of risk aversion and money illusion, expected inflation is much less sensitive to variations on these parameters, and zero-coupon caplet prices are affected in opposite directions by them.


Galindo, H and A. Montecinos (2018). Macroeconomía Dinámica: Modelos de Ciclos Económicos Reales. (Spanish version)

You can find the published version at Amazon. Furthermore, in this link, you can find m-files to replicate each model of this book.



Summer 2021
Course NumberCourse Title
FIN 300Fundamentals of Finance