Established by a three person Reserve Bank Organization Committee (RBOC) in 1914, the structure of the Federal Reserve System has remained essentially unchanged ever since, despite criticism at the time and over ensuing decades.
We develop a dynamic labor search model where production and consumption take place
in spatially distinct labor markets with varying exposure to domestic and international trade.
The model recognizes the role of labor mobility frictions, goods mobility frictions, geographic
factors, and input-output linkages in determining equilibrium allocations.
Low sex ratios are often equated with unfavorable marriage prospects for women, but in France after World War I, the marriage probability of single females rose 50%, despite a massive drop in the male/female ratio.
The rise of China is no doubt one of the most important events in world economic history since
the Industrial Revolution. Mainstream economics, especially the institutional theory of
development based on a dichotomy of extractive vs. inclusive political institutions, is highly
inadequate in explaining China’s rise.
In U.S. data 1981–2012, unsecured firm credit moves procyclically and tends to lead GDP,
while secured firm credit is acyclical; similarly, shocks to unsecured firm credit explain a
far larger fraction of output fluctuations than shocks to secured credit.
Rehypothecation refers to the practice of spending a borrowed security
that is ostensibly assigned as collateral in a lending arrangement.
We develop a dynamic general equilibrium monetary model
where an “asset shortage” and incomplete markets motivates the formation
of credit relationships and the rehypothecation of assets.
We use cross-country data and instrumental variables widely used in the
literature to show that (i) institutions (such as property rights and the rule of law) do
not explain industrialization and (ii) agrarian countries and industrial countries have
entirely different determinants for income levels.
This study proposes and quantitatively assesses a terms-of-trade penalty for defaulting: defaulters must exchange more of their own goods for imports, which causes an adjustment to the equilibrium exchange rate.
Consider the following facts. In 1950, the richest countries attained an average of 8 years
of schooling whereas the poorest countries 1.3 years, a large 6-fold difference. By 2005, the
difference in schooling declined to 2-fold because schooling increased faster in poor than in
In this paper we compare the welfare effects of unemployment insurance (UI) with an universal
basic income (UBI) system in an economy with idiosyncratic shocks to employment. Both policies
provide a safety net in the face of idiosyncratic shocks.
Metro Business Cycles by Maria A. Arias, Charles S. Gascon, and David E. Rapach
Working Paper 2014-046B posted November 2014, updated February 2015
We construct monthly economic-activity indices for 51 U.S. metropolitan statistical
areas beginning in 1990. Each index is based on a dynamic factor model for 14 variables
measuring various aspects of economic activity in a metro area.
Countries that trade more with each other tend to have more correlated business cycles. Yet,
traditional international business cycle models predict a much weaker link between trade and
business cycle comovement.
Rising costs of and returns to college have led to sizeable increases in the demand for
student loans in many countries. In the U.S., student loan default rates have also risen
for recent cohorts as labor market uncertainty and debt levels have increased.
Latin America has had striking changes in economic performance over time. Following the
recession and debt crises of the early 1980’s, consumption declined for about ten years and consumption per-capita in the year 2004 was roughly the same as it was in 1980.