Working Paper Archives
Federal Reserve Bank of St. Louis working papers are preliminary materials circulated to stimulate discussion and critial comment.
Applied Microeconomics
Too Big to Cheat: Efficiency and Investment in Partnerships
This paper studies the efficient arrangement among several agents that are subject to idiosyncratic, privately observed taste shocks affecting their marginal utility of current consumption.
Informal Unemployment Insurance and Labor Market Dynamics
How do job losers use default -- a phenomenon 6x more prevalent than bankruptcy --as a type of “informal" unemployment insurance, and more importantly, what are the social costs and benefits of this behavior?
What Do We Know about the Relationship between Access to Finance and International Trade?
The recent financial crisis has focused attention on the relationship between access to finance and international trade, triggering a burgeoning segment of the literature evaluating this link empirically.
International Trade, Female Labor, and Entrepreneurship in MENA Countries
Middle Eastern and North African (MENA) countries stand out in international comparisons of de jure obstacles to female employment and entrepreneurship. These obstacles manifest themselves in low rates of female labor participation, entrepreneurship, and ownership.
Interjurisdictional Competition with Adverse Selection
In this paper we study competition among non-benevolent local governments for mobile firms and evaluate the consequences of imposing alternative regimes of competition.
On the Substitutability between Foreign Aid and International Credit
We examine the effect of relaxing a binding borrowing constraint for a recipient country on theamount of foreign aid it receives.
The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity.
An Approximate Dual-Self Model and Paradoxes of Choice under Risk
We derive a simplified version of the model of Fudenberg and Levine [2006, 2011] and show how this approximate model is useful in explaining choice under risk.
Evolving to the Impatience Trap: The Example of the Farmer-Sheriff Game
The literature on the evolution of impatience, focusing on one-person decision problems, finds that evolutionary forces favor the more patient individuals. This paper shows that in the context of a game, this is not necessarily the case.
Codes of Conduct, Private Information, and Repeated Games
We examine self-referential games in which there is a chance of understanding an opponent’s intentions. Our main focus is on the interaction of two sources of information about opponents’ play: direct observation of the opponent’s code-of-conduct, and indirect observation of the opponent’s play in a repeated setting.
This document describes the data collection and use of data for the computation of rankings within RePEc (Research Papers in Economics).
Author Identification in Economics, ... and Beyond
Identifying authorship correctly and efficiently is a difficult problem when the literature is abundant, but poorly recorded. Homonyms are tedious to differentiate.
Did Affordable Housing Legislation Contribute to the Subprime Securities Boom?
No. In this paper we use a regression discontinuity approach to investigate whether affordable housing policies influenced origination or affected prices of subprime mort- gages.
Lifetime Labor Supply and Human Capital Investment
We develop a model of retirement and human capital investment to study the effects of tax and retirement policies.
Credit Scoring and Loan Default
This paper introduces a measure of credit score performance that abstracts from the influence of "situational factors." Using this measure, we study the role and effectiveness of credit scoring that underlied subprime securities during the mortgage boom of 2000-2006.
What do happiness and health satisfaction data tell us about relative risk aversion?
In this paper we provide estimates of the coefficient of relative risk aversion using information on self-reports of subjective personal well-being from three datasets: the Gallup World Poll, the European Social Survey, and the World Values Survey.
The Effect of Neighborhood Spillovers on Mortgage Selection
In this paper we analyze how spillovers in mortgage adoption affect mortgage product choice across neighborhoods and across borrowers of different racial or ethnic groups.
The Effects of Female Labor Force Participation on Obesity
This paper assesses whether a causal relationship exists between recent increases in female labor force participation and the increased prevalence of obesity amongst women.
Race, Redlining, and Subprime Loan Pricing
We investigate whether race and ethnicity influenced subprime loan pricing during 2005, the peak of the subprime mortgage expansion. We combine loan-level data on the performance of non-prime securitized mortgages with individual- and neighborhood- level data on racial and ethnic characteristics for metropolitan areas in California and Florida.
Why Do Education Vouchers Fail at the Ballot Box?
We compare a uniform voucher regime against the status quo mix of public and private education, focusing on the distribution of welfare gains and losses across house- holds by income.
Moral Hazard and Lack of Commitment in Dynamic Economies
We revisit the role of limited commitment in a dynamic risk-sharing setting with private information. We show that a Markov-perfect equilibrium, in which agent and insurer cannot commit beyond the current period, and an infinitely-long contract to which only the insurer can commit, implement identical consumption, effort and welfare outcomes.
Dynamic Optimal Insurance and Lack of Commitment
This paper analyzes dynamic risk-sharing contracts between profit-maximizing insurers and risk-averse agents who face idiosyncratic income uncertainty and may self-insure through savings.
Should Easier Access to International Credit Replace Foreign Aid?
We examine the interaction between foreign aid and binding borrowing constraint for a recipient country. We also analyze how these two instruments affect economic growth via non-linear relationships. First of all, we develop a two-country, two-period trade-theoretic model to develop testable hypotheses and then we use dynamic panel analysis to test those hypotheses empirically. Our main findings are that: (i) better access to international credit for a recipient country reduces the amount of foreign aid it receives, and (ii) there is a critical level of international financial transfer, and the marginal effect of foreign aid is larger than that of loans if and only if the transfer (loans or foreign aid) is below this critical level.
Out-of-School Suspensions and Parental Involvement in Children’s Education
Do parents alter their investment in their child’s human capital in response to changes in school inputs? If they do, then ignoring this effect will bias the estimates of school and parental inputs in educational production functions.
Optimal Auditing and Insurance in a Dynamic Model of Tax Compliance
We study the optimal auditing of a taxpayer’s income in a dynamic principal- agent model of hidden income. Taxpayers in our model initially have low income and stochastically transit to high income that is an absorbing state.
Immigration Policy and Counterterrorism
A terrorist group, based in a developing (host) country, draws unskilled and skilled labor from the productive sector to conduct attacks in that nation and abroad.
The Distributional Burden of Instant Lottery Ticket Expenditures: An Analysis by Price Point
This article examines the distributional burden of different price-point instant lottery games. Theoretical reasons exist for expecting higher-priced instant lottery games to be less regressive than lower-priced instant games.
Foreign Direct Investment, Aid, and Terrorism: An Analysis of Developing Countries
Using a dynamic panel data framework, we investigate the relationship between the two major forms of terrorism and foreign direct investment (FDI). We then analyze how these relationships are affected by foreign aid flows.
The Role of Schools in the Production of Achievement
What explains differences in pre-market factors? Three types of inputs are believed to determine the skills agents take to the labor market: ability, family inputs and school inputs.
An Evaluation of the Employment Effects of Barriers to Outsourcing
Barriers to outsourcing that are being currently implemented in the US effectively tax its companies who “export” jobs through outsourcing. The objective is to raise domestic employment.
