#2005-066A "The Economic Effects of Violent Conflict: Evidence from Asset Market Reactions"
by Massimo Guidolin, and Eliana La Ferrara
October 2005

This paper studies the effects of conflict onset on asset markets applying the event study methodology. We consider a sample of 112 conflicts during the period 1974-2004 and find that a sizeable fraction of them had a significant impact on stock market indices and on major commodity prices. More...

#2005-065A "Human Capital Growth in a Cross Section of US Metropolitan Areas"
by Christopher H. Wheeler
September 2005

Human capital is typically viewed as generating a number of desirable outcomes, including economic growth. Yet, in spite of its importance, few empirical studies have explored why some economies accumulate more human capital than others. This paper attempts to do so using a sample of more than 200 metropolitan areas in the United States over the years 1980, 1990, and 2000. More...

PUBLISHED: Federal Reserve Bank of St. Louis Review, March/April 2006, 88(2), pp. 113-32

#2005-064B "Creating a Policy Environment for Entrepreneurs"
by Thomas A. Garrett, and Howard J. Wall
September 2005
Revised March 2006

This paper demonstrates that levels of entrepreneurship can be greatly affected by the general policy environment. Using a state-level panel, we estimate the effects of several policy variables on rates of entrepreneurship and find that bankruptcy exemptions, corporate tax rates, and the level of the minimum wage all affect a state's rate of entrepreneurship. More...

PUBLISHED: Cato Journal, Fall 2006, 26(3), pp. 525-52

#2005-063A "Open Market Operations and the Federal Funds Rate"
by Daniel L. Thornton
September 2005

The Fed's ability to control the federal funds rate stems from its ability to alter the supply of liquidity in the overnight market through open market operations. This paper uses daily data compiled by the author from the records of the Trading Desk of the Federal Reserve Bank of New York over the period March 1, 1984, through December 31, 1996, to analyze the Desk's use of its operating procedure in implementing monetary policy, and the extent to which open market operations affect the federal funds rate—the liquidity effect. More...

PUBLISHED: in D.G. Mayes and J. Toporowski, eds., Open Market Operations and Financial Markets, London, 2007, pp. 178-202. Reprinted in Federal Reserve Bank of St. Louis Review, November/December 2007, 89(6), pp. 549-70.

#2005-062C "Recent Developments in Monetary Macroeconomics and U.S. Dollar Policy"
by William T. Gavin
September 2005
Revised July 2007

This paper summarizes recent developments in the theory and practice of monetary policy in a closed economy and explains what these developments mean for United States dollar policy. More...

PUBLISHED: ICFAI Journal of Monetary Economics, August 2007, V(3), pp. 49-56

#2005-061B "Regional Disparities in the Spatial Correlation of State Income Growth"
by Thomas A. Garrett, Gary A. Wagner, and David C. Wheelock
August 2005
Revised December 2005

This paper presents new evidence of spatial correlation in U.S. state income growth. We extend the basic spatial econometric model used in the growth literature by allowing spatial correlation in state income growth to vary across geographic regions. We find positive spatial correlation in income growth rates across neighboring states, but that the strength of this spatial correlation varies considerably by region. More...

PUBLISHED: Annals of Regional Science, September 2007, 41(3), pp. 601-18

#2005-060D "Changing Noise Levels and Housing Prices near the Atlanta Airport"
by Jeffrey P. Cohen, and Cletus C. Coughlin
August 2005
Revised July 2008

Using hedonic models, we analyze the effects of proximity and noise on housing prices in neighborhoods near Hartsfield-Jackson Atlanta International Airport during 1995-2002. More...

FORTHCOMING: Growth and Change

#2005-059C "Forecasts of US Short-term Interest Rates: A Flexible Forecast Combination Approach"
by Massimo Guidolin, and Allan Timmermann
August 2005
Revised April 2007

This paper develops a flexible approach to combine forecasts of future spot rates with forecasts from time-series models or macroeconomic variables. More...

FORTHCOMING: Journal of Econometrics

#2005-058C "Immigration and Outsourcing: A General Equilibrium Analysis"
by Subhayu Bandyopadhyay, and Howard J. Wall
August 2005
Revised December 2007

This paper analyzes immigration and outsourcing in a general-equilibrium model of international factor mobility. In our model, legal immigration of skilled labor is controlled through a quota, while outsourcing is determined both by the firms in response to market conditions and through policy-imposed barriers. More...

FORTHCOMING: Review of Development Economics

#2005-057B "Kalman Filtering with Truncated Normal State Variables for Bayesian Estimation of Macroeconomic Models"
by Michael J. Dueker
July 2005
Revised March 2006

A pair of simple modifications-in the forecast error and forecast error variance-to the Kalman filter recursions makes possible the filtering of models in which one or more state variables is truncated normal and latent. More...

PUBLISHED: Economics Letters, October 2006, 93(1), pp. 58-62