#2007-043C "Why Do So Few Women Work in New York (and So Many in Minneapolis)? Labor Supply of Married Women Across U.S. Cities"
by Dan Black, Natalia Kolesnikova, and Lowell J. Taylor
October 2007
Revised May 2008

This paper documents two related little-noticed features of U.S. labor markets: (1) that there is currently substantial variation in the labor market participation rates and annual work hours of married women across cities, and (2) that the dramatic increase in married women's labor supply over the past 60 years has varied substantially across cities in timing and magnitude. More...

#2007-042C "Inter-temporal Differences in the Income Elasticity of Demand for Lottery Tickets"
by Thomas A. Garrett, and Cletus C. Coughlin
October 2007
Revised August 2008

We estimate annual income elasticities of demand for lottery tickets using county-level panel data for three states and find that the income elasticity of demand (and thus the tax burden) for lottery tickets has changed over time. More...

#2007-041A "Optimal Response to a Transitory Demographic Shock in Social Security Financing"
by Juan Carlos Conesa, and Carlos Garriga
September 2007

We examine the optimal policy response to a transitory demographic shock that affects negatively the financing of retirement pensions. More...

PUBLISHED: in Robert Fenge, Georges de Ménil and Pierre Pestieau, eds., Pension Strategies in Europe and the United States, April 2008, pp. 87-116, MIT Press.

#2007-040A "Mortgage Contracts and Housing Tenure Decisions"
by Matthew Chambers, Carlos Garriga, and Don Schlagenhauf
September 2007

In this paper, we analyze various mortgage contracts and their implications for housing tenure and investment decisions using a model with heterogeneous consumers and liquidity constraints. More...

#2007-039B "The Unusual Behavior of the Federal Funds and 10-Year Treasury Rates: A Conundrum or Goodhart’s Law?"
by Daniel L. Thornton
September 2007
Revised March 2008

In February 2005, former Chairman Alan Greenspan referred to the decline in long-term rates in the wake of the Fed increasing the target for the federal funds rate by 150 basis points as a “conundrum.” More...

#2007-038B "Political Asymmetry and Common External Tariff in a Customs Union"
by Subhayu Bandyopadhyay, Sajal Lahiri, and Suryadipta Roy
September 2007
Revised June 2008

This paper examines the effect of political asymmetries in the formation of common external tariffs (CETs) in a customs union (CU). We do so by introducing cross-border lobbying and by endogenizing tariff formation in a political economic model for the determination of CETs. More...

#2007-037B "The Optimal Inflation Target in an Economy with Limited Enforcement"
by Gaetano Antinolfi, Costas Azariadis, and James B. Bullard
September 2007
Revised November 2007

We formulate the central bank’s problem of selecting an optimal long-run inflation rate as the choice of a distorting tax by a planner who wishes to maximize discounted stationary utility for a heterogeneous population of infinitely-lived households in an economy with constant aggregate income. More...

#2007-036A "Optimal Taxation with Imperfect Competition and Aggregate Returns to Specialization"
by Javier Coto-Martínez, Carlos Garriga, and Fernando Sánchez-Losada
August 2007

In this paper we explore the proposition that in economies with imperfect competitive markets the optimal capital income tax is negative and the optimal tax on firms profits is confiscatory. More...

PUBLISHED: Journal of The European Economic Association (JEEA), December 2007, 5(6), pp. 1269-99

#2007-035A "Optimal Fiscal Policy in the Design of Social Security Reforms"
by Juan Carlos Conesa, and Carlos Garriga
August 2007

The quantitative macroeconomics literature has documented that in the basic Overlapping Generations model a privatization of the social security system, going from a Pay-As-You-Go to a Fully Funded system, generates large long run welfare gains at the cost of substantial welfare losses for initial generations. More...

PUBLISHED: International Economic Review, February 2008, 49(1), pp. 291-318

#2007-034A "Accounting for Changes in the Homeownership Rate"
by Matthew Chambers, Carlos Garriga, and Don Schlagenhauf
August 2007

After three decades of being relatively constant, the homeownership rate increased over the period 1994 to 2005 to attain record highs. More...

FORTHCOMING: International Economic Review