We study the endogenous choice to accept fiat objects as media of exchange and their implications
for nominal exchange rate determination. We consider a two-country environment with two
currencies which can be used to settle any transactions.
The supply and demand of credit are not always well aligned and matched, as is reflected
in the countercyclical excess reserve-to-deposit ratio and interest spread between the lending
rate and the deposit rate.
What determines the earnings of a worker relative to his peers in the same
occupation? What makes a worker fail in one occupation but succeed in another?
More broadly, what are the factors that determine the productivity of a worker-occupation
match? In this paper, we propose an empirical measure of skill mismatch
for a worker-occupation match, which sheds light on these questions.
Continued consolidation of the U.S. banking industry and general increase in the
size of banks has prompted some policymakers to consider policies to discourage banks
from getting larger, including explicit caps on bank size.
This paper analyzes the sources of the racial difference in the intergenerational transmission of human
capital by developing and estimating a dynastic model of parental time and monetary inputs in early childhood with endogenous fertility, home hours, labor supply, marriage, and divorce.
This paper develops measures of the costs and benefits of governance regulations
within a dynamic principal agent model of hidden information and moral
hazard following the passage of the Sarbanes-Oxley Act (SOX).
As an alternative to ordinary least squares (OLS), we estimate location values for single family houses using a standard housing price and characteristics dataset by local polynomial regressions (LPR), a semi-parametric procedure.
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.
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.