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.
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.