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 investigates the effects of the Sarbanes-Oxley Act (SOX) on CEO compensation,
using panel data constructed for the S&P 1500 firms on CEO compensation,
financial returns, and reported accounting income.
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.
Why did the marriage probability of single females in France after World War 1 rise 50%
above its pre-war average, despite a 33% drop in the male/female singles ratio? We conjecture
that war-time disruption of the marriage market generated an abnormal abundance of
men with relatively high marriage propensities.
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