Skip to main content Skip to main content

Working Paper Archives

Federal Reserve Bank of St. Louis working papers are preliminary materials circulated to stimulate discussion and critial comment.

Monetary Policy/Macroeconomics

Interest Rate Dynamics, Variable-Rate Loan Contracts, and the Business Cycle

The interest rate at which US firms borrow funds has two features: (i) it moves in a countercyclical fashion and (ii) it is an inverted leading indicator of real economic activity: low interest rates forecast booms in GDP, consumption, investment, and employment.

A State-Level Analysis of Okun's Law

Okun's law is an empirical relationship that measures the correlation between the deviation of the unemployment rate from its natural rate and the deviation of output growth from its potential.

Nominal Exchange Rate Determinacy Under the Threat of Currency Counterfeiting

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.

On the Theoretical Efficacy of Quantitative Easing at the Zero Lower Bound

We construct a monetary economy in which agents face aggregate demand shocks and hetero- generous idiosyncratic preference shocks.

Local Fiscal Multipliers, Negative Spillovers and the Macroeconomy

This paper analyzes the impact of within-state military spending and national military spending on a state's employment.

Interest on Reserves, Interbank Lending, and Monetary Policy

A two-sector general equilibrium banking model is constructed to study the functioning of a floor system of central bank intervention.

Credit Search and Credit Cycles

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.

Multidimensional Skill Mismatch

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.

Current Federal Reserve Policy Under the Lens of Economic History: A Review Essay

This review essay is intended as a critical review of Humpage (2015), and it expands on the issues raised in that volume.

Banker Preferences, Interbank Connections, and the Enduring Structure of the Federal Reserve System

Established by a three person committee in 1914, the structure of the Federal Reserve System has remained essentially unchanged ever since, despite criticism at the time and over ensuing decades.

Optimal Monetary Policy at the Zero Lower Bound

We study optimal monetary policy at the zero lower bound. The macroeconomy we study has considerable income inequality which gives rise to a large private sector credit market.

Fertility Shocks and Equilibrium Marriage-Rate Dynamics

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 Making of an Economic Superpower―Unlocking China’s Secret of Rapid Industrialization

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.

Self-Fulfilling Credit Cycles

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.

Schools and Stimulus

This paper analyzes the impact of the education funding component of the 2009 American Recovery and Reinvestment Act (the Recovery Act) on public school districts.

Rehypothecation and Liquidity

Rehypothecation refers to the practice of using a borrowed security ostensibly assigned as collateral in a lending arrangement.

Scarcity of Safe Assets, Inflation, and the Policy Trap

We construct a model in which all consolidated government debt is used in transactions, with money being more widely acceptable.

Institutions Do Not Rule: Reassessing the Driving Forces of Economic Development

The pursuit to uncover the driving forces behind cross-country income gaps has divided economists into two major camps: One emphasizes institutions, while the other stresses non-institutional forces such as geography.

Equilibrium Sovereign Default with Exchange Rate Depreciation

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.

Explaining Educational Attainment across Countries and over Time

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 rich countries.

Universal Basic Income versus Unemployment Insurance

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.

Technology Innovation and Diffusion as Sources of Output and Asset Price Fluctuations

We develop a model in which innovations in an economy's growth potential are an important driving force of the business cycle.

Reaction Functions in a Small Open Economy: What Role for Non-traded Inflation?

I develop a structural general equilibrium model and estimate it for New Zealand using Bayesian techniques.

Targeted Search in Matching Markets

We propose a search and matching model where agents can choose who to meet but have to pay a search cost to locate potential matches more accurately.

Sovereign Default and Maturity Choice

We develop a quantitative model of sovereign debt maturity choice and the term structure of bond yields in the presence of default risk.

Fiscal Policy Spillovers: Points of Employment to Places of Residence

This paper studies the effects of interregional spillovers from the government spending component of the American Recovery and Reinvestment Act of 2009 (the Recovery Act). Using cross-county Census Journey to Work commuting data, we cluster U.S. counties into local labor markets, each of which we further partition into two subregions.

Rural-Urban Migration, Structural Transformation, and Housing Markets in China

This paper explores the contribution of the structural transformation and urbanization process in the housing market in China. City migration ‡flows combined with an inelastic land supply, due to entry restrictions, has raised house prices.

Three Scenarios for Interest Rates in the Transition to Normalcy

This article develops time-series models to represent three alternative, potential monetary policy regimes as monetary policy returns to normal. The first regime is a return to the high and volatile inflation rate of the 1970s.

Low Real Interest Rates, Collateral Misrepresentation, and Monetary Policy

A model is constructed in which households and banks have incent- ives to fake the quality of collateral. These incentive problems matter when collateral is scarce in the aggregate – when real interest rates are low.

Occupational Hazards and Social Disability Insurance

Using retrospective data, we introduce evidence that occupational exposure significantly affects disability risk. Incorporating this into a general equilibrium model, social disability insurance (SDI) affects welfare through (i) the classic, risk-sharing channel and (ii) a new channel of occupational reallocation.


Next 30 Working Papers

Archives

Year

Category

Author

JEL Code


Tools

Related Links


Subscribe to our newsletter


Follow us

Twitter logo Google Plus logo Facebook logo YouTube logo LinkedIn logo
Back to Top