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Report
The welfare effects of a liquidity-saving mechanism
This paper considers the welfare effect of introducing a liquidity-saving mechanism (LSM) in a real-time gross settlement (RTGS) payment system. We study the planner's problem to get a better understanding of the economic role of an LSM and find that an LSM can achieve the planner's allocation for some parameter values. The planner's allocation cannot happen without an LSM, as long as some payments can be delayed without cost. We show that, in equilibrium with an LSM, there can be either too few or too many payments settled early compared with the planner's allocation, depending on the ...
Report
The topology of the federal funds market
The recent turmoil in global financial markets underscores the importance of the federal funds market as a means of distributing liquidity throughout the financial system and a tool for implementing monetary policy. In this paper, we explore the network topology of the federal funds market. We find that the network is sparse, exhibits the small-world phenomenon, and is disassortative. In addition, reciprocity loans track the federal funds rate, and centrality measures are useful predictors of the interest rate of a loan.
Journal Article
Time Use Before, During, and After the Pandemic
Before 2020, we increasingly worked from home, spent time alone, and shared child-care duties. COVID accelerated and reshaped these trends.
Working Paper
Accounting for the Sources of Macroeconomic Tail Risks
Using a multi-industry real business cycle model, we empirically examine the microeconomic origins of aggregate tail risks. Our model, estimated using industry-level data from 1972 to 2016, indicates that industry-specific shocks account for most of the third and fourth moments of GDP growth.
Working Paper
Post-Merger Product Repositioning: An Empirical Analysis
This paper investigates firms’ post-merger product repositioning. We compile information on conglomerate firms’ additions and removals of products for a sample of 61 mergers and acquisitions across a wide variety of consumer packaged goods markets. We find that mergers lead to a net reduction in the number of products offered by the merging firms, and the products that are dropped tend to be particularly dissimilar to the firms’ existing products. These results are consistent with theories of the firm that emphasize core competencies linked to particular segments of the product market.
Working Paper
The Geography of Job Tasks
The returns to skills and the nature of work differ systematically across labor markets of different sizes. Prior research has pointed to worker interactions, technological innovation, and specialization as key sources of urban productivity gains, but has been limited by the available data in its ability to fully characterize work across geographies. We study the sources of geographic inequality and present new facts about the geography of work using online job ads. We show that the (i) intensity of interactive and analytic tasks, (ii) technological requirements, and (iii) task specialization ...
Briefing
Reopening the Economy: What Are the Risks, and What Have States Done?
The process of reopening economies battered by the COVID-19 pandemic has been the subject of considerable deliberation in recent months. It is generally agreed that accurate and timely monitoring of the pace of coronavirus spread is of the utmost importance in managing reopening. In addition, the discussion of reopening has often been framed by an assess-ment of the health risks posed by each economic sector. Some sectors, for example, involve especially close and protracted interaction among customers and employees, which can facilitate COVID-19 transmission. Accordingly, the sequence ...
Journal Article
How Accurate Are Long-Run Employment Projections?
The occupational mix has been changing for decades. Planners and decision makers need to know how it will continue to change, and why.
Working Paper
Scalable Demand and Markups
We study changes in markups across 72 product markets from 2006 to 2018. A growing literature has documented a rise in markups over time using a production function approach; we instead employ the standard microeconomic method, which is to estimate demand and then invert firms’ first-order pricing conditions to infer their markups. To make the method scalable, we propose estimating nested logit demand models, using household panel data to automate the assignment of products to nests. Our results indicate an overall upward trend in markups between 2006 and 2018, with considerable ...
Working Paper
A Twenty-First Century of Solitude? Time Alone and Together in the United States
This paper explores trends in time alone and with others in the United States. Since 2003, Americans have increasingly spent their free time alone, on leisure at home, and have decreasingly spent their free time with individuals from other households. These trends are more pronounced for non-White individuals, for males, for the less educated, and for individuals from lower-income households. Survey respondents spending a large fraction of their free time alone report lower subjective well-being. As a result, differential trends in time alone suggest that between-group inequality may be ...