Showing results 1 to 8 of approximately 8.(refine search)
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.
How Wide Is the Firm Border?
We examine the within- and across-firm shipment decisions of tens of thousands of goods-producing and goods-distributing establishments. This allows us to quantify the normally unobservable forces that determine firm boundaries; that is, which transactions are mediated by ownership control, as opposed to contracts or markets. We find firm boundaries to be an economically significant barrier to trade: Having an additional vertically integrated establishment in a given destination ZIP code has the same effect on shipment volumes as a 40 percent reduction in distance. These effects are larger ...
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.
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 ...
Quantifying the benefits of a liquidity-saving mechanism
This paper attempts to quantify the benefits associated with operating a liquidity-saving mechanism (LSM) in Fedwire, the large-value payment system of the Federal Reserve. Calibrating the model of Martin and McAndrews (2008), we find that potential gains are large compared to the likely cost of implementing an LSM, on the order of hundreds of thousands of dollars per day.
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 ...
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.
Firm Technology Upgrading Through Emerging Work
We propose a new measure of Örmsítechnology adoption, based on the types of employees they seek. We construct Örm year level measures of emerging and disappearing work using ads posted between 1940 and 2000 in The Boston Globe, The New York Times, and The Wall Street Journal. Among the set of publicly listed Örms, those which post ads for emerging work tend to be younger, more R&D intensive, and have higher future sales and productivity growth. Among all Örms, those which post ads for emerging work are more likely to survive and, for privately held Örms, are more likely to go public in ...