Search Results
Journal Article
Electric Vehicles, Potholes, and Taxes: Who Pays the Price?
Automobile manufacturers and even some states have ambitious goals to phase out gas-powered cars. Currently, a primary source of automobile infrastructure funding is gasoline taxes. But as electric vehicles replace gasoline-powered cars, less gasoline will be purchased and revenues from the gasoline tax will fall short of what is needed to maintain roads. Consumers who do not purchase electric vehicles—perhaps because they can't afford them—are left to bear the burden of the gasoline tax. This Policy Hub article illustrates the inherent regressivity of the gasoline tax and then simulates ...
Working Paper
The Economic Gains from Equity
How much is inequity costing us? Using a simple growth accounting framework we apply standard shift-share techniques to data from the Current Population Survey (1990-2019) to compute the aggregate economic costs of persistent educational and labor market disparities by gender and race. We find significant economic losses associated with these gaps. Building on this finding, we consider which disparities generate the largest costs, paying specific attention to differences in employment, hours worked, educational attainment, educational utilization, and occupational allocation. We also examine ...
Journal Article
From Gaps to Growth: Equity as a Path to Prosperity
The pandemic has shined a vivid light on the deep roots of economic inequity, showing that the rules are not the same for everyone. Persistent, unfair gaps in opportunity and well-being across different groups in our society limit people’s potential. Eliminating these inequities could substantially boost GDP and increase the economy’s long-run rate of growth, leading to greater prosperity for all.
Speech
Good Intentions
Virtual Presentation at Uneven Outcomes in the Labor Market Conference, by Mary C. Daly, President and CEO, Federal Reserve Bank of San Francisco, Thursday, February 4, 2021
Working Paper
Negative Correlation between Stock and Futures Returns: An Unexploited Hedging Opportunity?
The negative correlation between equity and commodity futures returns is widely perceived by investors as an unexploited hedging opportunity. A Lucas (1982) asset-pricing model is adapted to analyze the fundamentals driving equity and commodity futures returns. Using the model we argue that such a negative correlation could arise as an equilibrium relationship which reflects traders' perceptions about the shocks driving the fundamentals such as energy and consumables, and does not necessarily indicate any hedging opportunity.
Working Paper
Slow capital, fast prices: Shocks to funding liquidity and stock price reversals
A V-shaped price pattern is often observed in financial markets - in response to a negative shock, prices fall "too far" before reversing course. This paper looks at one particular channel of such patterns: the link between a liquidity provider's balance sheet and asset prices. I examine a well-identified historical case study where a large exogenous shock to a liquidity provider's balance sheet resulted in severe capital constraints. Using evidence from German universal banks, who acted as market makers for selected stocks in the interwar period, I show in a difference-in-differences ...
Working Paper
Financial market reactions to the Russian invasion of Ukraine
This article analyzes financial market reactions to the Russia-Ukraine war with a focus on the opening weeks. Markets did not completely anticipate the war and asset price reactions strengthened from the first week—when there were hopes for a quick resolution—to the second week, when prices generally peaked and began to partially revert to pre-war values. Exposure to commodity trade and trade with Russia-Ukraine determined market perceptions of the riskiness of equity and foreign exchange assets. Credit default swap prices on sovereign debt and breakeven inflation rates indicate that ...
Working Paper
A margin call gone wrong: Credit, stock prices, and Germany's Black Friday 1927
Leverage is often seen as villain in financial crises. Sudden deleveraging may lead to fire sales and price pressure when asset demand is downward-sloping. This paper looks at the effects of changes in leverage on asset prices. It provides a historical case study where a large, well-identified shock to margin credit disrupted the German stock market. In May 1927, the German central bank forced banks to cut margin lending to their clients. However, this shock affected banks differentially; the magnitude of credit change differed across banks. Using the strong connections between banks and ...
Journal Article
“Bouncing Forward” from Disasters on Hawaiʻi’s Big Island: Lessons for Equitable Recovery and Future Resilience
Recovery planning and implementation on the island of Hawaiʻi following a federally declared disaster provides an example of equitable, forward-looking disaster preparation and resilience. Community development professionals in other geographies can learn from the way planners and nonprofits used a regional equity approach to improving household and community resilience, broke down silos to have flexible funding from multiple sources ready for future disasters, and worked to build community through “resilience hubs” that provide disaster-related and ongoing services that help promote ...
Working Paper
Assessment Frequency and Equity of the Real Property Tax: Latest Evidence from Philadelphia
Philadelphia’s Actual Value Initiative, adopted in 2013, createsa unique opportunity for us to test whether reassessments at short intervals to true market value and taxing by such values improve equity. Based on a difference-in-differences framework using parcel-level data matched with transactions in Philadelphia and 15 comparable cities, this study finds positive evidence on equity outcomes from more regular revaluations. The quality of assessment, as measured by the coefficient of dispersion, improves substantially after 2014, although the extent of improvement varies across ...