Search Results
Working Paper
Cross-border Patenting, Globalization, and Development
We build a quantitative model that captures the relationships between cross-border patenting, globalization, and development. Our theory delivers a ‘structural gravity’ equation for cross-border patents. To test the model’s predictions, we compile a new dataset that tracks patents within and between countries and industries over time. The econometric analysis reveals a strong, positive impact of policy and globalization on cross-border patent flows between 1995 and 2018, especially from North to South. A counterfactual analysis shows these North-to-South flows benefited both regions, ...
Working Paper
Bank Linkages and International Trade
We show that bank linkages have a positive effect on international trade. We construct the global banking network (GBN) at the bank level, using individual syndicated loan data from Loan Analytics for 1990-2007. We compute network distance between bank pairs and aggregate it to country pairs as a measure of bank linkages between countries. We use data on bilateral trade from IMF DOTS as the subject of our analysis and data on bilateral bank lending from BIS locational data to control for financial integration and financial flows. Using gravity approach to modeling trade with country-pair and ...
Working Paper
Foreclosure Externalities and Vacant Property Registration Ordinances
This paper tests the effectiveness of vacant property registration ordinances (VPROs) in reducing negative externalities from foreclosures. VPROs were widely adopted by local governments across the United States during the foreclosure crisis and facilitated the monitoring and enforcement of existing property maintenance laws. We implement a border discontinuity design combined with a triple-difference specification to overcome policy endogeneity concerns, and we find that the enactment of VPROs in Florida more than halved the negative externality from foreclosure. This finding is robust to a ...
Report
The price effects of cash versus in-kind transfers
This paper examines the effect of cash versus in-kind transfers on local prices. Both types of transfers increase the demand for normal goods; in-kind transfers also increase supply in recipient communities, which should cause prices to fall relative to cash transfers. We test and confirm this prediction using a program in Mexico that randomly assigned villages to receive boxes of food (trucked into the village), equivalently valued cash transfers, or no transfers. We find that prices are significantly lower under in-kind transfers compared with cash transfers; relative to the control group, ...
Working Paper
Low Interest Rates and the Predictive Content of the Yield Curve
Does the yield curve's ability to predict future output and recessions differ when interest rates and inflation are low, as in the current global environment? We explore the issue using historical data going back to the 19th century for the US. This paper is similar in spirit to Ramey and Zubairy (2018), who look at the government spending multiplier in times of low interest rates. If anything, the yield curve tends to predict output growth better in low interest rate environments, though this result is stronger for RGDP than for IP.
Working Paper
High-Skilled Services and Development in China
We document that the employment share of high-skill-intensive services is much lower in China than in countries with similar gross domestic product (GDP) per capita. We build a model of structural change with goods and low- and high-skill-intensive services to account for this observation. We find that large distortions limit the size of high-skill-intensive services in China. If they were removed, both high-skill-intensive services and GDP per capita would increase considerably. We document a strong presence of state-owned enterprises in high-skill-intensive services and argue that this ...
Working Paper
The Decline of the U.S. Labor Share
Over the past quarter century, labor?s share of income in the United States has trended downwards, reaching its lowest level in the postwar period after the Great Recession. Detailed examination of the magnitude, determinants and implications of this decline delivers five conclusions. First, around one third of the decline in the published labor share is an artifact of a progressive understatement of the labor income of the self-employed underlying the headline measure. Second, movements in labor?s share are not a feature solely of recent U.S. history: The relative stability of the aggregate ...
Working Paper
Does Quantitative Easing Affect Market Liquidity?
The second round of large-scale asset purchases by the Federal Reserve?frequently referred to as QE2?included repeated purchases of Treasury inflation-protected securities (TIPS). To quantify the effect QE2 had on the functioning of the TIPS market and the related market for inflation swaps, we exploit the measure of combined liquidity premiums in TIPS yields and inflation swap rates derived by Christensen and Gillan (2012). We find that, on TIPS purchase dates, the liquidity premium dropped by 8 to 11 basis points depending on maturity, or about 50 percent. Furthermore, the effect was ...
Journal Article
What the Moment Demands
When central banks are unsure about how the economy will evolve, what impact their policies will have, or how fundamental benchmarks in the economy are changing, the optimal strategy is a gradualist approach to policy. The challenge will be to respond rapidly when the situation requires and to resist the pressure to act quickly when patience is needed. The following is adapted from the closing keynote by the president of the Federal Reserve Bank of San Francisco to the 33rd Frankfurt European Banking Congress in Frankfurt, Germany, on November 17.
Speech
What the Moment Demands
Mary C. Daly, President and Chief Executive Officer, Federal Reserve Bank of San Francisco, 33rd Frankfurt European Banking Congress, Frankfurt, Germany, November 17, 2023, 3:30 PM CET (local), 6:30 AM PST