Search Results
Journal Article
Q and A: Black Chamber Executive Discusses Community Resources, Opportunities
An economist from the Institute of Economic Equity talks with Veta Jeffery, the chamber’s managing executive, about how important it is for the Black community to achieve greater prosperity.
Working Paper
The Dynamics of the Racial Wealth Gap
We reconcile the large and persistent racial wealth gap with the smaller racial earnings gap, using a general equilibrium heterogeneous-agents model that matches racial differences in earnings, wealth, bequests, and returns to savings. Given initial racial wealth inequality in 1962, our model attributes the slow convergence of the racial wealth gap primarily to earnings, with much smaller roles for bequests or returns to savings. Cross-sectional regressions of wealth on earnings using simulated data produce the same racial gap documented in the literature. One-time wealth transfers have only ...
Journal Article
Racial Differences in Mortgage Refinancing, Distress, and Housing Wealth Accumulation during COVID-19
The COVID-19 pandemic was characterized by both high refinancing volumes and high rates of mortgage nonpayment. Refinancing activity differed significantly across racial and ethnic groups, and we show that the benefits from the lower interest rate environment were not shared equally. Compared to white borrowers, Black and Hispanic mortgage borrowers experienced higher rates of nonpayment, which reflected both a greater transition into nonpayment status for Black and Hispanic borrowers and a lower likelihood of resuming payments. However, strong house price appreciation in recent years, ...
Working Paper
Monetary Policy with Racial Inequality
I develop a heterogeneous-agent New-Keynesian model featuring racial inequality in income and wealth, and studies interactions between racial inequality and monetary policy. Black and Hispanic workers gain more from accommodative monetary policy than White workers mainly due to higher labor market risks. Their gains are larger also because of a larger proportion of them are hand-to-mouth, while wealthy White workers gain more from asset price appreciation. Monetary and fiscal policies are substitutes in providing insurance against cyclical labor market risks. Racial minorities gain even more ...
Asset Values Surged during the K-Shaped Recovery
Average wealth rebounded sharply for Black, white and Hispanic families in the aftermath of the COVID-19 recession. But the gains in asset values varied greatly among these families.
Report
Monetary Policy and Racial Inequality
This paper aims at an improved understanding of the relationship between monetary policy and racial inequality. We investigate the distributional effects of monetary policy in a unified framework, linking monetary policy shocks both to earnings and wealth differentials between black and white households. Specifically, we show that, although a more accommodative monetary policy increases employment of black households more than white households, the overall effects are small. At the same time, an accommodative monetary policy shock exacerbates the wealth difference between black and white ...
Working Paper
Monetary Policy with Racial Inequality
I develop a heterogeneous-agent New-Keynesian model featuring racial inequality in income and wealth, and studies interactions between racial inequality and monetary policy. Black and Hispanic workers gain more from accommodative monetary policy than White workers mainly due to higher labor market risks. Their gains are larger also because of a larger proportion of them are hand-to-mouth, while wealthy White workers gain more from asset price appreciation. Monetary and fiscal policies are substitutes in providing insurance against cyclical labor market risks. Racial minorities gain even more ...
Journal Article
Lessons Learned from Mortgage Borrower Policies and Outcomes during the COVID-19 Pandemic
This article evaluates how the most important policy responses to the COVID-19 pandemic affected the US mortgage market. In particular, we consider the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020; the follow-on American Rescue Plan (ARP) Act of 2021, which extended many of the provisions in the CARES Act; and the Federal Reserve's large-scale asset purchase (LSAP) program that was announced in March 2020. Our analysis considers both the aggregate effects and the distributional effects of these policies on mortgage borrowers. Overall, we find that pandemic-era ...
Working Paper
Labor Market Discrimination and the Racial Unemployment Gap: Can Monetary Policy Make a Difference?
Black workers experience a higher unemployment rate, as well as more volatile employment dynamics, than white workers, and the racial unemployment rate gap is largely unexplained by observable characteristics. We develop a New Keynesian model with search and matching frictions in the labor market, endogenous separations, and employer discrimination against Black workers to explain these outcomes. The model is consistent with key features of the aggregate economy and is able to explain key labor market disparities across racial groups. We then use this model to assess the effects of the ...