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Briefing
The Center for Advancing Women in Economics: A Conference Recap
Economists from the Richmond Fed, research universities and other institutions met in Richmond for the Center for Advancing Women in Economics (AWE) conference in November. Women researchers presented papers on a variety of topics, including unconventional monetary and fiscal policy, global inflation patterns, worker responses to labor shocks, capital flows and risk, changes in U.S. supply chains, and the dynamics of official lending.The conference concluded with a panel discussion on the challenges and opportunities for academic research to inform policy. AWE Director Marina Azzimonti served ...
Working Paper
Federal Reserve Structure, Economic Ideas, and Banking Policy During the "Quiet Period" in Banking
We evaluate the decentralized structure of the Federal Reserve System as a mechanism for generating and processing new ideas on banking policy in the 1950s and 1960s. We document that demand for research and analysis was driven by banking industry developments and legal changes that required the Federal Reserve and other banking regulatory agencies to develop guidelines for bank mergers. In response to these developments, the Board and the Reserve Banks hired industrial organization economists and young economists out of graduate school who brought in the leading theory of industrial ...
Working Paper
Inventory, Market Making, and Liquidity in OTC Markets
We develop a search-theoretic model of a dealer-intermediated over-the-counter market. Our key departure from the literature is to assume that, when a customer meets a dealer, the dealer can sell only assets that it already owns. Hence, in equilibrium, dealers choose to hold inventory. We derive the equilibrium relationship between dealers’ costs of holding assets on their balance sheets, their optimal inventory holdings, and various measures of liquidity, including bid-ask spreads, trade size, volume, and turnover. Using transaction-level data from the corporate bond market, we calibrate ...