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Series:Working Papers  Bank:Federal Reserve Bank of St. Louis 

Working Paper
Decomposing the Government Transfer Multiplier

We estimate the local, spillover and aggregate causal effects of government transfers on personal income. We identify exogenous changes in federal transfers to residents at the state-level using legislated social security cost-of-living adjustments between 1952 and 1974. Each effect is measured as a multiplier: the change in personal income in response to a one unit change in transfers. The local multiplier, i.e., the effect of own-state transfers on own-state income holding fixed other state's income, at a four-quarter horizon is approximately 3.4. The cross-state spillover multiplier is ...
Working Papers , Paper 2023-017

Working Paper
Economic Surveillance using Corporate Text

Full and correct order of authors: Tarek A. Hassan, Stephan Hollander, Aakash Kalyani, Laurence van Lent, Markus Schwedeler, and Ahmed Tahoun. This article applies simple methods from computational linguistics to analyze unstructured corporate texts for economic surveillance. We apply text-as-data approaches to earnings conference call transcripts, patent texts, and job postings to uncover unique insights into how markets and firms respond to economic shocks, such as a nuclear disaster or a geopolitical event---insights that often elude traditional data sources. This method enhances our ...
Working Papers , Paper 2024-022

Working Paper
Cross-border Patenting and the Margins of International Trade

This paper investigates the impact of cross-border patenting on the margins of international trade using disaggregated data on international patenting and trade flows. We develop a theoretical framework of trade and firms' patenting decisions that motivates our empirical analysis. The main results reveal that cross-border patenting has a larger effect on the extensive margin of trade compared to the intensive margin. This finding suggests that firms tend to seek patent protection in international markets prior to entering those markets with new products, rather than with their existing ...
Working Papers , Paper 2024-028

Working Paper
Heterogeneity in Work From Home: Evidence from Six U.S. Datasets

This paper documents heterogeneity in work from home (WFH) across six U.S. data sets. These surveys agree that pre-pandemic differences in WFH rates by sex, education, and state of residence expanded following the Covid-19 outbreak. The surveys also show similar post-pandemic trends in WFH by firm size and industry. We show that an industry's WFH potential was highly correlated with actual WFH during the first year or two of the Covid-19 pandemic, but that this correlation was much weaker before and after the pandemic, suggesting that WFH potential is a necessary but not sufficient ...
Working Papers , Paper 2024-038

Working Paper
The Beige Book and the Business Cycle: Using Beige Book Anecdotes to Construct Recession Probabilities

The Federal Reserve releases the Beige Book prior to each Federal Open Market Committee meeting. The report is a narrative based on anecdotal and qualitative information collected from a wide range of contacts in each of the 12 Federal Reserve Districts. We take the lexicon approach to text analysis to create sentiment indexes that track changes in economic conditions from the very first Beige Book in May 1970 to the most recent (at the time of writing) in October 2024. We create additional indexes to account for various current-event shocks, such as political events or natural disasters that ...
Working Papers , Paper 2024-037

Working Paper
The Beige Book and the Business Cycle: Using Beige Book Anecdotes to Construct Recession Probabilities

The Federal Reserve releases the Beige Book prior to each Federal Open Market Committee meeting. The report is a narrative based on anecdotal and qualitative information collected from a wide range of contacts in each of the 12 Federal Reserve Districts. We take the lexicon approach to text analysis to create sentiment indexes that track changes in economic conditions from the very first Beige Book in May 1970 to the most recent (at the time of writing) in October 2024. We create additional indexes to account for various current-event shocks, such as political events or natural disasters that ...
Working Papers , Paper 2024-037

Working Paper
Heterogeneous Capital Ownership, Partial Democracy and Political Support for Immigration

This paper analyzes and compares equilibrium immigration levels of some popular political economy models in the context of unequal capital holdings. We show that immigration rises (falls) with inequality in a limited (inclusive) democracy where only a small (large) fraction of the population has voting rights. Furthermore, we highlight the similarities between a campaign-contributions model and a partial-democracy model in terms of their predictions about immigration policy. In particular, we show that extension of voting rights in a partial democracy has qualitatively similar implications on ...
Working Papers , Paper 2024-035

Working Paper
Taxation, Compliance, and Clandestine Activities

We investigate the delicate balance policymakers have to strike between raising tax revenues for public good provision and controlling the distortionary effects of taxes on (i) tax evasion, (ii) total work hours, and (iii) the allocation of work hours to illegal activities. These distortions lower the constrained optimal tax rate and result in the under-provision of the public good. This under-provision problem is mitigated when surplus from the audit agency is seamlessly transferred to the taxing authorities. Extensions of the basic model incorporate agent heterogeneity and a more general ...
Working Papers , Paper 2025-005

Working Paper
Monetary Policy and the Great COVID-19 Price Level Shock

We use an analytically tractable DSGE model to study the surge in the cost of living in the wake of the COVID-19 pandemic. A calibrated version of the model is used to assess the conduct of US monetary and fiscal policy over the 2020-2024 period. The model is also used to estimate the economic and welfare consequences of alternative monetary and fiscal policies. The calibrated model suggests that while the extraordinary fiscal transfers made in 2020-21 generally improved economic welfare, they were significantly larger than needed. These welfare gains came primarily in the form of insurance, ...
Working Papers , Paper 2025-004

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