Exchange of letters between the Governor and the Chancellor on the Asset Purchase Facility - May 2025
Exchange of letters between the Governor and the Chancellor
They Looted Companies — Now They're Looting the Government
Economist William Lazonick reveals how the extraction model of American corporations has migrated from business to government.
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IFDP Paper: Related Exposures to Distressed Borrowers and Bank Lending(Revised)
Sumit Agarwal, Ricardo Correa, Bernardo Morais, Jessica Roldán and Claudia Ruiz-OrtegaWe study how banks’ exposure to a large set of related and suddenly-distressed borrowers impacts their commercial lending and risk taking. Using Mexican credit registry data, we examine the effect of the 2014 collapse in energy prices.
Smartwatches promise all kinds of quality-of-life improvements − here are 5 things users should keep in mind
That smarts! Photo by Lorena Sopena/Anadolu via Getty ImagesSmartwatches and other wearable devices can feel almost magical. Strap on a Fitbit, Apple Watch or Samsung Gear and you’re suddenly presented with a stream of data generated by – and about – your body: step counts, heart rate, blood oxygen level, calories burned and more.
If you really want to close the US trade deficit, try boosting innovation in rural manufacturing
President Donald Trump has long been preoccupied by the trade deficit — the gap between what the U.S. sells to the rest of the world and what it buys from it.
Rational inattention during an RCT
We introduce an information provision experiment into a standard dynamic rational inattention model. We derive analytical results about how the treatment effect varies with characteristics of the environment and the individual. We use these results to discuss findings in the empirical literature on information provision experiments that can be explained by rational inattention of survey respondents and what this interpretation implies about behavior outside the survey.
IFDP Paper: Measuring Shortages since 1900
Dario Caldara, Matteo Iacoviello, and David YuThis paper introduces a monthly shortage index spanning 1900 to the present, constructed from 25 million newspaper articles. The index captures shortages across industry, labor, food, and energy, and spikes during economic crises and wars. We validate the index and show that it provides information beyond traditional macroeconomic indicators.
FEDS Paper: Cost of Banking for LMI and Minority Communities(Revised)
Marco Migueis, Michael Suher, and Jessie XuWe test whether minimum account balances to avoid fees, maintenance fee amounts, and nonsufficient funds charges are systematically different in LMI and majority-minority communities relative to other communities and find that they are generally higher.
FEDS Paper: Refining the Definition of the Unbanked
Elena Falcettoni and Vegard Mokleiv NygaardWe propose a new way to classify individuals without a bank account, accounting for their actual interest in being banked. Analogous to how unemployment statistics are defined and estimated, we differentiate the individuals that do not have a bank account and would like to have one (the “unbanked”) from individuals that do not have a bank account and are not interested in having one (the “out of banking population”).
IFDP Paper: Optimal Credit Market Policy
Matteo Iacoviello, Ricardo Nunes, and Andrea PrestipinoWe study optimal credit market policy in a stochastic, quantitative, general equilibrium, infinite-horizon economy with collateral constraints tied to housing prices. Collateral constraints yield a competitive equilibrium that is Pareto inefficient. Taxing housing in good states and subsidizing it in recessions leads to a Pareto-improving allocation for borrowers and savers.
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