Trying to book a flight right now can feel absurd. Qantas and Virgin Australia are warning that higher fuel costs and disruption linked to the Middle East conflict are putting pressure on fares and forcing capacity cuts.
We model central bank communication when there is disagreement between the markets and the central bank about the central bank’s confidence surrounding its point forecast. We show that such a disagreement leads the markets to misunderstand a given announcement, so that the markets either over- or underreact to the bank’s announcement. Communicating only a part of the central bank’s information set is a way to correct the markets’ over- or underreaction.
AI surveillance and algorithmic management threaten worker autonomy and dignity. It’s time for a rethinking of rights. Part of “AI and the Future of the American Worker,” a series on how artificial intelligence is impacting labor, power, and the meaning of work.
“Someone must have been telling lies about Joseph K., for without having done anything wrong he was arrested one morning.” ~ The Trial (1925), Franz Kafka
We analyze how bank lending to non-bank financial institutions (NBFIs) affects credit supply to the real economy. Using granular supervisory and loan-level data, we document rapid growth in bank lending to NBFIs relative to lending to non-financial firms. This growth is driven primarily by reverse repos to NBFIs that invest in securities, e.g., investment funds, rather than by loans to NBFIs that extend credit to firms, e.g., private credit funds.
Whether in sports, music or business, all-women teams earn less. Minnesota Lynx guard Renee Montgomery drives between Indiana Fever guards Layshia Clarendon, left, and Shenise Johnson at a WNBA game in Minneapolis.
We propose a new approach to estimate selection-corrected quantiles of the gender wage gap. Our method employs instrumental variables that explain variation in the latent variable but, conditional on the latent process, do not directly affect selection. We provide semiparametric identification of the quantile parameters without imposing parametric restrictions on the selection probability, derive the asymptotic distribution of the proposed estimator based on constrained selection probability weighting, and demonstrate how the approach applies to the Roy model of labor supply.
What should courts prioritize in determining antitrust cases: measurable welfare effects, or the protection of competitive rivalry itself? The Consumer Welfare Standard and the Protect Competition Standard offer different answers.
Should antitrust law focus primarily on measurable performance outcomes such as price and output as indicated by Robert Bork's Consumer Welfare Standard? Or is it more important to concentrate on whether conduct undermines the competitive process itself as per the newly revitalized Protect Competition Standard?
Policymakers often cite the risk that inflation expectations might “de-anchor” as a key reason for responding forcefully to inflationary shocks. We develop a model to analyze this trade-off and to quantify the benefits of stable long-run inflation expectations. In our framework, households and firms are imperfectly informed about the central bank’s objective and learn from its policy choices. Recognizing this interaction, the central bank raises interest rates more aggressively after adverse supply shocks and accepts short-run output costs to secure more stable inflation expectations.
We revisit the credit channel of monetary policy when firms face multiple financing constraints, a common feature of corporate financing we document empirically. Our theory shows that the multiplicity of constraints dampens the transmission of expansionary policy to firm borrowing and investment notably but amplifies the transmission of policy tightening. This asymmetry arises because, when policy tightens (eases), the most (least) responsive constraint binds. Using U.S.
