Hie Joo Ahn and Jeremy RuddThis paper estimates state-level trend unemployment rates (trend U-star) based on the trend components of unemployment inflows and outflows across unemployment durations. The estimated trend U-stars, particularly the portions attributable to long-termunemployment, have levels and dynamics that vary substantially across states.
Ozge Akinci, Sebnem Kalemli-Ozcan, and Albert QueraltoWe study how increased uncertainty about U.S. asset returns affects global asset prices and exchange rates in a two-country model with intermediary balance-sheet constraints. Empirically, uncertainty shocks widen global credit spreads, appreciate the dollar, and increase currency risk premia. In our model, higher uncertainty tightens intermediary constraints and lowers asset prices, reversing the counterfactual asset price increase in frictionless models.
Hyung Joo KimI propose a novel method to reliably estimate the conditional pricing kernel by incorporating conditioning variables. The VIX and the term spread are most informative variables for identifying state prices. The conditional kernel estimate exhibits significant time variation: the more favorable market expectations, the higher state prices in negative return states.
Martin Bodenstein and Junzhu ZhaoWe investigate Barro's random walk hypothesis according to which distortionary labor taxes should follow a random walk for any stochastic process of government expenditures, see Barro (1979). When agents experience cognitive discounting as in Gabaix (2020), they perceive government debt as wealth, and the random walk result breaks down except for knife-edge combinations of limited rationality by policymakers and the private sector.
Isabel Cairó, Hess Chung, Francesco Ferrante, Cristina Fuentes-Albero, Camilo Morales-Jimenez, and Damjan PfajfarLabor market variables frequently send conflicting signals about the degree of slack or tightness, often co
Colin Caines, Florian Hoffmann, Gueorgui KambourovWe document a strong, positive relationship between occupational problem complexity, measured from US data on problem-solving requirements, and occupational wage growth since 1980. In contrast, employment shifts toward more complex occupations have been modest, suggesting a race between the demand for and supply of complex skills.
Ayelen Banegas, Lucas Devigne, Mulalo Mamburu, Kleopatra Nikolaou, Anna Samarina, Fabio TamburriniThis paper synthesizes the literature on vulnerabilities in government bond-backed repo markets, focusing on the features that contribute to both the fragility and stability of these markets.
David Glancy, Robert Kurtzman, Lara LoewensteinPlace-based policies are often caught between two potentially conflicting aims: (i) directing aid to needy communities and (ii) spurring investment. We study this tradeoff in the context of the Opportunity Zones (OZ) program.
Christopher Gust, Edward Herbst, and David López-SalidoWe develop a finite-horizon planning model in which firms choose how far ahead to plan when setting prices. Planning further ahead improves a firm's pricing decision but requires cognitive effort.
Manuel Gonzalez-Astudillo, Jean-Philippe Laforte, Antoine LepetitPotential output and the natural rate of unemployment are commonly estimated through trend-cycle decompositions, where they are identified as underlying trends reflecting slow-moving supply factors.
