David M. Arseneau, Elizabeth Klee, Antonis Kotidis, and Michael SiemerThe Bank Term Funding Program (BTFP) was an emergency liquidity facility set up by the Federal Reserve in March 2023 following the failure of Silicon Valley Bank which experienced a classic bank run driven by weak fundamentals.
Shengwu Du, Travis D. Nesmith, and Yang HeppeFinancial stress can impact trading behavior in the U.S. commodity futures markets. To clarify the impact, we study absolute changes and relative exposure dynamics in traders' positions during two recent crises: the 2008 Global Financial Crisis (GFC) and the COVID-19 pandemic. The nature of these two crises are very distinct, and we find that traders behaved quite differently.
Juan Carlos Córdoba, Anni T. Isojärvi, and Haoran LiThis paper revisits the conditions under which search models generate balanced growth paths (BGPs)—equilibria where unemployment, vacancies, and job flows remain steady as search frictions decline. Martellini and Menzio (2020) claim that such paths exist only when matches are “inspection goods” and match quality follows a Pareto distribution. We show that these conditions are sufficient but not necessary.
Elizabeth Llanes, Jeffrey Thompson, and Alice Henriques VolzThe question of whether affluent households save at a higher rate than other parts of the distribution has been asked by economists on numerous occasions since the 1950s. It is standard in this research to define affluent, or “rich,” households as those with high lifetime earnings or income to better ground the empirical question in relevant theory.
Marc Rysman, Shuang Wang, and Krzysztof WozniakWe use consumer panel scanner data to examine households' payment choices, a new application of such data. In particular, we study the long-term shift towards payment cards, as well as the role of transaction size in determining choices. We find that idiosyncratic household preferences are a key driver of payment choice.
Sirio AramonteAfter the Global Financial Crisis, the liquidity-supply ecosystem that underpins nonbank intermediation shifted away from traditional dealers. Instead, it started to rely more on intermediaries with fragile funding structures and opportunistic investment strategies. Over the years, stress episodes saw the sudden retrenchment of these intermediaries, which amplified liquidity imbalances and market malfunction.
Neil Mehrotra, Hyunseung Oh, and Julio L. OrtizUsing industry-level panel data and plausibly exogenous variation in supply conditions, we estimate the elasticity of retail price margins with respect to inventories along the retailer's optimal pricing curve. We find that this elasticity is negative and statistically significant, implying that lower finished-good inventories lead to higher price margins.
Hsinyu (Samuel) Tseng, Douglas A. WebberWe use the longitudinal component of the Current Population Survey to compare transition rates into and out of disability and employment prior to and after the onset of the pandemic. We find that one-third of the increased employment rate among disabled people is due to the excess incidence of disability seen following the pandemic, while the other two-thirds is attributable to higher participation among people whose disabilities were unrelated to the pandemic.
Eirik Eylands BrandsaasHousing is the largest asset in U.S. household portfolios, and first-time homebuyers increasingly rely on parental transfers. This paper quantifies the contribution of parental transfers to the homeownership rate of young households. I build and estimate a life-cycle overlapping generations model with housing, where adult children and parents interact without commitment. I find that parental transfers account for 13 percentage points (27%) of young households' homeownership.
Jillian Mascelli and Megan RoddenThis paper analyzes the risks posed by future-state quantum computers, specifically the “harvest now decrypt later” (HNDL) risk. We review foundational concepts of quantum computing to address the present and ongoing threat of HNDL to currently protected data. We use the Bitcoin network as an illustrative example to study the implications of HNDL for distributed ledger cryptocurrency networks that rely upon traditional cryptography.
