Kabir Dasgupta, Jennifer Fernandez, and Alicia LloroThis study examines financial challenges faced by justice-involved individuals using 2023-2024 Survey of Household Economics and Decisionmaking data. Individuals with justice system contact experience substantially worse financial outcomes than those without criminal records, with disparities widening by severity of involvement.
Benjamin Knox and Annette Vissing-JorgensenWe survey and extend work on the Federal Reserve’s effect on the stock market, focusing on three empirical findings: The effect of monetary policy surprises in a narrow window around announcements from the Federal Open Market Committee (FOMC), the pre-FOMC announcement drift, and the FOMC cycle in stock returns.
Margaret M. JacobsonThis paper shows that expected capital gains in several MSAs were higher for relatively lower-priced, rather than higher-priced, houses during the U.S. boom of the 2000s. Because buyers of lower-priced houses tend to be more sensitive to credit conditions than buyers of higher-priced houses, this paper documents patterns that are consistent with an interaction of beliefs and credit conditions in a time period where direct evidence on house price beliefs is scarce.
Pawel M. Krolikowski and Andrew H. McCallumWe study tariffs in a general equilibrium dynamic model with search frictions between heterogeneous exporting producers and importing retailers. We show the model has a unique equilibrium and analytically characterize home unilateral import tariffs that maximize welfare given a passive foreign country.
Ander Perez-Orive, Yannick Timmer, Alejandro van der GhoteWe revisit the credit channel of monetary policy when firms face multiple financing constraints. 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.
Anne Lundgaard HansenThis paper proposes a validation framework for LLM-generated measurements when reliable benchmarks are unavailable. Validity is established by testing whether an LLM can reconstruct passages from annotated labels while maintaining semantic consistency with the original text. The framework avoids circular reasoning by establishing testable prerequisite properties that must be met for a validation to be considered successful.
Leland D. Crane and Paul E. SotoWe evaluate whether LLMs have had any discernible impact on the aggregate labor market so far. We focus on occupations that are computer programming-intensive, motivated by data showing that coding is one of the most LLM-exposed tasks. Linking O*NET to CPS we find that aggregate employment of coders has decelerated sharply since the introduction of ChatGPT.
Akos Horvath and Benjamin S. KayBuilding on queuing theory, we develop and empirically validate a novel theoretical model of residential mortgage supply. Our model gives insight into how the stochastic arrival and sequential servicing of loan applications affect mortgage origination. The model provides closed-form predictions for lenders’ optimal response to changes in the level and price elasticity of mortgage demand.
Erik HeitfieldThis paper examines how model uncertainty affects the price of catastrophe risk insurance. We use unique data on expected loss rate projections from seven hurricane risk models approved by regulators for use in Florida property insurance rate setting to quantify model uncertainty.
