Alyssa Anderson and Manjola TaseWe document the existence of a regulatory premium in the federal funds market related to the implementation of the Liquidity Coverage Ratio (LCR). We use difference-in-differences analysis and confidential bank level data on borrowing in the fed funds and Eurodollar markets to compare the interest rates paid by banks subject to daily reporting of their liquidity profile (daily reporters) relative to other banks.
Ufuk Akcigit, Harun Alp, André Diegmann, and Nicolas Serrano-VelardeThis paper investigates a unique policy designed to maintain employment during the privatization of East German firms after the fall of the Iron Curtain. The policy required new owners of the firms to commit to employment targets, with penalties for non-compliance. Using a dynamic model, we highlight three channels through which employment targets impact firms: distorted employment decisions, increased productivity, and higher exit rates.
Manuel González-Astudillo and Rakeen TanvirThis paper estimates a time-varying reaction function of the median participant of the Federal Open Market Committee, using a Taylor rule with time-varying coefficients estimated on one- to three-year ahead median forecasts of the federal funds rate, inflation, and the unemployment rate from the Summary of Economic Projections (SEP). We estimate the model with Bayesian methods, incorporating the effective lower bound on the median federal funds rate projections.
Isabel Cairo, Hess Chung, Francesco Ferrante, Cristina Fuentes-Albero, Camilo Morales-Jimenez, Damjan PfajfarThe deep deterioration in the labor mar
Christopher Gust, Kyungmin Kim and Romina RuprechtWe propose a parsimonious framework to understand how the issuance of central bank digital currency (CBDC) might affect the financial system, the Federal Reserve’s balance sheet, and the implementation of monetary policy.
Celso Brunetti, Nathan Foley-Fisher, Stéphane VeraniFinancial intermediaries manage myriad interest rate risk exposures. We propose a new method to measure financial intermediaries' residual interest rate risk using high-frequency financial market data. Our method exploits all available high-frequency information and is valid under extremely weak assumptions.
Joakim A. WeillThis paper examines the provision of official flood risk information in the United States and its distributional impacts on residential flood insurance take-up. Assembling all flood maps produced after Hurricane Katrina, I document that updated maps decreased the number of properties zoned in high-risk floodplains and incorrectly omitted five million properties, primarily in neighborhoods with more Black and Hispanic residents.
Isabel Cairó, Avi LiptonBlack workers experience a higher unemployment rate, as well as more volatile employment dynamics, than white workers, and the racial unemployment rate gap is largely unexplained by observable characteristics. We develop a New Keynesian model with search and matching frictions in the labor market, endogenous separations, and employer discrimination against Black workers to explain these outcomes.
Martin Bodenstein, Pablo Cuba Borda, Nils Gornemann, Ignacio Presno, Andrea Prestipino, Albert Queralto, and Andrea RaffoWe develop a two-country macroe
Aleksander Berentsen, Hugo van Buggenum, Romina RuprechtMajor central banks remunerate reserves at negative rates (NIR). To study the long-run effects of NIR, we focus on the role of reserves as intertemporal stores of value that are used to settle interbank liabilities. We construct a dynamic general equilibrium model with commercial banks holding reserves and funding investments with retail deposits.
