Although a fundamental shock might trigger an asset boom, aggressive lending can push asset prices higher, leading to more lending, and so on. If viable, VCs Policy research division working papers funding for the next stage. Louis working papers are preliminary materials circulated to stimulate discussion and critical comment.
In particular, during recessions, the endogenous higher exit probability for smaller firms implies that they place lower weight on future profits, leading them to charge higher Policy research division working papers.
We prove that for a large class of preferences, the optimal capital income tax along the transition path and in steady state is non-zero. These facts can be largely accounted for in a straightforward extension of a workhorse model of defaultable debt that accommodates a simple form of heterogeneity in time preference but not otherwise.
We estimate the model to match key cross-sectional differences across countries: Non-tariff barriers are shown to be unambiguously welfare-reducing, and tariff barriers raise welfare only when associated terms-of-trade gains exceed resulting regulatory burdens, in which case there is a positive optimal offshoring tax.
This suggests that something other than sequential service is needed to help explain runs. Further, increases in county farm land values and mortgage debt were correlated with the number of local banks ex ante and increases in bank loans during the boom. In the context of unconditional forecasts, Marcellino, Stock, and Watson MSW, investigate the empirical relevance of these theories.
Quantitatively, however, only the menu cost model, through its selection effect, can match the extent of the empirical heterogeneity in markup cyclicality. Martin Working Paper A updated January We examine the conduct of monetary policy in a world where the supply of outside money is controlled by the fiscal authority-a scenario increasingly relevant for many developed economies today.
The failure of shorts to reinstitute their positions after the last purchase announcement confirms that the Fed convinced sophisticated investors that interest rates would remain low.
The proofs rely on novel recursive techniques and martingale arguments. Ravikumar Working Paper A updated June We study a model of endogenous means testing where households differ in their income and where the in-kind transfer received by each household declines linearly with income.
Estimated vacancy rates, conditional on the vacancy regime, vary across regions in all models. How- ever, currency in most economies is a uniform object, and there may be incentive compatible allocations that cannot be implemented with a uniform currency. The novel ingredient is an explicit secondary market with trading frictions which leads to a liquidity spread which increases with maturity and generates an upward sloping yield curve.
Because the rating technology is imperfect, this premium is insufficient to induce the efficient level of screening. At each stage of financing, venture capitalists evaluate the viability of startups. Cardak, Gerhard Glomm, and B. In addition, Non-Ricardian regimes may suffer from multiplicity of steady-states when the government runs persistent deficits.
If, as in Skreta and Veldkampwe associate the expansion leading up to the recent financial crisis with declining rating accuracy, our model helps interpret several puzzling pre-crisis observations: The model is parameterized to match key features of fi rm-level data.
In response to the decline in permanent income, households delay replacing existing vehicles, allowing them smooth the effects of the income shock without significantly adjusting the service flow from their vehicles.
We find that these differences amplify the response of emerging economies to fluctuations in commodity prices.
When the agent has CARA utility, we also analytically and numerically characterize the short-run properties of the optimal contract. We show in a two-country setting with borrowing constraints that international credit markets are subject to self-fulfilling variations in the world real interest rate.
Central bank control over the long-run inflation rate depends on whether fiscal policy is Ricardian or Non-Ricardian. In particular, I test the markup behavior of the following two models: Such a dynamic seems to have characterized the agricultural land boom surrounding World War I.
This paper examines if the prominent models in the literature are consistent with the empirical findings of micro-level markup behavior in Hong These fi ndings are consistent with estimates from cross-country industry-level and aggregate data. Saif Mehkari Working Paper A updated March We use regional variation in the American Recovery and Reinvestment Act to analyze the e ect of government spending on consumer spending.
Our monetary mechanism with currency reform is anonymous and features nonlinear pricing of consumption goods and future assets, as observed in practice.
State deposit insurance systems amplified the impact of rising crop prices on the size and risk of bank portfolios, while higher minimum capital requirements dampened the effects. Such an approach is strongly supported by our empirical results. The same model mechanism also helps explain the variation in default rates across asset classes documented in Cornaggia, Cornaggia, and Hund OCE economists and their collaborators conduct a variety of policy relevant research and make their preliminary findings available as working papers.
The Institute has set up the Centre for WTO Studies, Centre for International Trade in Technology (CITT) and Centre for SMEs as part of its efforts to focus on important international trade policy issues. The World Bank's Policy Research Report series brings to a broad audience the results of World Bank research on development policy.
The reports are designed to contribute to the debate on appropriate public policies for developing economies. Policy Research Working Papers; World Development Reports; MULTIMEDIA. Previous 1 / 3 Next. Video. Policy Research Working Papers > Regionalism versus Multilateralism Share Page.
Add to Favorites; Email; Download Citation; Get Citation Alert This paper - a product of the International Trade Division, International Economics Department - was prepared for a conference on regional integration sponsored by the Centre for Economic Policy.
Population Council Policy Research Division Working Papers Population Research Center Discussion Papers (NORC/U Chicago) Population Research Institute Working Papers (Penn State).
Federal Reserve Bank of St. Louis Working Papers are preliminary materials circulated to stimulate discussion and critical comment. Majority voting determines the two dimensions of public policy: the size of the welfare program and the means-testing rate.
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