Vector Autoregressive Modeling of Interest Rate Shocks on Bank Balance Sheets: A Comparative Study

By Sara Diressova, Princeton University

Di Tella and Kurlat (2017) and Drechser et al. (2017a) study the effects of a nominal interest rate shock on various bank balance sheet variables. I study the same relationships using a VAR model, to understand them over multiple periods of time, without assumptions of exogeneity, and with clear interactions between variables through impulse response functions (Hamilton 1994). I find that … Continue reading Vector Autoregressive Modeling of Interest Rate Shocks on Bank Balance Sheets: A Comparative Study

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BLOG: Employment Effects of Minimum Wage Increases – A Matched Pairs Design Using US Data

By Eric Karsten, Chong An Ong, Immanuel Adriana Rakshana, and Arushi Saksena, University of Chicago 

The minimum wage is a contentious issue, with proponents arguing that it is required to protect the wage security of low-income earners, and opponents arguing that it places downwards pressure on employment in the labor market. Our paper uses a differences in differences regression model, similar to the one used in Card & Krueger(1993) to estimate the unemployment effects of a minimum wage increase. Continue reading BLOG: Employment Effects of Minimum Wage Increases – A Matched Pairs Design Using US Data

BLOG: Market Distorting Moral Hazard of Dodd-Frank’s Title II: The Costs of Inefficient Capital Markets

By Charles LeSueur, Vassar College

The purpose of this paper is to analyze whether Title II of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) effectively fulfills the stated goals of ending “too big to fail”, “no more taxpayer-funded bailouts”, and decreasing systemic risk.  I argue that Title II institutionalized taxpayer-funded bailouts under different language and increased systemic risk … Continue reading BLOG: Market Distorting Moral Hazard of Dodd-Frank’s Title II: The Costs of Inefficient Capital Markets

Developing Stock Markets and the Real Economy: Investigating Chinese Stock Market Turbulences in the Past 18 years

By Wei Wang. University of California, Berkeley

This study investigates the relationship between developing stock markets and the real economy by examining the effect of stock market crashes on… Continue reading Developing Stock Markets and the Real Economy: Investigating Chinese Stock Market Turbulences in the Past 18 years

How Does Technology Affect Skill Demand? Technical Changes and Capital-Skill Complementarity in the 21st Century

By Yifan (Eva) Gong. Macalester College.

This paper attempts to examine technology’s impact on the labor market through the lens of skilled labor. Technical changes in the late 20th century are skill-biased… Continue reading How Does Technology Affect Skill Demand? Technical Changes and Capital-Skill Complementarity in the 21st Century

European Integration as a Determinant of Foreign Direct Investment in Central and Eastern Europe, 1995-2013

By Domagoj Babic. Princeton University.

When companies choose to undertake foreign direct investments (FDI) in emerging countries (such as those in Central and Eastern Europe) rather than… Continue reading European Integration as a Determinant of Foreign Direct Investment in Central and Eastern Europe, 1995-2013

Financial Development and Economic Growth at Different Income Levels

By Cody Kallen. Washington University of St. Louis.

This paper examines the effects of financial development on growth rates using a sample of countries at different points in time, with the observation for each country beginning at the year it reaches a GDP per capita of $10,000 in constant 2005 dollars. Continue reading Financial Development and Economic Growth at Different Income Levels