Atlanta Fed Working Papers
The Research Department of the Federal Reserve Bank of Atlanta publishes a working paper series to convey the research of staff economists and visiting scholars and stimulate professional discussion and exploration of economic and financial subjects.
Simon Gilchrist, Bin Wei, Vivian Z. Yue, and Egon Zakrajšek
Working Paper 2021-27
Studying the interplay between sovereign risk and global financial risk, the authors find that changes in global financial risk account for a substantial portion of the comovement among sovereign spreads and that an increase in global financial risk causes a large and persistent widening of sovereign bond spreads.
Michael Darden, David Dowdy, Lauren Gardner, Barton H. Hamilton, Karen Kopecky, Melissa Marx, Nicholas W. Papageorge, Daniel Polsky, Kimberly Powers, Elizabeth Stuart, and Matthew Zahn
Working Paper 2021-26
Divergent policy recommendations from economists and epidemiologists during the pandemic led to uncertainty and confusion among the public and policymakers. To find consensus, an interdisciplinary group of scholars discusses the sources of these differences and a path forward for more effective synergy between disciplines.
Juan Antolín-Díaz, Ivan Petrella, and Juan F. Rubio-Ramírez
Working Paper 2021-25
Studying the dynamics of aggregate stock returns and dividends, the authors show that omitting dividend growth from the system amounts to imposing the extra restriction that dividend growth is not persistent. Their estimation leads to a much more moderate degree of return predictability and better out-sample forecast performance.
Francesco Furlanetto, Antoine Lepetit, Ørjan Robstad,
Juan Rubio-Ramírez, and Pål Ulvedal
Working Paper 2021-24
The authors examine the kind of demand shocks that can have a permanent effect on output. They find that recessions driven by permanent demand shocks lead to a permanent decline in employment and investment, although output per worker is largely unaffected.
Working Paper 2021-23
Reviewing evidence on large firms and strategies that hinder creative destruction and reallocation, the author finds that as firms gain market share, they increasingly rely on nonproductive strategies but reduce their productive, innovation-based strategies.
Indrajit Mitra, Taeuk Seo, and Yu Xu
Working Paper 2021-22
The authors develop a framework to help explain how time varying risk premia lead to more volatile and persistent unemployment fluctuations. Their framework is general and characterizes the unemployment implications for a large class of risk premium processes.
Working Paper 2021-21
The author develops a generalized long-run risks model with smooth ambiguity to explain major asset-pricing puzzles—particularly, the variance premium puzzle. Reproducing the magnitude and dynamics of the variance premium in the data, the model shows that most (77 percent) of the variance premium is attributable to the ambiguity channel.
R. Anton Braun and Daisuke Ikeda
Working Paper 2021-20a
August 2021 (Revised September 2021)
The authors use an overlapping-generations model to analyze monetary policy's impact on households of different ages. They find that households between the ages of 60 and 80 benefit from a higher nominal interest rate but that other age groups lose.
Nan Li, Chris Papageorgiou, Tong Xu, and Tao Zha
Working Paper 2021-19
The authors examine the paths of domestic financial reforms in 90 countries from 1973 to 2014, finding that informational diffusion from economic and financial experiences of advanced economies played a crucial role in the policy-formation process.
Julie L. Hotchkiss, Robert E. Moore, and Fernando Rios-Avila
Working Paper 2021-18
Examining changes to the labor supply and family welfare resulting from the Tax Cuts and Jobs Act of 2017, the authors find that gains in welfare disproportionately benefited the wealthy; families with self-employment income; families with children; and families renting, versus owning, their home.
Robert Duval-Hernandez, Lei Fang, and Rachel Ngai
Working Paper 2021-17
The authors document a negative cross-country correlation between gender ratios in market hours and wages. The effects of taxes and social subsidies on family care through the marketization of female home hours are important in accounting for the cross-country differences.
Leonid Kogan and Indrajit Mitra
Working Paper 2021-16
The authors propose a general simulation-based procedure for estimating the quality of approximate policies in heterogeneous-agent equilibrium models. Their method is general and straightforward to implement and can be used in conjunction with various solution algorithms.
Elias Ilin and Ellyn Terry
Working Paper 2021-15a
June 2021 (Revised 2021)
Using individual-level data from the Current Population Survey, the authors develop a novel method to project location-specific life-cycle wages for all occupations listed in the Occupational Outlook Handbook from the U.S. Bureau of Labor Statistics.
Working Paper 2021-14
Exploring one aspect of the trade shock brought on by WWI, the author finds that the demand shock that emanated from belligerent countries caused drastic increases in wages and consumer prices, as well as a reallocation of labor, in neutral Spain.
Joonkyu Choi, Veronika Penciakova, and Felipe Saffie
Working Paper 2021-13
Using data from the American Recovery and Reinvestment Act, the authors show that firms use their political connections to win stimulus grants and that public expenditure, when channeled through politically connected firms, hinders job creation.
Brent H. Meyer, Nicholas B. Parker, and Xuguang Simon Sheng
Working Paper 2021-12a
March 2021 (Revised November 2021)
Examining firms' inflation perceptions, expectations, and uncertainty, the authors find that firms' expectations for the nominal side of the economy have little in common with households' expectations, moving instead in tandem with inflation expectations of professional forecasters and market participants.
Claire Greene, Brian Prescott, and Oz Shy
Working Paper 2021-11
Examining consumer preferences for person-to-person payments, the authors find about two thirds of consumers have a first preference for cash. The remaining one third rank checks first. About 93 percent of consumers rank electronic technologies second. Transaction value, age, and education influence payment choice.
Working Paper 2021-10
What is the ideal way for a researcher to obtain quality count data from survey respondents? The author explores the potential tradeoffs between recall and diaries, suggesting that a hybrid survey design can offer researchers considerable benefits.
Working Paper 2021-9
Exploring survey-based inference, the author notes the importance of adjusting for discrepancies between the types of household members recruited and the target population. Researchers who rely on surveys should consider how variables of interest might vary within households and link to respondent selection.
Working Paper 2021-8
Exploring how mixed-gender couples divide household responsibility, the author finds that females consistently shoulder more responsibility for household shopping than males. For financial decision making, however, responsibility aligns with income and educational standing. Gender skew in roles seems to relate to aggregate household education, though not age.
Lei Fang and Fang Yang
Working Paper 2021-7
The authors find that while labor efficiency and home productivity are crucial in accounting for the differences in the allocation of time over the life cycle between the United States and France, consumption tax and social security are more important regarding allocation of expenditures.
Pierre Olivier Gourinchas, Şebnem Kalemli-Özcan, Veronika Penciakova, and Nick Sander
Working Paper 2021-6
The authors assess the prospects of a 2021 increase in failures among small and medium-sized enterprises triggered by policies enacted during the COVID-19 crisis. Policies themselves don't create a 2021 time bomb for these enterprises, but the contraction of credit to the corporate sector could trigger failures.
Ermin Dinlersoz, Timothy Dunne, John Haltiwanger, and Veronika Penciakova
Working Paper 2021-5
While business applications fell slowly and persistently during the Great Recession, they followed a V-shaped pattern during the COVID-19 recession. Furthermore, the authors find that the changing composition of business applications in 2020 suggests a higher surge in new nonemployer businesses relative to new employer businesses.
Jesús Fernández-Villaverde, Federico S. Mandelman, Yang Yu, and Francesco Zanetti
Working Paper 2021-4
The authors show that search complementarities amplify small differences in productivity among firms. Market concentration fosters monopsony power in the labor market, magnifying profits and further enhancing the output share of high-productivity firms.
Jose Maria Barrero, Nicholas Bloom, Steven J. Davis, and Brent H. Meyer
Working Paper 2021-3a
January 2021 (Revised March 2021)
Discussing evidence of COVID-19's effects as a reallocation shock, the authors of this working paper find, among other effects, that the pandemic has shifted relative employment growth trends in favor of industries with a high capacity of employees to work from home and against those with a low capacity for teleworking.
Brent Meyer, Emil Mihaylov, Steven J. Davis, Nicholas Parker, David Altig, Jose Maria Barrero, and Nicholas Bloom
Working Paper 2021-2
Using data from the Survey of Business Uncertainty, the authors make observations about pandemic-era uncertainty in the U.S. economy, including how overall uncertainty continues to substantially dampen capital spending plans, pointing to a source of weak growth in demand and potential gross domestic product.
Roozbeh Hosseini, Karen Kopecky, and Kai Zhao
Working Paper 2021-1a
January 2021 (Revised November 2021)
The authors of this working paper show that poor health accounts for nearly one third of the variation in lifetime earnings at age 65, primarily because it increases eligibility for social security disability benefits. Despite this, they find that these benefits are valuable and should be even more generous.