Estimating Welfare Effects in a Nonparametric Choice Model: The Case of School Vouchers 27 July 2025 Vishal Kamat and Samuel NorrisWe develop new robust discrete choice tools to learn about the average willingness to pay for a price subsidy and its effects on demand given exogenous, discrete variation in prices. Our starting point is a nonparametric, nonseparable model of choice. We exploit the insight that our welfare parameters in this model can be expressed as functions of demand for the different alternatives. However, while the variation in the data reveals the value of demand at the observed prices, the parameters generally depend on its values beyond these prices.
Bewley Banks 20 July 2025 Rustam Jamilov and Tommaso MonacelliHow do movements in the distributions of bank size and income affect the macroeconomy? To answer this question we develop a dynamic general equilibrium model with heterogeneous financial intermediaries, incomplete markets, and aggregate uncertainty. We find that market incompleteness and uninsured idiosyncratic bank rate of return risk generate minimal concentration in the bank net worth distribution, leading to an “as-if” result, whereby the economy behaves as if it had a representative bank.
Excellence in Refereeing Award 2024 20 July 2025 The winners of the Excellence in Refereeing Award for 2024 announced.
Capital Requirements with Non-Bank Finance 16 July 2025 Kyle DempseyI quantitatively analyze the macroeconomic impacts of raising capital requirements in a model in which heterogeneous firms may choose either intermediated or direct finance. Heterogeneous banks compete with other banks and the bond market, fund loans with insured deposits and costly equity (subject to a minimum capital to asset ratio), and monitor borrowers. I find that tighter capital requirements reduce costly bank failures while having only small effects on key macroeconomic aggregates, and that raising capital requirements above current levels can be welfare-improving.
The Micro and Macro Effects of Changes in the Potential Benefit Duration 13 July 2025 Jonas Jessen, Robin Jessen, Ewa Gałecka-Burdziak, Marek Góra, and Jochen KluveWe quantify micro and macro effects of changes in the potential benefit duration (PBD) in unemployment insurance. In Poland, the PBD is 12 months for the newly unemployed if the previous year’s county unemployment rate is more than 150% of the national average, and 6 months otherwise. We exploit this cut-off using regression discontinuity estimates on registry data containing the universe of unemployed from 2005 to 2019.
Does Tax-Benefit Linkage Matter for the Incidence of Payroll Taxes? 13 July 2025 Antoine Bozio, Thomas Breda, Julien Grenet, and Arthur GuillouzouicWe analyze earnings responses to six large payroll tax and income tax reforms in France. Our findings indicate full pass-through to workers when there is a strong and transparent link between contributions and expected benefits. In contrast, employer payroll taxes with no tax-benefit linkage exhibit limited pass-through to workers, while income tax nominally borne by employees show nearly full pass-through.
A Tale of Two Networks: Common Ownership and Product Market Rivalry 13 July 2025 Florian Ederer and Bruno PellegrinoWe study the welfare implications of the rise of common ownership in the United States from 1995 to 2021. We build a general equilibrium model with a hedonic demand system in which firms compete in a network game of oligopoly. Firms are connected through two large networks: the first reflects ownership overlap, the second product market rivalry. In our model, common ownership of competing firms induces unilateral incentives to soften competition and the magnitude of the common ownership effect depends on how much the two networks overlap.
Counterfactual Identification and Latent Space Enumeration in Discrete Outcome Models 13 July 2025 Jiaying Gu, Thomas M. Russell, and Thomas StringhamThis paper provides a unified framework for studying the identification of counterfactual parameters in a general class of discrete outcome models, allowing for endogenous regressors and multidimensional latent variables, all without parametric distributional assumptions. Our main theoretical result is that, when the covariates are discrete, the infinite-dimensional latent variable distribution can be replaced with a finite-dimensional version that is equivalent from an identification perspective.
