The Darwinian Returns to Scale 4 June 2023 David Rezza Baqaee, Emmanuel Farhi, and Kunal SanganiHow does an increase in market size, say due to globalization, affect welfare? We study this question using a model with monopolistic competition, heterogeneous markups, and fixed costs. We characterize changes in welfare and decompose changes in allocative efficiency into three different effects.
Is the Social Safety Net a Long-Term Investment? Large-Scale Evidence from the Food Stamps Program 4 June 2023 Martha Bailey, Hilary Hoynes, Maya Rossin-Slater, and Reed WalkerWe use novel, large-scale data on 17.5 million Americans to study how a policy-driven increase in economic resources affects children’s long-term outcomes. Using the 2000 Census and 2001-2013 American Community Survey linked to the Social Security Administration’s NUMIDENT, we leverage the county-level roll-out of the Food Stamps program between 1961 and 1975.
Resolving Failed Banks: Uncertainty, Multiple Bidding & Auction Design 4 June 2023 Jason Allen, Robert Clark, Brent Hickman, and Eric RichertThe FDIC resolves insolvent banks with scoring auctions. Although the structure of the scoring rule is known to bidders, they are uncertain about how the FDIC trades off different bid components. Scoring-rule uncertainty motivates bidders to submit multiple bids for the same failed bank.
The Slaughter of the Bison and Reversal of Fortunes on the Great Plains 24 May 2023 Donn. L. Feir, Rob Gillezeau, and Maggie E.C. JonesIn the late nineteenth century, the North American bison was brought to the brink of extinction in just over a decade. We demonstrate that the loss of the bison had immediate, negative consequences for the Native Americans who relied on them and ultimately resulted in a permanent reversal of fortunes. Once amongst the tallest people in the world, the generations of bison-reliant people born after the slaughter lost their entire height advantage.
The Effect of Wealth on Worker Productivity 24 May 2023 Jan Eeckhout and Alireza SepahsalariWe propose a theory that analyzes how a workers’ asset holdings affect their job productivity. In a labor market with uninsurable risk, workers choose to direct their job search trading off productivity and wages against unemployment risk. Workers with low asset holdings have a precautionary job search motive, they direct their search to low productivity jobs because those offer a low risk at the cost of low productivity and a low wage.
Selfish Corporations 21 May 2023 Emanuele Colonnelli, Niels Joachim Gormsen, and Tim McQuadeWe study how perceptions of corporate responsibility influence policy preferences and the effectiveness of corporate communication when agents have imperfect memory recall. Using a new large-scale survey of U.S. citizens on their support for corporate bailouts, we first establish that the public demands corporations to behave better within society, a sentiment we label “big business discontent.”
Deadly Debt Crises: COVID-19 in Emerging Markets 21 May 2023 Cristina Arellano, Yan Bai, and Gabriel MihalacheEmerging markets have experienced large human and economic costs from COVID- 19, and their tight fiscal space has limited the support extended to their citizens. We study the impact of an epidemic on economic and health outcomes by integrating epidemiological dynamics into a sovereign default model.
REStud North America Tour 2023 - tourists announcedREStud North America Tour 2023 – tourists announced 12 May 2023 The 2023 North America Tour will be hosted by Brown University, Rice University, and (jointly) the St. Louis Fed and Washington University of St. Louis.
