International Spillovers and Bailouts 14 February 2023 Marina Azzimonti and Vincenzo QuadriniWe study how cross-country macroeconomic spillovers caused by sovereign default affect equilibrium bailouts.
Human Capital, Female Employment, and Electricity: Evidence from the Early 20th-Century United States 12 February 2023 Daniela VidartThis paper revisits the link between electrification and the rise in female labor force participation (LFP), and presents theoretical and empirical evidence showing that electrification triggered a rise in female LFP by increasing market opportunities for skilled women.
The Cost of Wage Rigidity 12 February 2023 Ester Faia and Vincenzo PezonePrivate efficiency of wage rigidity has taken center stage in economics. Measuring its effects has proven elusive for lack of actual wage data.
Dynamic Asset-Backed Security Design 12 February 2023 Emre Ozdenoren, Kathy Yuan, and Shengxing ZhangBorrowers obtain liquidity by issuing securities backed by the current period payoff and resale price of a long-lived collateral asset, and they are privately informed about the payoff distribution.
A Theory of Falling Growth and Rising Rents 9 February 2023 Philippe Aghion, Antonin Bergeaud, Timo Boppart, Peter J. Klenow, and Huiyu LiGrowth has fallen in the U.S. amid a rise in firm concentration. Market share has shifted to low labor share firms, while within-firm labor shares have actually risen.
Risk Classification in Insurance Markets with Risk and Preference Heterogeneity 9 February 2023 Vitor Farinha Luz, Piero Gottardi, and Humberto MoreiraThis paper studies a competitive model of insurance markets in which consumers are privately informed about their risk and risk preferences. We provide a characterization of the equilibria, which depend non-trivially on consumers’ type distribution, a desirable feature for policy analysis.
Left-Digit Bias at Lyft 8 February 2023 John A. List, Ian Muir, Devin Pope, and Gregory SunLeft-digit bias (or 99-cent pricing) has been discussed extensively in economics, psychology, and marketing. Despite this, we show that the rideshare company, Lyft, was not using a 99-cent pricing strategy prior to our study.
The Lost Capital Asset Pricing Model 8 February 2023 Daniel Andrei, Julien Cujean, and Mungo WilsonWe provide a novel explanation for the empirical failure of the CAPM despite its widespread practical use. In a rational-expectations economy in which information is dispersed, variation in expected returns over time and across investors creates an informational gap between investors and the empiricist.
