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.
Vacancy Durations and Entry Wages: Evidence from Linked Vacancy-Employer-Employee Data 3 May 2023 Andreas I. Mueller, Damian Osterwalder, Josef Zweimüller, and Andreas KettemannThis paper explores the relationship between the duration of a vacancy and the starting wage of a new job, using linked data on vacancies, the posting establishments and the workers eventually filling the vacancies.
Bilateral Trade Imbalances 1 May 2023 Alejandro Cuñat and Robert ZymekIf sectoral trade flows obey structural gravity, countries’ bilateral trade imbalances are the result of macro trade imbalances, “triangular trade”, or pairwise asymmetric trade barriers. Using data for 40 major economies and the Rest of the World, we show that large and pervasive asymmetries in trade barriers are required to account for most of the observed variation in bilateral imbalances.
Optimal Long-Term Health Insurance Contracts: Characterization, Computation, and Welfare Effects 1 May 2023 Soheil Ghili, Benjamin Handel, Igal Hendel, and Michael WhinstonReclassification risk is a major concern in health insurance where contracts are typically one year in length but health shocks often persist for much longer. While most health systems with private insurers pair short-run contracts with substantial pricing regulations to reduce reclassification risk, long-term contracts with one-sided insurer commitment have significant potential to reduce reclassification risk without the negative side effects of price regulation, such as adverse selection.
Mortgage Design and Slow Recoveries. The Role of Recourse and Default. 1 May 2023 Pedro Gete and Franco ZecchettoWe show that mortgage recourse systems, by discouraging default, magnify the impact of nominal rigidities. They cause deeper and more persistent recessions. This mechanism can account for up to 31% of the recovery gap during the Great Recession between the U.S., mostly a non-recourse economy, and Spain, a recourse economy.
