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.
The Effects of Partial Employment Protection Reforms: Evidence from Italy 5 February 2023 Diego Daruich, Sabrina Di Addario, and Raffaele SaggioWe combine matched employer-employee data with firms’ financial records to study a 2001 Italian reform that lifted constraints on the employment of temporary contract workers while maintaining rigid employment protection regulations for employees hired under permanent contracts.
Regional Consumption Responses and the Aggregate Fiscal Multiplier 5 February 2023 Bill Dupor, Marios Karabarbounis, Marianna Kudlyak, and M. Saif MehkariWe use regional variation in the American Recovery and Reinvestment Act (2009-2012) to analyze the effect of government spending on consumer spending.
Down the River: Glyphosate Use in Agriculture and Birth Outcomes of Surrounding Populations 30 January 2023 Mateus Dias, Rudi Rocha, and Rodrigo R. SoaresThis paper documents an externality from the agricultural use of the most widely applied herbicide in the world—glyphosate—on birth outcomes of surrounding populations.
