Recent ucscecon_oapdeposits items

Spatial consumption risk sharing

Mon, 5 Jan 2026 00:00:00 +0000

Spatial consumption risk sharing

u* = √uv: The Full-Employment Rate of Unemployment in the United States

Thu, 11 Sep 2025 00:00:00 +0000

u* = √uv: The Full-Employment Rate of Unemployment in the United States

Pace of adoption of alternatives to animal-source foods is an important factor in reaching climate goals

Sat, 19 Jul 2025 00:00:00 +0000

The global food system is a significant contributor to greenhouse gas emissions that drive climate change. Animal agriculture accounts for a large share of food-system emissions, both directly and through the production of animal feed. Global population growth and rising incomes imply a further increase in demand for animal-source foods if current trends persist. Limiting global warming to the targets set by the international community will not be possible without the rapid reduction of a substantial share of animal-source foods. We show that the rapid adoption of alternatives to animal-source foods, such as plant-only diets or plant-based, cultured, or fermentation-derived analogs to animal products, can be consistent with climate goals while satisfying global demand for calories and protein. Importantly, timing is crucial: the longer the delay in adopting alternatives, the larger the share of the diet that must shift away from animal-source food by 2050 for the food system to...

Critical Values Robust to P-hacking

Fri, 13 Jun 2025 00:00:00 +0000

P-hacking is prevalent in reality but absent from classical hypothesis testing theory. As a consequence, significant results are much more common than they are supposed to be when the null hypothesis is in fact true. In this paper, we build a model of hypothesis testing with p-hacking. From the model, we construct critical values such that, if the values are used to determine significance, and if scientists' p-hacking behavior adjusts to the new significance standards, significant results occur with the desired frequency. Such robust critical values allow for p-hacking so they are larger than classical critical values. To illustrate the amount of correction that p-hacking might require, we calibrate the model using evidence from the medical sciences. In the calibrated model the robust critical value for any test statistic is the classical critical value for the same test statistic with one fifth of the significance level.

Beveridgean Unemployment Gap

Fri, 13 Jun 2025 00:00:00 +0000

This paper develops a sufficient-statistic formula for the unemployment gap -- the difference between the actual unemployment rate and the efficient unemployment rate. While lowering unemployment puts more people into work, it forces firms to post more vacancies and to devote more resources to recruiting. This unemployment-vacancy tradeoff, governed by the Beveridge curve, determines the efficient unemployment rate. Accordingly, the unemployment gap can be measured from three sufficient statistics: elasticity of the Beveridge curve, social cost of unemployment, and cost of recruiting. Applying this formula to the United States, 1951--2019, we find that the efficient unemployment rate averages 4.3%, always remains between 3.0% and 5.4%, and has been stable between 3.8% and 4.6% since 1990. As a result, the unemployment gap is countercyclical, reaching 6 percentage points in slumps. The US labor market is therefore generally inefficient and especially inefficiently slack in slumps. In...

Pricing under Fairness Concerns

Fri, 13 Jun 2025 00:00:00 +0000

This paper proposes a theory of pricing premised upon the assumptions that customers dislike unfair prices---those marked up steeply over cost---and that firms take these concerns into account when setting prices. Since they do not observe firms' costs, customers must extract costs from prices. The theory assumes that customers infer less than rationally: when a price rises due to a cost increase, customers partially misattribute the higher price to a higher markup---which they find unfair. Firms anticipate this response and trim their price increases, which drives the passthrough of costs into prices below one: prices are somewhat rigid. Embedded in a New Keynesian model as a replacement for the usual pricing frictions, our theory produces monetary nonneutrality: when monetary policy loosens and inflation rises, customers misperceive markups as higher and feel unfairly treated; firms mitigate this perceived unfairness by reducing their markups; in general equilibrium, employment...

Resolving New Keynesian Anomalies with Wealth in the Utility Function

Fri, 13 Jun 2025 00:00:00 +0000

At the zero lower bound, the New Keynesian model predicts that output and inflation collapse to implausibly low levels, and that government spending and forward guidance have implausibly large effects. To resolve these anomalies, we introduce wealth into the utility function; the justification is that wealth is a marker of social status, and people value status. Since people partly save to accrue social status, the Euler equation is modified. As a result, when the marginal utility of wealth is sufficiently large, the dynamical system representing the zero-lower-bound equilibrium transforms from a saddle to a source---which resolves all the anomalies.

An Economical Business-Cycle Model

Fri, 13 Jun 2025 00:00:00 +0000

This paper develops a new model of business cycles. The model is economical in that it is solved with an aggregate demand-aggregate supply diagram, and the effects of shocks and policies are obtained by comparative statics. The model builds on two unconventional assumptions. First, producers and consumers meet through a matching function. Thus, the model features unemployment, which fluctuates in response to aggregate demand and supply shocks. Second, wealth enters the utility function, so the model allows for permanent zero-lower-bound episodes. In the model, the optimal monetary policy is to set the interest rate at the level that eliminates the unemployment gap. This optimal interest rate is computed from the prevailing unemployment gap and monetary multiplier (the effect of the nominal interest rate on the unemployment rate). If the unemployment gap is exceedingly large, monetary policy cannot eliminate it before reaching the zero lower bound, but a wealth tax can.

$u^* = \sqrt{uv}$

Fri, 13 Jun 2025 00:00:00 +0000

This paper aims to compute the unemployment rate $u^*$ that is consistent with full employment in the United States. First, it argues that the most appropriate economic translation of the legal notion of full employment is social efficiency. Here efficiency requires to minimize the nonproductive use of labor -- both unemployment and recruiting. The nonproductive use of labor is measured by the number of jobseekers and vacancies, $u + v$. Through the Beveridge curve, the numbers of vacancies and jobseekers are inversely related, $uv = \text{constant}$. With such symmetry the labor market is efficient when there are as many jobseekers as vacancies ($u = v$), inefficiently tight when there are more vacancies than jobseekers ($v > u$), and inefficiently slack when there are more jobseekers than vacancies ($u > v$). Accordingly, the full-employment rate of unemployment (FERU) is the geometric average of the unemployment and vacancy rates: $u^* = \sqrt{uv}$. Between 1930 and 2023,...

Has the Recession Started?

Fri, 13 Jun 2025 00:00:00 +0000

To answer this question, we develop a new Sahm-type recession indicator that combines vacancy and unemployment data. The indicator is the minimum of the Sahm indicator -- the difference between the 3-month trailing average of the unemployment rate and its minimum over the past 12 months -- and a similar indicator constructed with the vacancy rate -- the difference between the 3-month trailing average of the vacancy rate and its maximum over the past 12 months. We then propose a two-sided recession rule: When our indicator reaches 0.3pp, a recession may have started; when the indicator reaches 0.8pp, a recession has started for sure. This new rule is triggered earlier than the Sahm rule: on average it detects recessions 0.8 month after they have started, while the Sahm rule detects them 2.1 months after their start. The new rule also has a better historical track record: it perfectly identifies all recessions since 1929, while the Sahm rule breaks down before 1960. With August 2024...

Beveridgean Phillips Curve

Tue, 10 Jun 2025 00:00:00 +0000

This paper proposes a new, Beveridgean model of the Phillips curve. While the New Keynesian Phillips Curve is based on monopolistic pricing under price-adjustment costs, the Beveridgean Phillips curve is based on directed-search pricing under price-adjustment costs. Under directed-search pricing, prices respond to slack instead of marginal costs. The Beveridgean Phillips curve links the inflation gap to the unemployment gap, with the following properties. First, it produces the divine coincidence: it guarantees that the rate of inflation is on target whenever the rate of unemployment is efficient. Second, whenever the Beveridge curve shifts, the Phillips curve shifts if it is formulated with inflation and unemployment, but it remains unaffected if it is formulated with inflation and labor-market tightness. Third, the Phillips curve displays a kink at the point of divine coincidence if we assume that wage decreases -- which reduce workers' morale -- are more costly to producers...

Modeling Migration-Induced Unemployment

Tue, 10 Jun 2025 00:00:00 +0000

Immigration is often blamed for increasing unemployment among local workers. This sentiment is reflected in the rise of anti-immigration parties and policies in Western democracies. And in fact, numerous studies estimate that in the short run, the arrival of new workers in a labor market raises the unemployment rate of local workers. Yet, standard migration models, such as the Walrasian model and the Diamond-Mortensen-Pissarides model, inherently assume that immigrants are absorbed into the labor market without affecting local unemployment. This paper presents a more general model of migration that allows for the possibility that not only the wages but also the unemployment rate of local workers may be affected by the arrival of newcomers. This extension is essential to capture the full range of potential impacts of labor migration on labor markets. The model blends a matching framework with job rationing. In it, the arrival of new workers raises the unemployment rate among local...

Resolving New Keynesian Anomalies with Wealth in the Utility Function

Sun, 8 Jun 2025 00:00:00 +0000

At the zero lower bound, the New Keynesian model predicts that output and inflation collapse to implausibly low levels and that government spending and forward guidance have implausibly large effects. To resolve these anomalies, we introduce wealth into the utility function; the justification is that wealth is a marker of social status, and people value status. Since people partly save to accrue social status, the Euler equation is modified. As a result, when the marginal utility of wealth is sufficiently large, the dynamical system representing the zero-lower-bound equilibrium transforms from a saddle to a source, which resolves all the anomalies.

Aggregate Demand, Idle Time, and Unemployment *

Sun, 8 Jun 2025 00:00:00 +0000

This article develops a model of unemployment fluctuations. The model keeps the architecture of the general-disequilibrium model of Barro and Grossman (1971) but takes a matching approach to the labor and product markets instead of a disequilibrium approach. On the product and labor markets, both price and tightness adjust to equalize supply and demand. Since there are two equilibrium variables but only one equilibrium condition on each market, a price mechanism is needed to select an equilibrium. We focus on two polar mechanisms: fixed prices and competitive prices. When prices are fixed, aggregate demand affects unemployment as follows. An increase in aggregate demand leads firms to find more customers. This reduces the idle time of their employees and thus increases their labor demand. This in turn reduces unemployment. We combine the predictions of the model and empirical measures of product market tightness, labor market tightness, output, and employment to assess the sources...

Persistence of false paradigms in low-power sciences

Sun, 8 Jun 2025 00:00:00 +0000

We develop a model describing how false paradigms may persist, hindering scientific progress. The model features two paradigms, one describing reality better than the other. Tenured scientists display homophily: They favor tenure candidates who adhere to their paradigm. As in statistics, power is the probability (absent any bias) of denying tenure to scientists adhering to the false paradigm. The model shows that because of homophily, when power is low, the false paradigm may prevail. Then, only an increase in power can ignite convergence to the true paradigm. Historical case studies suggest that low power comes either from lack of empirical evidence or from reluctance to base tenure decisions on available evidence.

Persistence of false paradigms in low-power sciences

Fri, 6 Jun 2025 00:00:00 +0000

Has the Recession Started?

Thu, 5 Jun 2025 00:00:00 +0000

Has the Recession Started?

Pricing Under Fairness Concerns

Thu, 5 Jun 2025 00:00:00 +0000

Abstract: This paper proposes a theory of pricing premised upon the assumptions that customers dislike unfair prices—those marked up steeply over cost—and that firms take these concerns into account when setting prices. Because they do not observe firms’ costs, customers must extract costs from prices. The theory assumes that customers infer less than rationally: When a price rises due to a cost increase, customers partially misattribute the higher price to a higher markup—which they find unfair. Firms anticipate this response and trim their price increases, which drives the passthrough of costs into prices below one: Prices are somewhat rigid. Embedded in a New Keynesian model as a replacement for the usual pricing frictions, our theory produces monetary nonneutrality: When monetary policy loosens and inflation rises, customers misperceive markups as higher and feel unfairly treated; firms mitigate this perceived unfairness by reducing their markups; in general equilibrium,...

Isolating the “Tech” from EdTech: Experimental Evidence on Computer-Assisted Learning in China

Sun, 4 May 2025 00:00:00 +0000

Isolating the “Tech” from EdTech: Experimental Evidence on Computer-Assisted Learning in China

Indicators of Entrepreneurial Activity: 2023

Sun, 4 May 2025 00:00:00 +0000

Indicators of Entrepreneurial Activity: 2023

Long-term impacts of early adversity on subjective well-being: Evidence from the Chinese great famine

Thu, 27 Feb 2025 00:00:00 +0000

Long-term impacts of early adversity on subjective well-being: Evidence from the Chinese great famine

Combined spectral and speech features for pig speech recognition

Fri, 31 Jan 2025 00:00:00 +0000

The sound of the pig is one of its important signs, which can reflect various states such as hunger, pain or emotional state, and directly indicates the growth and health status of the pig. Existing speech recognition methods usually start with spectral features. The use of spectrograms to achieve classification of different speech sounds, while working well, may not be the best approach for solving such tasks with single-dimensional feature input. Based on the above assumptions, in order to more accurately grasp the situation of pigs and take timely measures to ensure the health status of pigs, this paper proposes a pig sound classification method based on the dual role of signal spectrum and speech. Spectrograms can visualize information about the characteristics of the sound under different time periods. The audio data are introduced, and the spectrogram features of the model input as well as the audio time-domain features are complemented with each other and passed into a...

A novel method for credit scoring based on feature transformation and ensemble model

Fri, 31 Jan 2025 00:00:00 +0000

Credit scoring is a very critical task for banks and other financial institutions, and it has become an important evaluation metric to distinguish potential defaulting users. In this paper, we propose a credit score prediction method based on feature transformation and ensemble model, which is essentially a cascade approach. The feature transformation process consisting of boosting trees (BT) and auto-encoders (AE) is employed to replace manual feature engineering and to solve the data imbalance problem. For the classification process, this paper designs a heterogeneous ensemble model by weighting the factorization machine (FM) and deep neural networks (DNN), which can efficiently extract low-order intersections and high-order intersections. Comprehensive experiments were conducted on two standard datasets and the results demonstrate that the proposed approach outperforms existing credit scoring models in accuracy.

Portfolio choice analysis in a multi-country macro model

Thu, 30 Jan 2025 00:00:00 +0000

Portfolio choice analysis in a multi-country macro model

Fiscal policy design and inflation: The COVID-19 pandemic experience

Fri, 6 Dec 2024 00:00:00 +0000

Fiscal policy design and inflation: The COVID-19 pandemic experience

Inflationary Effects of Fiscal Support to Households and Firms

Thu, 15 Aug 2024 00:00:00 +0000

Fiscal support measures in response to the COVID-19 pandemic varied in their targeted beneficiaries. Relying on variability across 10 large economies, we study differences in the inflationary effects of fiscal support measures targeting consumers or businesses. Because conventional measures of real activity were distorted, we control for the underlying state of real economy using households sentiment data. We find that fiscal support measures to consumers, but not firms, had inflationary effects that manifested 5 weeks following the announcement and peaked at 12 weeks. The magnitude of the effect was larger in an environment of improving consumer sentiment.

Industrial Composition of Syndicated Loans and Banks’ Climate Commitments

Thu, 15 Aug 2024 00:00:00 +0000

In the past two decades, a number of banks joined global initiatives aimed to mitigate climate change by “greening” their asset portfolios. We study whether banks that made such commitments have a different emission exposure of their portfolios of syndicated loans than banks that did not. We rely on loan-level information with global coverage combined with country-industry information on emissions. We find that all banks have reduced their loan-emission exposures over the last 8 years. However, we do not find differences between banks that did and those that did not signal their sustainability goals, with the exception of early signers of Principles of Responsible Investments (PRI), who already had lower exposure to emissions through their syndicated lending. In addition, banks that signed PRI shortened the maturity of the loans extended to highly-emitting industries but only temporarily. Thus, we conclude that banks reduced their exposure to climate transition risks on average,...

What explains equity home bias? Theory and evidence at the sector level

Thu, 18 Jul 2024 00:00:00 +0000

What explains equity home bias? Theory and evidence at the sector level

Industrial specialization matters: A new angle on equity home Bias

Thu, 18 Jul 2024 00:00:00 +0000

Industrial specialization matters: A new angle on equity home Bias

Socioeconomic Disparities in Privatized Pollution Remediation: Evidence from Toxic Chemical Spills

Thu, 18 Jul 2024 00:00:00 +0000

Governments often privatize the administration of regulations to third-party specialists paid for by the regulated parties. We study how the resulting conflict of interest can have unintended consequences for the distributional impacts of regulation. In Massachusetts, the party responsible for hazardous waste contamination must hire a licensed contractor to quantify the environmental severity. We find that contractors’ evaluations favor their clients, exhibiting substantial score bunching just below thresholds that determine government oversight of the remediation. Client favoritism is more pronounced in socioeconomically disadvantaged neighborhoods and is associated with inferior remediation quality, highlighting a novel channel for inequities in pollution exposure. (JEL D63, J15, K32, L51, Q53, R23)

Automated Enforcement of Irrigation Regulations and Social Pressure for Water Conservation

Thu, 18 Jul 2024 00:00:00 +0000

Automated Enforcement of Irrigation Regulations and Social Pressure for Water Conservation

Efficient Retail Pricing in Electricity and Natural Gas Markets

Thu, 18 Jul 2024 00:00:00 +0000

A long line of research investigates whether the retail prices of electricity and natural gas send proper signals about scarcity in order to induce efficient consumption. Historically, regulated utilities have not designed tariffs that set marginal prices equal to marginal costs. Currently, some jurisdictions are opening the retail sectors to competition via “retail choice.” These new regimes replace imperfect regulation with imperfect competition as the process by which retail tariffs are formed. We discuss the challenges in evaluating the efficiency of tariffs and present evidence of how pricing has changed in markets with retail choice.

Mandatory Energy Efficiency Disclosure in Housing Markets

Thu, 18 Jul 2024 00:00:00 +0000

Mandatory disclosure policies are implemented broadly despite sparse evidence that they improve market outcomes. We study the effects of requiring home sellers to provide buyers with certified audits of residential energy efficiency. Using similar nearby homes as a comparison group, we find that this requirement increases price premiums for energy efficiency and encourages energy-saving investments. We additionally present evidence highlighting the market failure—incomplete information by both buyers and sellers—that prevents widespread voluntary disclosure of energy efficiency in housing transactions. Our findings support that disclosure policies can improve market outcomes in settings with symmetrically incomplete information. (JEL D83, K32, L98, Q41, Q48, R31)

Were small businesses more likely to permanently close in the pandemic?

Mon, 17 Jun 2024 00:00:00 +0000

Abstract Previous estimates indicate that COVID-19 led to a large drop in the number of operating businesses operating early in the pandemic, but surprisingly little is known on whether these shutdowns turned into permanent closures and whether small businesses were disproportionately hit. This paper provides the first analysis of permanent business closures using confidential administrative firm-level panel data covering the universe of businesses filing sales taxes from the California Department of Tax and Fee Administration. We find large increases in closure rates in the first two quarters of 2020, but a strong reversal of this trend in the third quarter of 2020. The increase in closures rates in the first two quarters of the pandemic was substantially larger for small businesses than large businesses, but the rebound in the third quarter was also larger. The disproportionate closing of small businesses led to a sharp concentration of market share among larger businesses as...

Climate Disasters and Exchange Rates: Are Beliefs Keeping up with Climate Change?

Thu, 29 Feb 2024 00:00:00 +0000

Climate Disasters and Exchange Rates: Are Beliefs Keeping up with Climate Change?

Financial Crises and the Composition of Cross-Border Lending

Sun, 29 Oct 2023 00:00:00 +0000

Financial Crises and the Composition of Cross-Border Lending

U.S. Monetary Policy and Fluctuations of International Bank Lending

Sun, 29 Oct 2023 00:00:00 +0000

U.S. Monetary Policy and Fluctuations of International Bank Lending

Do looks matter for an academic career in economics?

Sun, 29 Oct 2023 00:00:00 +0000

Do looks matter for an academic career in economics?

Aggregation level in stress testing models

Sun, 29 Oct 2023 00:00:00 +0000

Aggregation level in stress testing models

Shock Transmission through Cross-Border Bank Lending:

Sun, 29 Oct 2023 00:00:00 +0000

Shock Transmission through Cross-Border Bank Lending:

Monitoring Banking System Connectedness with Big Data

Sun, 29 Oct 2023 00:00:00 +0000

The need to monitor aggregate financial stability was made clear during the global financial crisis of 2008-2009, and, of course, the need to monitor individual financial firms from a microprudential standpoint remains. However, linkages between financial firms cannot be observed or measured easily. In this paper, we propose a procedure that generates measures of connectedness between individual firms and for the system as a whole based on information observed only at the firm level; i.e., no explicit linkages are observed. We show how bank outcome variables of interest can be decomposed, including with mixed-frequency models, for how network analysis to measure connectedness across firms. We construct two such measures: one based on a decomposition of bank stock returns, the other based on a decomposition of their quarterly return on assets. Network analysis of these decompositions produces measures that could be of use in financial stability monitoring as well as the analysis...

Bank Linkages and International Trade

Sun, 29 Oct 2023 00:00:00 +0000

Bank Linkages and International Trade

An Equity-minded Multi-dimensional Framework for Exploring the Dynamics of Sense of Belonging in an Introductory CS Course

Thu, 28 Sep 2023 00:00:00 +0000

An Equity-minded Multi-dimensional Framework for Exploring the Dynamics of Sense of Belonging in an Introductory CS Course

Characterization of Retinal Structure in ATF6-Associated Achromatopsia

Wed, 20 Sep 2023 00:00:00 +0000

Purpose: Mutations in six genes have been associated with achromatopsia (ACHM): CNGA3, CNGB3, PDE6H, PDE6C, GNAT2, and ATF6. ATF6 is the most recent gene to be identified, though thorough phenotyping of this genetic subtype is lacking. Here, we sought to test the hypothesis that ATF6-associated ACHM is a structurally distinct form of congenital ACHM. Methods: Seven genetically confirmed subjects from five nonconsanguineous families were recruited. Foveal hypoplasia and the integrity of the ellipsoid zone (EZ) band (a.k.a., IS/OS) were graded from optical coherence tomography (OCT) images. Images of the photoreceptor mosaic were acquired using confocal and nonconfocal split-detection adaptive optics scanning light ophthalmoscopy (AOSLO). Parafoveal cone and rod density values were calculated and compared to published normative data as well as data from two subjects harboring CNGA3 or CNGB3 mutations who were recruited for comparative purposes. Additionally, nonconfocal dark-field...

Effects of the Minimum Wage on Employment Dynamics