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Atlanta Fed Working Papers

The Research Department of the Federal Reserve Bank of Atlanta publishes a working paper series to convey the research of staff economists and visiting scholars and stimulate professional discussion and exploration of economic and financial subjects.


Do Borrower Rights Improve Borrower Outcomes? Evidence from the Foreclosure Process
Kristopher Gerardi, Lauren Lambie-Hanson, and Paul S. Willen
Working Paper 2011-16a (Revised August 2012)
The authors examine the effects of giving additional rights to borrowers to see if foreclosures can be reduced or workouts accomplished. They find that these rights can extend the foreclosure timeline but generally do not lead to better borrower outcomes.

Systematic and Liquidity Risk in Subprime-Mortgage Backed Securities
Mardi Dungey, Gerald P. Dwyer, and Thomas Flavin
Working Paper 2011-15 (November)
Examining how risk in securitized financial products is evaluated, the authors explore factors affecting collateralized debt obligations based on subprime mortgages. They also examine effects of the financial turmoil in the recent financial crisis.

Impact of the Business Environment on Output and Productivity in Africa
El-hadj Bah and Lei Fang
Working Paper 2011-14 (November)
Assessing the business environment in 30 sub-Saharan African countries, the authors find that the poor business environment can account for 67 percent of the variation in income per worker in those countries relative to the United States.

Why Prices Don't Respond Sooner to a Prospective Sovereign Debt Crisis
R. Anton Braun and Tomoyuki Nakajima
Working Paper 2011-13 (November)
Why hasn't higher government indebtedness increased bond yields in Japan and the United States? We show that short-selling constraints and leverage delay the response of yields to an increased risk of a future sovereign debt crisis.

Reexamining the Empirical Relation between Loan Risk and Collateral: The Roles of Collateral Characteristics and Types
Allen N. Berger, W. Scott Frame, and Vasso Ioannidou
Working Paper 2011-12 (September)
The authors reexamine the empirical relation between loan risk and collateral. Their results suggest that conflicting results in the literature might be attributable to the use of samples with different economic characteristics or types of collateral.

Land-Price Dynamics and Macroeconomic Fluctuations
Zheng Liu, Pengfei Wang, and Tao Zha
Working Paper 2011-11 (July)
Examining the broad impact of land-price dynamics on the macroeconomy, the authors develop a mechanism that demonstrates how macroeconomic fluctuations are amplified and propagated through the joint dynamics of land prices and business investment.

New Keynesian Dynamics in a Low Interest Rate Environment
R. Anton Braun and Lena Mareen Körber
Working Paper 2011-10 (May)
Recent research has found that fiscal policy works differently when the nominal interest rate is zero. Increasing government purchases is more effective in stimulating economic activity while lowering labor taxes may actually reduce employment and output. This paper finds that that these results are not empirically relevant.

Accounting for the Cyclical Dynamics of Income Shares
Enchuan Shao and Pedro Silos
Working Paper 2011-9 (March)
Macroeconomics lacks models that mimic the dynamics of aggregate income shares observed in the data. Introducing costly entry of firms in a model of aggregate fluctuations with frictional labor markets can replicate many of the income shares' time series facts.

Chi-Squared Tests for Evaluation and Comparison of Asset Pricing Models
Nikolay Gospodinov, Raymond Kan, and Cesare Robotti
Working Paper 2011-8 (March)
The authors present a general statistical framework for the estimation, testing, and comparison of asset pricing models based on the Hansen-Jagannathan distance measure. The new asymptotic tests enjoy excellent finite-sample properties.

Monetary and Exchange Rate Policy under Remittance Fluctuations
Federico S. Mandelman
Working Paper 2011-7 (March)
Using data for the Philippines, the author analyzes the role of monetary and exchange rate policy in a small open economy subject to sizable trend and cyclical remittance fluctuations.

Creating an EU-Level Supervisor for Cross-Border Banking Groups: Issues Raised by the U.S. Experience with Dual Banking
Larry D. Wall, María J. Nieto, and David Mayes
Working Paper 2011-6 (March)
Some propose supplementing national supervision of banks in the European Union with an EU-level supervisor for cross-border groups. This proposal is examined by the authors through the prism of the experience in the United States with dual banking.

Measuring the Welfare Gain from Personal Computers: A Macroeconomic Approach
Karen A. Kopecky and Jeremy Greenwood
Working Paper 2011-5 (March)
The authors measure the welfare gain from the introduction of and price decline in personal computers, determining the gain to be in the range of 2 percent to 3 percent of consumption expenditure.

Uninsured Countercyclical Risk: An Aggregation Result and Application to Optimal Monetary Policy
R. Anton Braun and Tomoyuki Nakajima
Working Paper 2011-4 (March)
The authors consider an incomplete-markets economy with capital accumulation and endogenous labor supply and provide conditions under which stabilizing the price level is the optimal monetary policy.

Price Discrimination and Business-Cycle Risk
Marco Cornia, Kristopher S. Gerardi, and Adam Hale Shapiro
Working Paper 2011-3 (March)
Analyzing price discrimination in the airline industry, the authors examine seventeen years of data and find that price dispersion is procyclical. They suggest that the impact on firms' ability to price-discriminate results in additional profit risk.

To Work or Not to Work: The Economics of a Mother's Dilemma
Julie L. Hotchkiss, M. Melinda Pitts, and Mary Beth Walker
Working Paper 2011-2 (March)
In determining a woman's decision whether to reenter the labor force after the birth of a child, the authors find that both the direct and opportunity labor market costs of exiting the workforce figure prominently in the decision.

A Decomposition of the Black-White Differential in Birth Outcomes
M. Melinda Pitts, Mary Beth Walker, and Brian S. Armour
Working Paper 2011-1 (March)
The authors examine racial disparities in birth outcomes, finding that marriage rates, father's characteristics, and prenatal care contribute to racial differences in birth outcomes such as preterm birth and low birth weight.

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