Federal Reserve Bank of Atlanta Working Papers http://www.frbatlanta.org/ The Federal Reserve Bank of Atlanta and the other eleven Reserve banks play an important part in all three of the Fed's functions--monetary policy, bank supervision and regulation, and the operation of a narionwide payments system Atlanta Fed Logo http://www.frbatlanta.org/images/icon_frblogo.jpg http://www.frbatlanta.org Making the Case for a Low Intertemporal Elasticity of Substitution http://www.frbatlanta.org/pubs/wp/12_01.cfm Mon, 23 Jan 2012 11:01:39 EST R. Anton Braun and Tomoyuki Nakajima. Working Paper 2012-1 (January. The responsiveness of consumption growth to changes in expected interest rates plays a central role in dynamic decision making. The authors provide some new evidence that this elasticity is small. Systematic and Liquidity Risk in Subprime-Mortgage Backed Securities http://www.frbatlanta.org/pubs/wp/11_15.cfm Tue, 29 Nov 2011 11:01:39 EST Mardi Dungey, Gerald P. Dwyer, and Thomas Flavin. Working Paper 2011-15. 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. Do Borrower Rights Improve Borrower Outcomes? Evidence from the Foreclosure Process http://www.frbatlanta.org/pubs/wp/11_16.cfm Tue, 29 Nov 2011 11:01:39 EST Kristopher Gerardi, Lauren Lambie-Hanson, and Paul S. Willen. Working Paper 2011-16. 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. Impact of the Business Environment on Output and Productivity in Africa http://www.frbatlanta.org/pubs/wp/11_14.cfm Wed, 23 Nov 2011 11:01:39 EST Working Paper 2011-14. El-hadj Bah and Lei Fang. 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. Making the Case for a Low Intertemporal Elasticity of Substitution http://www.frbatlanta.org/pubs/wp/11_13.cfm Tue, 22 Nov 2011 11:01:39 EST By R. Anton Braun and Tomoyuki Nakajima. Working Paper 2011-13 (November). The responsiveness of consumption growth to changes in expected interest rates plays a central role in dynamic decision making. The authors provide some new evidence that this elasticity is small. Reexamining the Empirical Relation between Loan Risk and Collateral: The Roles of Collateral Characteristics and Types http://www.frbatlanta.org/pubs/wp/11_12.cfm Mon, 12 Sep 2011 11:01:39 EST By 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 http://www.frbatlanta.org/pubs/wp/11_11.cfm Fri, 01 Jul 2011 11:01:39 EST 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 http://www.frbatlanta.org/pubs/wp/11_10.cfm Mon, 23 May 2011 11:01:39 EST Working Paper 2011-10. 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. Using data from Japan to assess these results, this paper finds that that they are not empirically relevant. Monetary and Exchange Rate Policy under Remittance Fluctuations http://www.frbatlanta.org/pubs/wp/11_07.cfm Wed, 30 Mar 2011 11:01:39 EST Working Paper 2011-7. 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. Chi-Squared Tests for Evaluation and Comparison of Asset Pricing Models http://www.frbatlanta.org/pubs/wp/11_08.cfm Wed, 30 Mar 2011 11:01:39 EST Working Paper 2011-8. 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. Accounting for the Cyclical Dynamics of Income Shares http://www.frbatlanta.org/pubs/wp/11_09.cfm Wed, 30 Mar 2011 11:01:39 EST Working Paper 2011-9. 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. Price Discrimination and Business-Cycle Risk http://www.frbatlanta.org/pubs/wp/11_03.cfm Thu, 24 Mar 2011 11:01:39 EST Working Paper 2011-3. 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. Uninsured Countercyclical Risk: An Aggregation Result and Application to Optimal Monetary Policy http://www.frbatlanta.org/pubs/wp/11_04.cfm Thu, 24 Mar 2011 11:01:39 EST Working Paper 2011-4. 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. Measuring the Welfare Gain from Personal Computers: A Macroeconomic Approach http://www.frbatlanta.org/pubs/wp/11_05.cfm Thu, 24 Mar 2011 11:01:39 EST Working Paper 2011-5. 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. Creating an EU-Level Supervisor for Cross-Border Banking Groups: Issues Raised by the U.S. Experience with Dual Banking http://www.frbatlanta.org/pubs/wp/11_06.cfm Thu, 24 Mar 2011 11:01:39 EST Working Paper 2011-6. 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. A Decomposition of the Black-White Differential in Birth Outcomes http://www.frbatlanta.org/pubs/wp/11_01.cfm Mon, 21 Mar 2011 11:01:39 EST Working Paper 2011-1. 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. To Work or Not to Work: The Economics of a Mother's Dilemma http://www.frbatlanta.org/pubs/wp/11_02.cfm Mon, 21 Mar 2011 11:01:39 EST Working Paper 2011-2. 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. How Amsterdam Got Fiat Money http://www.frbatlanta.org/pubs/wp/working_paper_2010-17.cfm Wed, 22 Dec 2010 11:01:39 EST Working Paper 2010-17. Stephen Quinn and William Roberds. The authors analyze a fiat money regime that was introduced by the Bank of Amsterdam in 1683. Reconstructing the bank's balance sheets, they describe how fiat money affected the bank's monetary and credit policies. Confronting Model Misspecification in Macroeconomics http://www.frbatlanta.org/pubs/wp/working_paper_2010-18.cfm Wed, 22 Dec 2010 11:01:39 EST Working Paper 2010-18. Daniel F. Waggoner and Tao Zha. The authors propose a framework for merging multiple models, incorporating uncertainty about both models and parameters. Their merged model alters the inferences about structural parameters and impulse responses. The Impact of Medical and Nursing Home Expenses and Social Insurance http://www.frbatlanta.org/pubs/wp/working_paper_2010-19.cfm Wed, 22 Dec 2010 11:01:39 EST Working Paper 2010-19. Karen A. Kopecky and Tatyana Koreshkova. The authors examine old-age health expenses, calibrating their model to the United States, and find that nursing home expenses play a significant role in the savings of the wealthy and on aggregate. Entry Cost, Financial Friction, and Cross-Country Differences in Income and TFP http://www.frbatlanta.org/pubs/wp/working_paper_2010-16.cfm Tue, 28 Sep 2010 11:01:39 EST Working Paper 2010-16. Lei Fang. Using a model calibrated to establishment-level statistics in the United States, the author finds that financial friction amplifies the effects of entry cost on cross-country differences in income and TFP. The Effect of Social Entitlement Programs on Private Transfers: New Evidence of Crowding Out http://www.frbatlanta.org/pubs/wp/working_paper_2010-15.cfm Thu, 02 Sep 2010 11:01:39 EST Working Paper 2010-15. Kristopher Gerardi and Yuping Tsai.Working Paper 2010-15. Studying the introduction of a Taiwanese social security program, the authors find that the probability of an adult child providing monetary transfers to his or her parents decreases substantially if the parents receive public assistance. Expected Returns to Stock Investments by Angel Investors in Groups http://www.frbatlanta.org/pubs/wp/working_paper_2010-14.cfm Thu, 26 Aug 2010 11:01:39 EST GroupsWorking Paper 2010-14. Ramon P. DeGennaro and Gerald P. Dwyer. Angel investors fund thousands of entrepreneurial projects annually. The authors' estimates indicate that the expected return for doing so is about 70 percent per year, compensating for the substantial risk. Fixed-Term and Permanent Employment Contracts: Theory and Evidence http://www.frbatlanta.org/pubs/wp/working_paper_2010-13.cfm Mon, 23 Aug 2010 11:01:39 EST Working Paper 2010-13. Shutao Cao, Enchuan Shao, and Pedro Silos. Working Paper 2010-13. The authors provide a theory of why firms offer both employment contracts with high job protection and contracts with no protection. Using that theory, they find that increasing firing costs can increase wage inequality. Decomposing the Education Wage Gap: Everything but the Kitchen Sink http://www.frbatlanta.org/pubs/wp/working_paper_2010-12.cfm Fri, 06 Aug 2010 11:01:39 EST Working Paper 2010-12. Julie L. Hotchkiss and Menbere Shiferaw. The wage gap between high school and college graduates began widening dramatically in the 1980s and 1990s. Using multiple data sources, the authors examine the source of this gap. Further Results on the Limiting Distribution of GMM Sample Moment Conditions http://www.frbatlanta.org/pubs/wp/working_paper_2010-11.cfm Tue, 20 Jul 2010 11:01:39 EST Working Paper 2010-8. Nikolay Gospodinov, Raymond Kan, and Cesare Robotti. Extending Hansen (1982), the authors provide new results on the limiting behavior of linear combinations of generalized method of moments (GMM) sample conditions and demonstrate the statistical properties of the proposed asymptotic approximation using simulation. Financial Literacy and Subprime Mortgage Delinquency: Evidence from a Survey Matched to Administrative Data http://www.frbatlanta.org/pubs/wp/working_paper_2010-10.cfm Mon, 26 Apr 2010 11:01:39 EST By Kristopher Gerardi, Lorenz Goette, and Stephan Meier, Working Paper 2010-10. The working paper investigates whether certain aspects of borrowers' financial literacy, namely numerical ability and economic knowledge, may have played a role in the subprime mortgage crisis. What Do Premiums Paid for Bank M and As Reflect? The Case of the European Union http://www.frbatlanta.org/pubs/wp/working_paper_2010-5.cfm Tue, 23 Mar 2010 11:01:39 EST Working Paper 2010-5 by Jens Hagendorff, Ignacio Hernando, Maria J. Nieto, and Larry D. Wall. Studying European bank mergers between 1997 and 2007, the authors find that stricter bank regulation and stronger deposit insurance schemes lower the takeover premiums acquiring banks pay. Tests of Ex Ante versus Ex Post Theories of Collateral Using Private and Public Information http://www.frbatlanta.org/pubs/wp/working_paper_2010-6.cfm Tue, 23 Mar 2010 11:01:39 EST Working Paper 2010-6 by Allen N. Berger, W. Scott Frame, and Vasso Ioannidou. The authors study the role of collateral in loan contracting using unique credit registry data that allow for the identification of effects attributable to different collateral theories. The Information Revolution and Small Business Lending: The Missing Evidence http://www.frbatlanta.org/pubs/wp/working_paper_2010-7.cfm Tue, 23 Mar 2010 11:01:39 EST Working Paper 2010-7 by Robert DeYoung, W. Scott Frame, Dennis Glennon, and Peter Nigro. The authors provide empirical confirmation for the widely accepted conjecture that information technology was the primary driver of small business borrower-lender distances in recent years.