Working Papers - Federal Reserve Bank of Atlanta - FRB Atlanta Several series of papers presenting the scholarly research of Atlanta Fed staff economists and visiting scholars. Community Affairs discussion papers address topical issues in community development. en-us Atlanta Fed Logo Stock-Bond Return Correlation, Bond Risk Premium Fundamentals, and Fiscal-Monetary Policy Regime 942601B8-EF57-4199-9E38-53172974154B Fri, 02 Oct 2020 08:41:00 EST Using a general equilibrium model with monetary and fiscal policies, the authors of this working paper show that two distinctive types of shocks technology and investment drive both positive and negative correlations between stock and bond returns under two policy regimes. The Fed Takes On Corporate Credit Risk: An Analysis of the Efficacy of the SMCCF 62672645-3976-4DFD-A09E-CBAE10374EE3 Tue, 15 Sep 2020 08:41:00 EST The authors of this working paper assess the efficacy of the Fed's Secondary Market Corporate Credit Facility (SMCCF), a program designed to stabilize the corporate bond market in the wake of the COVID-19 shock. Using a variety of identification strategies, they quantify the significant beneficial effects of the SMCCF on credit spreads and liquidity. The Impact of the COVID-19 Pandemic on Business Expectations 5ED970F9-5DEE-459B-9064-17578D7B0F87 Fri, 04 Sep 2020 10:34:00 EST Evaluating businesses' reactions to the COVID-19 crisis, the authors of this working paper find that firms view the pandemic largely as a demand shock rather than a supply shock. Further, they have responded to it by lowering their one-year-ahead inflation expectations, in stark contrast to household inflation expectations. Monetary Stimulus amid the Infrastructure Investment Spree: Evidence from China's Loan-Level Data FC7E4B85-5217-4942-981D-47AFA6A1E0CA Thu, 27 Aug 2020 07:30:00 EST The authors of this working paper study the impacts of the 2009 monetary stimulus and its interaction with infrastructure spending on credit allocation. They find that infrastructure investment, driven by fiscal policy, enhanced the monetary transmission to bank credit allocated to local government financing vehicles in infrastructure. Four Stylized Facts about COVID-19 4E9D2EE3-A028-4DD9-A09B-EC419F1D1D49 Wed, 26 Aug 2020 07:30:00 EST The authors of this working paper explore the impact of nonpharmaceutical interventions such as various lockdown policies on reducing the spread of COVID-19. Their findings raise doubt about the importance of such interventions in accounting for the evolution of COVID-19 transmission rates. Shadow Bank Runs 96175BC9-F584-4035-8A4D-DBB7B4013F41 Fri, 21 Aug 2020 07:30:00 EST Banking arrangements that embody a depositor redemption protocol of first-come, first-served are viewed as being run-prone. During the recent financial crisis, wholesale and shadow banks experienced runs even though sequential service was absent. The authors of this working paper show that banks can be run-prone in the absence of sequential service if their operations are subject to fixed costs. Unemployment Insurance during a Pandemic 5D6C0E66-96D3-4E57-A4C3-E0FC41780FF6 Fri, 31 Jul 2020 07:40:00 EST The authors of this working paper analyze the effects of CARES Act unemployment insurance (UI) on the unemployment rate and the number of deaths from COVID-19. One important policy experiment is that the research explores the effect of extending the additional $600 weekly UI payment on unemployment and the number of infections. Doubts about the Model and Optimal Policy 0239B04D-4CFC-450E-BB2B-085B7D43498E Fri, 31 Jul 2020 07:30:00 EST The author of this working paper analyzes optimal policy design in environments where multiple agents exhibit fears of model misspecification. The Dynamics of the Smoking Wage Penalty 016809F0-D902-4AA3-939E-0E6205C0905F Tue, 28 Jul 2020 07:30:00 EST The authors of this working paper examine the wage gap between cigarette smokers and nonsmokers. Accounting for decisions about smoking, working, education, and occupation, they find that continued heavy smoking in young adulthood results in a wage penalty of 14.8 percent for women and 9.3 percent for men, and the source of the gap differs for men and women. Decomposing Outcome Differences between HBCU and Non-HBCU Institutions 51B3B74D-3402-4F62-B0C5-DB82F7965880 Thu, 16 Jul 2020 07:30:00 EST The authors of this working paper assess contributors to observed differences between historically Black colleges and universities (HBCU) and non-HBCU student outcomes. The goal is to identify ways in which HBCUs may improve their relative metrics of student success, such as helping STEM graduates translate their training into higher earnings.