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.

2017

An Early Experiment with "Permazero"

Stephen Quinn and William Roberds
Working Paper 2017-5 (May)
The authors examine a monetary regime of the Bank of Amsterdam in the eighteenth century that held policy interest rates near zero for more than a century. They find that the Bank's inability to stabilize large shocks brought adverse results.

Fracking and Mortgage Default

Chris Cunningham, Kristopher Gerardi, and Yannan Shen
Working Paper 2017-4 (March)
Examining the effects of hydraulic fracturing, or "fracking," on mortgage default, the authors consider homes along the Marcellus Formation in Pennsylvania. Using the underlying geology to predict drilling activity, and looking only at mortgages originated before the fracking boom, they find that fracking appears to lower the likelihood of default, most likely by increasing employment.

Agency Conflicts in Residential Mortgage Securitization: What Does the Empirical Literature Tell Us?

W. Scott Frame
Working Paper 2017-1 (March)
Conflicts of interest in securitization are believed to have contributed to the recent housing crisis. The author reviews existing empirical research and finds little support for this conclusion, except in the case of low-documentation mortgages.

Foreign Investment, Regulatory Arbitrage, and the Risk of U.S. Banking Organizations

W. Scott Frame
Working Paper 2017-2 (March)
Investigating how cross-country differences in banking regulation and supervision affect international banking flows, the authors find that U.S. bank holding companies are more likely to operate subsidiaries in countries with weaker regulation and supervision.

Old, Frail, and Uninsured: Accounting for Puzzles in the U.S. Long-Term Care Insurance Market

R. Anton Braun, Karen A. Kopecky, and Tatyana Koreshkova
Working Paper 2017-3 (March)
Half of elderly individuals will experience a nursing home stay, and the risk of out-of-pocket expenses that exceed $200,000 is significant. Yet only 10 percent of them have private long-term care insurance, and many applications are rejected. We attribute these observations to adverse selection, insurers' overhead costs, and Medicaid.

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