[{"abstract":"Standard New Keynesian models treat aggregate total factor productivity as exogenous to monetary policy. This paper studies optimal monetary policy in the four-equation New Keynesian model of Baqaee, Farhi, and Sangani (2024), in which monetary expansions reallocate resources toward high-markup firms, reduce misallocation, and raise aggregate productivity. This endogenous productivity response flattens the Phillips curve and changes the optimal target criterion of a dual-mandate central bank. The resulting criterion is both forward- and backwardlooking. In my calibration, this criterion is closely approximated by a familiar New Keynesian target criterion adjusted only for the flatter Phillips curve. By contrast, applying a standard target criterion that ignores the effect of monetary policy on aggregate productivity leads the dual-mandate central bank to stabilize inflation too aggressively and generates excessive output fluctuations.","also_at":[],"analysis":null,"authors":["Hannikainen","Lauri"],"date":"2026-11-03","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"fbbc0ce55f54e9e8","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":8,"screen_reason":"Analyzes optimal policy when monetary actions affect aggregate productivity, relevant for central-bank strategy.","screening_tag":"DM","selected_in":[],"source":"bof","source_name":"Bank of Finland Research Discussion Papers","tag":"DM","tag_inferred":true,"title":"Monetary policy with endogenous aggregate productivity and misallocation","url":"https://ideas.repec.org/p/zbw/bofrdp/343109.html"},{"abstract":"We demonstrate that foreign institutional ownership (FIO) is associated with stronger stock return sensitivity to the Global Financial Cycle (GFC), indicating greater global co-movement among stocks selected by FIOs compared to those not selected. We conjecture that this may be because (i) FIOs tend to pick ex-ante very similar firms when investing abroad, or (ii) FIO investments itself makes firms ex-post more similar and more sensitive to the GFC. We find evidence in support of both hypotheses: that the increased co-movement may be due to FIO's selecting more homogeneous firms and that the sensitivity to the GFC increases after FIO investment. However, we find no significant difference between firms that have longer exposure to FIO investors and those that have only recently obtained FIO investment. Our results indicate that diversification gains are left on the table when FIOs select firms to invest in.","also_at":[],"analysis":null,"authors":["Ambrocio, Gene","Bui, Dien Giau","Hasan, Iftekhar","Lin, Chih-Yung"],"date":"2026-11-03","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"dab101ddd771d41e","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Shows how foreign institutional ownership amplifies stock co-movement with the global financial cycle.","screening_tag":"Transversal","selected_in":[],"source":"bof","source_name":"Bank of Finland Research Discussion Papers","tag":"Transversal","tag_inferred":false,"title":"Pyrrhic diversification: Foreign institutional ownership and stock return sensitivity to the global financial cycle","url":"https://ideas.repec.org/p/zbw/bofrdp/335890.html"},{"abstract":"We extend an estimated euro-area Smets-Wouters (2007) model with endogenous price-adjustment hazards and a credibility-weighted expectations channel and study the interaction between state-dependent pricing (SDP) and inflation-expectation de-anchoring as complementary sources of second-round inflation dynamics. We establish four results. First, the two channels are super-additive: the long-run price-level cost of a large cost-push shock exceeds the sum of individual effects when both channels are active. Second, de-anchoring is material only when routed through the forward expectation term, not through backward indexation. Third, a formal Kalman-filter state-space estimation using ECB Survey of Professional Forecasters (SPF) and Consumer Expectations Survey (CES) data finds that professional forecasters remained fully anchored while households de-anchored significantly once inflation crossed approximately 5% during 2021-2024 inflation surge, consistently with rational inattention. Fourth, looking through a large cost-push shock is costly because the supply-side and expectations-side risks compound.","also_at":[],"analysis":null,"authors":["Kilponen, Juha","Kortelainen, Mika"],"date":"2026-11-03","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"d44296e0babacd8a","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":8,"screen_reason":"Euro-area inflation dynamics and de-anchoring directly inform ECB policy and bond markets.","screening_tag":"DM","selected_in":[],"source":"bof","source_name":"Bank of Finland Research Discussion Papers","tag":"DM","tag_inferred":false,"title":"State-dependent pricing, de-anchored expectations, and the cost of looking through inflation shocks","url":"https://ideas.repec.org/p/zbw/bofrdp/344113.html"},{"abstract":"The Global Financial Crisis of 2007-2009 moved research on household debt and its aggregate implications to the forefront of macroeconomics. In this review, we offer a synthesis of this large body of both empirical and theoretical research, and an overview of the most important themes for future research. Empirical studies robustly find that rapid aggregate household debt growth is associated with an increased incidence of financial crises and slower future economic growth. There is a broad consensus in the literature, both empirical and theoretical, that this statistical association is mostly driven by changes in credit supply and lending standards. This is also the dominant view of the drivers of the Global Financial Crisis, in particular in the U.S. However, the narrative emerging from the literature, heavily concentrated on the U.S. experience, is not easy to generalize. The mechanisms that define how credit expansions ultimately lead to responses in aggregate economic activity depend both on cross-sectional heterogeneity in household balance sheets and on local credit market institutions. These factors shape the credit constraints that households face, creating externalities that can ultimately cause large output losses and slow recoveries when the economy is faced with unexpected shocks. Overall, there remains many open questions in quantifying the relative importance of credit demand and supply factors in explaining observed household credit booms and busts, as well as in understanding the theoretical underpinnings of such cycles.","also_at":[],"analysis":null,"authors":["Nyholm, Juho","Silvo, Aino"],"date":"2026-11-03","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"a510090dfdb41f0b","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":5,"screen_reason":"Reviews household-debt literature, summarizing links to crises and growth but offers limited new market guidance.","screening_tag":"DM","selected_in":[],"source":"bof","source_name":"Bank of Finland Research Discussion Papers","tag":"DM","tag_inferred":false,"title":"Household debt, the real economy, and financial stability: A literature review","url":"https://ideas.repec.org/p/zbw/bofrdp/342400.html"},{"abstract":"Inflation dynamics reflect forces operating at different cycles, from short-lived shocks to longterm structural trends. We introduce the sum-of-the-cycles (SOC) method, which exploits this multifrequency structure of inflation for forecasting. SOC decomposes inflation into cyclical components, applies forecasting models suited to their persistence, and recombines them into an aggregate forecast. Across U.S. inflation measures and horizons, SOC consistently outperforms leading time-series benchmarks, reducing forecast errors by about 25 percent at short horizons and nearly 50 percent at long horizons. During the 2020-21 inflation surge, when many models - including advanced machine-learning methods - struggled, SOC retained strong performance by incorporating shortage indicators. Beyond accuracy, SOC enhances interpretability: financial variables dominate high- and business-cycle frequencies, Phillips Curve models are most informative at medium frequencies, and factor-based methods, forecast combinations, and shortage indices prevail at low frequencies. This combination of accuracy and transparency makes SOC a practical complement to existing tools for inflation forecasting and policy analysis.","also_at":[],"analysis":null,"authors":["Verona","Fabio"],"date":"2026-11-03","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"9b7779b46163fba4","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":8,"screen_reason":"Introduces a superior inflation-forecasting method with clear implications for market expectations and policy.","screening_tag":"DM","selected_in":[],"source":"bof","source_name":"Bank of Finland Research Discussion Papers","tag":"DM","tag_inferred":false,"title":"Forecasting inflation: The sum of the cycles outperforms the whole","url":"https://ideas.repec.org/p/zbw/bofrdp/335013.html"},{"abstract":"The paper studies how climate policy affects the brown risk premium in bank lending, distinguishing between Scope 1 (direct) and Scope 2 (energy-related) emissions using loanlevel data on new variable-rate corporate loans from 2019-2024 matched with constructed measures of Scope 1 and Scope 2 emission intensity. Exploiting the Finnish Climate Act of 2022, which set a binding 2035 net-zero target, we show that Scope 1 emissions are priced throughout the sample, indicating pre-existing risk pricing, while Scope 2 emissions are priced mainly after the policy, suggesting an expansion of priced transition risks. We further isolate periods of acute energy market stress and find that banks temporarily deprioritize carbon risk during energy crisis months. Estimated carbon premia are economically meaningful, but we do not find strong evidence that pricing differs systematically between large and small firms.","also_at":[],"analysis":null,"authors":["Tolkki, Ville","Junttila, Juha","Sahlström, Petri"],"date":"2026-11-03","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"831e60cd6e4adce3","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Studies climate-policy-driven risk premia in Finnish bank loans, informing ESG pricing and credit markets.","screening_tag":"DM","selected_in":[],"source":"bof","source_name":"Bank of Finland Research Discussion Papers","tag":"DM","tag_inferred":false,"title":"Climate policy and brown risk premium on bank loans: Direct vs. indirect emissions","url":"https://ideas.repec.org/p/zbw/bofrdp/342401.html"},{"abstract":"We investigate the existence of calendar effects in the interest rate pass-through in the euro area by examining how changes in the money market rate are transmitted to bank lending rates within quarters. Using monthly data on the interest rates of new loans for a large sample of euro area banks from January 2010 to April 2024, we find that this short-term pass-through to non-financial corporation and consumption lending rates is weaker in the fourth quarter of the year during periods of policy tightening. We obtain limited evidence that the pass-through is stronger in the fourth quarter for housing and consumption loans during periods of policy easing. We interpret these findings as consistent with trade loading behavior, whereby banks inflate their loan volumes at the end of the year to meet annual targets. Our work highlights the importance of considering seasonal effects when assessing interest rate pass-through in the euro area.","also_at":[],"analysis":null,"authors":["Fungáčová, Zuzana","Kerola, Eeva","Weill, Laurent"],"date":"2026-11-03","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"66a23247fec76aa9","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Identifies seasonal effects in euro-area interest-rate pass-through, affecting policy impact assessments.","screening_tag":"DM","selected_in":[],"source":"bof","source_name":"Bank of Finland Research Discussion Papers","tag":"DM","tag_inferred":false,"title":"Timing matters: Seasonal anomalies in interest rate pass-through","url":"https://ideas.repec.org/p/zbw/bofrdp/344221.html"},{"abstract":"Government spending effectiveness depends critically on how it is financed. Using state dependent SVAR models and local projections on post-war US data, we show that fiscal expansions financed with short-term debt generate significantly larger output multipliers than those financed with long-term debt. This difference mainly stems from private consumption responses: short-term financing crowds in consumption while long-term financing does not. Torationalize this finding, we construct an incomplete markets model in which households invest in short-term and long-term assets. Short assets provide liquidity/safety services; households can (more readily) use them to cover sudden idiosyncratic spending needs. An increase in the supply of these assets, through a short-term debt-financed government expenditure shock, boosts private consumption. We first show this mechanism analytically in a simplified model, and then quantify it in a carefully calibrated New Keynesian model. We find that fiscal multipliers differ substantially across financing modes, with short-term-financed shocks typically exceeding unity while long-term-financed shocks typically fall below unity. We show these differences persist across monetary and fiscal policy regimes, with important implications for optimal debt management and stimulus design.","also_at":[],"analysis":null,"authors":[],"date":"2026-11-03","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"5f498e14ad04b0be","issue_date":null,"kind":"working_paper","publication_month":"2026-11","relevance":8,"screen_reason":"Shows how debt maturity alters fiscal multipliers, relevant for US fiscal policy and markets.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Debt maturity and government spending multipliers","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3306~028a82bc67.en.pdf"},{"abstract":"We design a novel survey to study how education shapes households' joint beliefs about inflation, unemployment, and monetary policy transmission. College-educated respondents perceive the inflation-unemployment trade-off and hold views similar to professional forecasters, while less educated respondents favor supply-side narratives. When exposed to hypothetical monetary policy interventions, the more educated update expectations and adjust consumption and saving in line with standard models, whereas the less educated display greater rigidity. This education gradient persists after controlling for information sources, financial literacy, and institutional trust, pointing to differences in abstract reasoning. Open-ended responses are consistent with college-educated households holding mental models aligned with standard macroeconomic theory.","also_at":[],"analysis":null,"authors":["Piccolo, Jessica","Russo, Alessia","Granziera, Eleonora","Castelnuovo, Efrem"],"date":"2026-11-03","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"4d893e2d898a98d1","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":4,"screen_reason":"Examines education-driven belief differences, with limited immediate market or policy implications.","screening_tag":"DM","selected_in":[],"source":"bof","source_name":"Bank of Finland Research Discussion Papers","tag":"DM","tag_inferred":true,"title":"Households' macroeconomic beliefs: The role of education","url":"https://ideas.repec.org/p/zbw/bofrdp/343547.html"},{"abstract":"The functioning of sovereign bond markets is closely intertwined with repo markets, where investors finance long positions and source bonds for short sales. We show, theoretically and empirically, how conditions in the cash bond market fundamentally shape repo rates: When demand for cash bonds exceeds available supply, arbitrageurs, notably hedge funds, step in to bridge the gap by shorting bonds and borrowing them in the repo market. These arbitrage strategies drive a wedge between monetary policy rates and repo rates, generating “specialness”. To investigate the drivers of investors’ demand for repo contracts, we obtain regulatory data covering the entire universe of repos backed by German sovereign bonds. We identify the ultimate borrowers and lenders of securities and estimate their demand and supply elasticities for the repo market. Supply, dominated by the public sector, accounts for 87% of the aggregate elasticity. Demand, driven mainly by hedge funds, is strongly inelastic: a 10% increase in borrowing costs reduces their borrowing by only 1%. Despite being among the most price-elastic investors in cash bond markets, hedge funds are inelastic in repo markets because their bond borrowing bridges the preferred-habitat demand in the cash bond market: their elasticity is inherited from their cash-market counterparties rather than being a primitive. As a result, repo rate specialness emerges as the equilibrium price reflecting demand pressures in the cash bond market, of which collateral scarcity from central bank purchases is a special case. Consequently, the same cash bond market imbalances affect both the pricing of safe assets and repos, two markets that are of crucial importance for the transmission of monetary policy.","also_at":[],"analysis":null,"authors":[],"date":"2026-11-03","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"427e2cae87375f20","issue_date":null,"kind":"working_paper","publication_month":"2026-11","relevance":8,"screen_reason":"Analyzes hedge-fund behavior in treasury and repo markets, directly affecting bond yields and policy transmission.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Elastic in cash, inelastic in repo: hedge funds in the treasury and repo markets","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3305~877e68c2b7.en.pdf"},{"abstract":"We develop a novel sentiment measure from survey forecasts that captures the component of beliefs arising from the systematic misaggregation of public information relative to a machine benchmark based on the same information set. We extend this sentiment measure historically for a panel of 78 countries using machine learning models trained on BERT embeddings of historical news articles (1903-2020). The backcasted sentiment shows that shocks in median sentiment predict credit booms in the non-tradable corporate sector, which prior research has linked to financial crises. We further find that this sentiment component is shaped by memory-related dynamics, as the time elapsed since major crises and the share of young-to-old people in the population predict surges in optimism even when recent economic developments are controlled for. Taken together, the findings provide new historical evidence consistent with the Minsky-Kindleberger view on financial crises.","also_at":[],"analysis":null,"authors":["Ristolainen","Kim"],"date":"2026-11-03","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"37f85dd680dba03d","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Provides a sentiment-based indicator predicting credit booms across many countries, relevant to financial-stability outlooks.","screening_tag":"Transversal","selected_in":[],"source":"bof","source_name":"Bank of Finland Research Discussion Papers","tag":"Transversal","tag_inferred":false,"title":"Quantifying Minsky cycles","url":"https://ideas.repec.org/p/zbw/bofrdp/340165.html"},{"abstract":"In both the U.S. and the euro area, the share of market finance in aggregate corporate credit has grown over time. To study the implications of the corporate debt structure for the transmission of monetary policy, we develop a New Keynesian DSGE model in which firms differ in productivity and may finance themselves with either bonds or loans. Our setup makes the aggregate corporate debt composition and firms' credit access endogenous and dependent on aggregate economic conditions. The model rationalizes the empirically documented substitution from bank loans to bond finance following a monetary policy contraction. Credit is squeezed for those bank-dependent firms that cannot access the bond market. A structural shift in the aggregate bond-to-loan ratio among credit-eligible firms affects financial market dynamics, but does not materially change the overall impact of monetary policy shocks on the macroeconomy. Instead, in an economy with greater credit access, aggregate demand is less responsive to monetary policy shocks.","also_at":[],"analysis":null,"authors":["Gulan, Adam","Silvo, Aino"],"date":"2026-11-03","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"099dea735e0a5147","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":8,"screen_reason":"Analyzes corporate debt composition and its effect on monetary policy transmission in the US and euro area.","screening_tag":"DM","selected_in":[],"source":"bof","source_name":"Bank of Finland Research Discussion Papers","tag":"DM","tag_inferred":false,"title":"Corporate debt composition, access to credit, and monetary policy","url":"https://ideas.repec.org/p/zbw/bofrdp/342406.html"},{"abstract":"We document the current specification of Aino 2, the dynamic stochastic general equilibrium (DSGE) model used at the Bank of Finland for forecasting and policy analysis, originally introduced under the name Aino 2.0 in Kilponen et al. (2016). It is a large-scale estimated New Keynesian small open economy model with an explicit banking sector, designed to capture key features of the Finnish macroeconomy. Since its introduction, the model has been updated to include various features with a view of improving its performance in practical policy work. The most important modifications include the adoption of general constant relative risk aversion preferences, a revised wage-indexation mechanism that generates more realistic wage dynamics in forecasting applications, and fixed production costs that improve the model's ability to match labour market and productivity fluctuations. A companion Technical Appendix provides the derivation of full equilibrium conditions, analytical steady state solution, and log-linearised dynamic equilibrium conditions.","also_at":[],"analysis":null,"authors":["Juvonen, Petteri","Silvo, Aino"],"date":"2026-11-03","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"065058874c6dca72","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Updates a Finnish DSGE model used for policy forecasting, offering insights for advanced-economy monetary analysis.","screening_tag":"DM","selected_in":[],"source":"bof","source_name":"Bank of Finland Research Discussion Papers","tag":"DM","tag_inferred":false,"title":"Aino 2: An updated DSGE model of the Finnish economy","url":"https://ideas.repec.org/p/zbw/bofrdp/344111.html"},{"abstract":"Service fees continue to proliferate in a wide range of markets, from retail to payments, generating questions about their impact on consumer choice, competition, and fairness. This paper explores how sensitivity to such fees varies across consumers, use cases, and competitive settings, and whether it is affected by consumer learning. I am able to conduct this in-depth empirical analysis thanks to a uniquely detailed, high-frequency panel data set on surcharged ATM cash withdrawals. Results show that average elasticity estimates mask substantial heterogeneity in consumer sensitivity to service fees. I explore ways in which market and behavioral mechanisms can help explain this heterogeneity. Finally, I investigate whether consumers strategically adjust their behavior in response to service fees.","also_at":[],"analysis":null,"authors":["Krzysztof Wozniak"],"date":"2026-11-02","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"c1e99a729f4ceebd","issue_date":null,"kind":"working_paper","publication_month":"2026-11","relevance":6,"screen_reason":"Shows heterogeneous consumer fee sensitivity, informing payment-service pricing and competition.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":true,"title":"Heterogeneity in Service Fee Sensitivity: Evidence from ATM Surcharges","url":"https://www.federalreserve.gov/econres/feds/heterogeneity-in-service-fee-sensitivity-evidence-from-atm-surcharges.htm"},{"abstract":"This paper studies the European Central Bank’s (ECB) perception of non-bank financial intermediaries (NBFIs) and how this perception is publicly communicated. We construct a perception index based on ECB speeches over the period 1998–2025. Sentiment in references to non-banks is classified by a large language model that we fine-tune on our own hand-labeled dataset constructed for this purpose. The resulting index reveals a predominantly negative and declining perception over time, particularly since the Global Financial Crisis. Negative sentiment is primarily associated with concerns related to financial stability and regulatory needs, whereas positive sentiment reflects the role of non-banks in fostering financial innovation and supporting market functioning. The index is made publicly available for future research.","also_at":[],"analysis":null,"authors":[],"date":"2026-11-02","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"bddba34be83c33df","issue_date":null,"kind":"working_paper","publication_month":"2026-11","relevance":7,"screen_reason":"ECB sentiment on non-banks links to financial stability and market functioning in the euro area.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"ECB perception of non-banks: a machine learning-based approach","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3304~9082a5f181.en.pdf"},{"abstract":"This paper studies how collective bargaining affects both wages and amenities. By merging collective bargaining agreements (CBAs) to linked employer-employee data in Brazil, I combine rich contracted amenities with wage information. I implement a difference-in-difference strategy that exploits a court ruling enforcing CBA continuation (i.e., ultractivity) to estimate the effects of union bargaining power. Strengthening unions raises wages and amenities without reducing employment—increasing retention despite some labor-labor substitution. A revealed preference approach shows that amenities account for 45% of total compensation gains. These findings suggest that collective bargaining can offset monopsony power, but employers retain the right-to-manage workforce composition. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.","also_at":[],"analysis":null,"authors":["Lorenzo Lagos"],"date":"2026-11-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20240766","doi_registered":"2026-10-30","flags":[],"group":"journal","id":"fc9249d44e2146e9","issue_date":"2026-11-01","kind":"journal","publication_month":"2026-11","relevance":6,"screen_reason":"Union power effects on wages and amenities in Brazil inform labor market dynamics in an emerging economy.","screening_tag":"EM","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"EM","tag_inferred":false,"title":"Union Bargaining Power and the Amenity-Wage Trade-Off","url":"https://doi.org/10.1257/aer.20240766"},{"abstract":"The recent inflation surge brought inflation back on people's minds. I quantify when and how much attention to inflation changes and derive the macroeconomic implications of these attention changes. I estimate an attention threshold at an inflation rate of 4 percent, that attention doubles when inflation exceeds this threshold, and that supply shocks have stronger and more persistent effects on inflation in times of high attention. Developing a model featuring the attention threshold, I show that attention changes offer a joint explanation for inflation surges, inflation's co-movement with inflation expectations, and a long last mile of disinflation. (JEL D84, E12, E31, E43, E52)","also_at":[],"analysis":{"correction":{"checked":"2026-11-01","human_reviewed":false,"made_by":"Claude (AI assistant)","original_tag":"Transversal","source":"Oliver Pfäuti, \"The Inflation Attention Threshold and Inflation Surges\", arXiv:2308.09480 working-paper version, section 2.2 (Data). The published AER version was not read."},"current_prompt":false,"evidence":"As my baseline measure of inflation expectations, I rely on the Survey of Consumers from the University of Michigan.","flags":[],"in_issue":false,"rationale":"The abstract names no economy, but the paper's data are all from the United States (University of Michigan and New York Fed household surveys, CPI inflation from FRED).","relevance_note":"Understanding how heightened public focus on inflation can reinforce price pressures informs policymakers about the potential feedback loops that may complicate disinflation efforts.","summary":"The paper measures how public attention to inflation rises sharply once inflation exceeds 4 percent and shows that higher attention amplifies and prolongs the impact of supply shocks on inflation. Using a model with this attention threshold, it explains recent inflation spikes, the link between inflation and expectations, and the slow pace of disinflation.","takeaways":["Attention to inflation doubles when inflation passes a 4 percent threshold","Supply-shock effects on inflation become stronger and more persistent under high attention","The attention threshold helps jointly explain inflation surges and their co-movement with expectations","Disinflation remains slow because attention stays elevated after a surge"],"wording_correction":null},"authors":["Oliver Pfäuti"],"date":"2026-11-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20250051","doi_registered":"2026-10-30","flags":[],"group":"journal","id":"d0da4007e03158b4","issue_date":"2026-11-01","kind":"journal","publication_month":"2026-11","relevance":9,"screen_reason":"Identifies inflation-attention threshold, directly informing inflation dynamics and central-bank policy.","screening_tag":"Transversal","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"DM","tag_inferred":false,"title":"The Inflation Attention Threshold and Inflation Surges","url":"https://doi.org/10.1257/aer.20250051"},{"abstract":"This study examines which features drive consumer adoption of new digital payment methods in the Netherlands. We conducted a Discrete Choice Experiment in the LISS panel in November 2025 among 2,084 respondents and analyse preferences for six features: the origin of the payment service provider, the functionality, app requirements, privacy, delayed payments, and automatic payment functionalities. The results show that the origin of the provider is the strongest determinant of adoption. Relative to payment methods offered by a Dutch provider, otherwise identical methods offered by European, American or Asian providers are significantly less preferred. Convenience also matters. Respondents prefer payment methods that are integrated into an existing banking app, can be used both online and in stores, and support recurring automatic payments. By contrast, additional features such as offline use and conditional payments add limited utility. A latent class model reveals substantial heterogeneity, distinguishing a small group of reluctant non-adopters from several adopter segments that differ in their sensitivity to the attributes. The findings imply that a broad adoption of new digital payment methods is most likely when trusted governance is combined with convenient, well-integrated functionality. Policymakers, banks and other PSPs should communicate clearly why new payment methods are being developed and how their features benefit consumers in everyday use.","also_at":[],"analysis":null,"authors":["Marie-Claire Broekhoff","Ron Berndsen"],"date":"2026-11-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"c45da6466abe5bf7","issue_date":null,"kind":"working_paper","publication_month":"2026-11","relevance":5,"screen_reason":"Identifies key attributes driving digital payment adoption in the Netherlands, relevant to fintech market strategy.","screening_tag":"DM","selected_in":[],"source":"dnb","source_name":"De Nederlandsche Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Features that drive adoption of new payment methods: Evidence from a Discrete Choice Experiment","url":"https://ideas.repec.org/p/dnb/dnbwpp/876.html"},{"abstract":"How do majority groups respond to narrowing inequality in racially polarized environments? We study this by examining the Freedmen's Bureau, an agency created after the US Civil War to aid former slaves and launch institutional reform in the South. Using new historical records and an event-study approach, we estimate the bureau's impact on political, social, and economic outcomes. Vote shares for Democrats, the party that previously championed slavery and opposed Black civil rights, initially eroded in bureau counties, but these impacts faded as federal oversight weakened. Racial backlash emerged rapidly and persisted, suggesting White majorities sought to offset Black progress. (JEL D63, D72, J15, N31, N41)","also_at":[],"analysis":null,"authors":["Eric Chyn","Kareem Haggag","Bryan A. Stuart"],"date":"2026-11-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20241561","doi_registered":"2026-10-30","flags":[],"group":"journal","id":"b2c2ccf8497379d5","issue_date":"2026-11-01","kind":"journal","publication_month":"2026-11","relevance":1,"screen_reason":"Historical study of racial backlash, little relevance to current macro or market issues.","screening_tag":"DM","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"DM","tag_inferred":false,"title":"Inequality and Racial Backlash: Evidence from the Reconstruction Era and the Freedmen's Bureau","url":"https://doi.org/10.1257/aer.20241561"},{"abstract":"This paper considers how far private adaptation may reduce future vulnerability to climate risks. Using data on monthly firm-to-firm transactions from Pakistan, we find that flood-affected firms are more likely to relocate to safer ground and shift purchases toward suppliers in less flood-prone regions and reached via less flood-prone roads. The results indicate that firms are imperfectly informed about flood risk and update their beliefs following floods. We quantify aggregate impacts using a spatial model of endogenous production network formation. The findings suggest that firms' learning will shape the economic impact of increasingly frequent climate-related disasters. (JEL D22, L14, O13, O14, Q54, R32)","also_at":[],"analysis":null,"authors":["Clare Balboni","Johannes Boehm","Mazhar Waseem"],"date":"2026-11-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20241027","doi_registered":"2026-10-30","flags":[],"group":"journal","id":"95431411745536c6","issue_date":"2026-11-01","kind":"journal","publication_month":"2026-11","relevance":5,"screen_reason":"Analyzes firm adaptation to floods in Pakistan, relevant for climate risk and supply-chain impacts.","screening_tag":"EM","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"EM","tag_inferred":false,"title":"Firm Adaptation in Production Networks: Evidence from Extreme Weather Events in Pakistan","url":"https://doi.org/10.1257/aer.20241027"},{"abstract":"Based on a narrative classification of all significant postwar changes in R&D appropriations for five major federal agencies, we find that an increase in nondefense R&D appropriations leads to increases in various measures of innovative activity and higher business-sector productivity in the long run. We structurally estimate the production function elasticity of nondefense government R&D capital using the SP-IV methodology of Lewis and Mertens (2024) and obtain implied returns of 140 to 210 percent over the postwar period. The estimates indicate that government-funded R&D accounts for one-fifth of business-sector TFP growth since WWII and imply substantial underfunding of nondefense R&D. (JEL D24, E23, H50, O31, O33, O38)","also_at":[],"analysis":null,"authors":["Andrew J. Fieldhouse","Karel Mertens"],"date":"2026-11-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20231684","doi_registered":"2026-10-30","flags":[],"group":"journal","id":"75492aec4b701d4b","issue_date":"2026-11-01","kind":"journal","publication_month":"2026-11","relevance":6,"screen_reason":"Estimates returns to US government R&D, offering insight into long-run productivity and fiscal policy.","screening_tag":"DM","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"DM","tag_inferred":false,"title":"The Returns to Government R&D: Evidence from US Appropriations Shocks","url":"https://doi.org/10.1257/aer.20231684"},{"abstract":"We study the causal effects of global supply chain disruptions by constructing a new index of real-time port congestion using Automatic Identification System data from container ships and a spatial clustering algorithm. We develop a model with search frictions between producers and retailers that links upstream production slack to downstream supply shortages and captures output and price responses to supply chain shocks. The co-movements of output, prices, spare capacity, and market tightness provide novel identification restrictions. We find that demand and supply shocks drove US disinflation in 2020, while the inflation surge in 2021 was driven mainly by supply chain shocks. (JEL C43, E31, F14, F23, L14, L92)","also_at":[],"analysis":{"correction":null,"current_prompt":false,"evidence":"we find that demand and supply shocks drove US disinflation in 2020","flags":[],"in_issue":false,"rationale":"The abstract explicitly references the United States, an advanced economy.","relevance_note":"Understanding whether inflation spikes arise from supply-chain bottlenecks helps policymakers calibrate responses and informs market participants about price pressure sources.","summary":"The paper builds a real-time port-congestion index from AIS ship data and a model of producer-retailer search frictions to identify supply-chain shocks. It finds that US disinflation in 2020 stemmed from demand and supply shocks, while the 2021 inflation surge was mainly supply-chain driven.","takeaways":["A new port-congestion index captures real-time supply-chain disruptions.","Model links upstream production slack to downstream shortages and price changes.","2020 US disinflation attributed to combined demand and supply shocks.","2021 US inflation surge primarily caused by supply-chain shocks."],"wording_correction":null},"authors":["Xiwen Bai","Jesús Fernández-Villaverde","Yiliang Li","Francesco Zanetti"],"date":"2026-11-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20250081","doi_registered":"2026-10-30","flags":[],"group":"journal","id":"7184e8fcc2316f3c","issue_date":"2026-11-01","kind":"journal","publication_month":"2026-11","relevance":9,"screen_reason":"Links supply-chain shocks to US inflation dynamics, directly informing monetary-policy and market outlooks.","screening_tag":"DM","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"DM","tag_inferred":false,"title":"The Causal Effects of Global Supply Chain Disruptions on Macroeconomic Outcomes: Evidence and Theory","url":"https://doi.org/10.1257/aer.20250081"},{"abstract":"Durables represent a large share of households' marginal propensity to spend (MPX). We develop a quantitative model of spending that takes durables into account and matches a rich set of empirical regularities simultaneously. Scaling the response of nondurables provides a poor approximation of the MPX on durables when it comes to its distribution in the population, its persistence over time, and its cyclicality. As an application, we study how the MPX varies with the size of stimulus checks and find that it declines more slowly compared to a model of purely nondurable spending. (JEL D11, E21, E32, E62, G51)","also_at":[],"analysis":null,"authors":["Nathan Zorzi","Martin Beraja"],"date":"2026-11-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20240666","doi_registered":"2026-10-30","flags":[],"group":"journal","id":"61231f258c904c68","issue_date":"2026-11-01","kind":"journal","publication_month":"2026-11","relevance":6,"screen_reason":"Quantifies durable-goods spending response to stimulus, useful for fiscal policy and consumption forecasts.","screening_tag":"DM","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"DM","tag_inferred":true,"title":"Durables and the Marginal Propensity to Spend","url":"https://doi.org/10.1257/aer.20240666"},{"abstract":"This paper studies the economic impacts of carbon pricing. Exploiting institutional features of the European carbon market and high-frequency data, I identify carbon policy shocks and trace their dynamic effects. A restrictive carbon policy shock raises energy prices, reduces emissions, spurs green innovation, but decreases economic activity—disproportionately burdening poorer households. Not only are the poor more affected because of their higher energy spending, but they also experience larger income losses. These indirect, general equilibrium effects via income and employment play an important role in the transmission of carbon pricing policies, accounting for about two-thirds of the aggregate consumption response. (JEL E23, E24, O44, Q41, Q54, Q55, Q58)","also_at":[],"analysis":null,"authors":["Diego R. Känzig"],"date":"2026-11-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20230448","doi_registered":"2026-10-30","flags":[],"group":"journal","id":"1d6437afd7a12646","issue_date":"2026-11-01","kind":"journal","publication_month":"2026-11","relevance":8,"screen_reason":"Analyzes carbon policy shocks and their macro-economic and distributional effects, informing energy-market outlooks.","screening_tag":"DM","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"DM","tag_inferred":true,"title":"The Unequal Economic Consequences of Carbon Pricing","url":"https://doi.org/10.1257/aer.20230448"},{"abstract":"We study how carbon pricing affects firms’ investment and capital productivity relative to comparable firms not exposed to environmental regulation. Using matched EUTL–Orbis data for European firms over 2005–2020, we estimate the effects of Phase 3 of the EU Emissions Trading System (EU ETS) on investment, productivity, and profitability through propensity-score matching and two-way fixed-effects difference-in-differences regressions. We find that ETS firms invest more than comparable non-ETS firms along both the intensive and extensive margins, while displaying lower measured capital productivity and no significant changes in total factor productivity, profitability, or fixed assets. To interpret this evidence, we develop a two-sector RBC model with abatement capital. In the regulated sector, firms accumulate a durable capital stock that reduces emissions intensity and future permit requirements but does not enter the production function. The model shows how carbon pricing can generate stronger investment in regulated firms while lowering measured capital productivity, highlighting the importance of distinguishing productive from compliance-related capital when evaluating the effects of environmental policy.","also_at":[],"analysis":null,"authors":["Wildmer Daniel Gregori","Fabio Di Dio","Lorenzo Frattarolo","Maria Martinez-Cillero"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"f8fcc741c00a5c42","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"This study provides empirical evidence on how carbon pricing and environmental regulation impact corporate investment and capital productivity in European firms.","screening_tag":"DM","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"DM","tag_inferred":true,"title":"Environmental Regulation, Abatement Capital and Investment: Evidence from EU ETS","url":"https://ideas.repec.org/p/ptu/wpaper/w202608.html"},{"abstract":"The Labour Force Survey (LFS) (pol. Badanie Aktywności Ekonomicznej Ludności – BAEL) is a key labour market study used both for estimating the most important labour market indicators and for conducting in-depth analyses. The survey results provide unique, highly detailed information on, among other things, economic activity, employment, economic inactivity, and unemployment. The population to which the BAEL results are generalized is adjusted every 10 years based on census results. After each census, the Statistics Poland (GUS) revises historical data based on the new population structure, but only going back a few years, which causes problems with the comparability of results over time. At the same time, these data are characterized by numerous periods of disrupted comparability caused by changes in the survey methodology over the years. In particular, the new classification of the respondents’ status on the labour market introduced in 2021 and the modified definition of the reference population have led to a break in the continuity of time series. The aim of this paper is to present a proposed correction to historical LFS data that will enable the construction of comparable and methodologically consistent data covering a long time period since 1995. This procedure consists of two stages: (1) adjusting the weights used to generalize the study results, and (2) adjusting the labour market status classification, thus unifying it across the entire analyzed time period. This procedure, to the best of the authors' knowledge, allows for the most accurate reconciliation of population series and labour market status since 1995. This allows for the implementation of analyses and in-depth forecasts on the longest possible time series. The following sections of this work outline the subsequent stages of deriving the final form of the proposed Polish LFS (BAEL) time series. The underlying assumptions and statistical methods used to obtain the presented results are described in detail. The final section contains conclusions and implications for the analysis of developments in the Polish labour market. The procedure presented here can also be used in the context of other representative surveys, such as the national Household Budget Survey (BBGD) conducted by the Statistics Poland (GUS), as well as international surveys such as the Labour Force Survey (LFS). The adjusted Polish LFS (BAEL) time series are available in a separate Excel file, which allows other researchers to use the adjusted data in their analyses of the Polish labour market.","also_at":[],"analysis":null,"authors":["Adrian Domitrz","Olga Zajkowska"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":["tag corrected from DM: tagged DM but the text names only emerging or developing economies (Poland)"],"group":"european-central-bank","id":"cbc4853f2611558c","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":3,"screen_reason":"Labour survey revision improves Polish labour data but has limited immediate market or policy impact.","screening_tag":"EM","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"EM","tag_inferred":false,"title":"Labour Force Survey in Poland, 1995–2020. A Proposal for Data Revision","url":"https://ideas.repec.org/p/nbp/nbpmis/386.html"},{"abstract":"The effects of the bank levy in Poland on the broadly defined credit market (including on loan rates and volumes) appear to be well documented, with the use of the standard difference-in-differences (DID) method. However, as, for example, Borusyak et al. (2024) note, in a setting with staggered treatment (as in the case of the bank levy in Poland), and different effects of the treatment in time and between cross-sections, the method might provide biased estimates. None of the studies to date used the heterogenous DID method that addresses this drawback. In this research note I use the heterogenous DID method to estimate the consequences of the bank levy. I also discuss other methodological choices. Among other things, I find that the bank levy has lowered deposit rates, raised rates on loans for house purchases, and changed the composition and the level of bank assets. However, I find no longer-term crowding out of credit by government bond securities (while the latter did increase, the former did not increase) or effects on bank profitability. The use of a more advised method did not lead to results in stark contrast with the earlier literature applying methods for causal inference.","also_at":[],"analysis":null,"authors":["Mariusz Kapuściński"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":["tag corrected from DM: tagged DM but the text names only emerging or developing economies (Poland)"],"group":"european-central-bank","id":"c8f0102e44944a26","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Re-examines Poland's bank levy impact on loan rates and credit, pertinent to banking regulation effects.","screening_tag":"EM","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"EM","tag_inferred":false,"title":"Yet another estimate of the consequences of the bank levy for the credit market in Poland","url":"https://ideas.repec.org/p/nbp/nbpmis/388.html"},{"abstract":"This paper assesses whether pretrained time-series foundation models and locally trained deep neural networks can make a useful contribution to central bank forecasting in a small, data-constrained economy. We compare TimesFM, Chronos-2, Moirai 2.0, and several locally estimated architectures with conventional statistical and econometric benchmarks and Banco de Portugal official projections. The applications cover monthly inflation, direct quarterly macroeconomic forecasting, and mixed-frequency nowcasting. All headline exercises use historical-vintage information and final data as evaluation truth. Foundation models are generally more competitive than locally trained neural networks and, for selected targets and horizons, match or outperform simple benchmarks and official projections. These gains are not uniform. Official projections remain particularly strong when judgment, granular or advance information, and exceptional economic events matter, while persistent or irregular series can leave little scope for deep-learning improvements. Locally trained and native mixed-frequency models nevertheless add useful signals for selected real and labor-market aggregates. The results therefore favor using deep-learning forecasts as systematic, reproducible complements to official projections rather than as universal replacements.","also_at":[],"analysis":null,"authors":["Paulo Júlio"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"c540f616936637eb","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":5,"screen_reason":"Evaluates deep-learning forecasts for a small economy, methodological relevance to central-bank modelling.","screening_tag":"DM","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"DM","tag_inferred":false,"title":"Deep Learning Models in Central Bank Forecasting","url":"https://ideas.repec.org/p/ptu/wpaper/w202612.html"},{"abstract":"This study examines whether banks incorporate climate transition risks into loan pricing for non-financial firms in Portugal, using loan-level data from 2018 to 2023. The results show that banks do price climate transition risks, with firms exhibiting greater emission intensity facing higher interest rates and smaller loan amounts, indicating both a pricing and credit rationing response to environmental risk. Public support measures influence how climate risk is transmitted, highlighting the potential relevance of policies with explicit environmental criteria. When accounting for the emission reduction efforts that firms are required to undertake under the current policies scenario, banks become more sensitive to firms’ emission levels when pricing interest rates. This suggests that banks incorporate, to some extent, expected future adjustment costs into their lending decisions. Coordinated government and prudential policies may help channel credit to low-emission and transformative projects, fostering the green transition while safeguarding financial stability.","also_at":[],"analysis":null,"authors":["Wildmer Daniel Gregori","Daniel Abreu","Laura Bartolomeu","Fotios Kalantzis"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"c4f34af4f7188c9d","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Shows Portuguese banks price climate transition risk, informing green-finance policy and credit allocation.","screening_tag":"DM","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"DM","tag_inferred":false,"title":"Do banks price firms’ climate transition risks?","url":"https://ideas.repec.org/p/ptu/wpaper/w202603.html"},{"abstract":"In a financially integrated world, some countries become international net creditors while others become international net debtors. This paper examines the long-run determinants of the net international investment position (NIIP). Using a cross-sectionally augmented error correction model estimated with the dynamic common correlated effects estimator on data for 38 countries from 1990 to 2023, we test several theoretical hypotheses – including the stages of development hypothesis, the life-cycle hypothesis, and Ricardian equivalence. The results show that an increase in relative GDP per capita and relative central government (CG) debt/GDP reduces the NIIP/GDP in the long run, while a rise in relative old-age dependency increases it. For selected countries, we decompose changes in the long-run NIIP/GDP since 1990. In the United States, a decline in the long-run NIIP/GDP reflects rising relative GDP per capita, falling relative old-age dependency, and, from 2018, growing CG debt/GDP. In Japan, relative population aging and a decline in relative GDP per capita support an increase in the long-run NIIP/GDP, while the expansion of relative CG debt/GDP weighs it down.","also_at":[],"analysis":null,"authors":["Kamila Kuziemska-Pawlak","Hiroyuki Ito"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"b96dfb091c52e242","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Studies long-run drivers of NIIP across many countries, offering macro insights relevant to sovereign risk.","screening_tag":"Transversal","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"Transversal","tag_inferred":false,"title":"Long-Run Determinants of the Net International Investment Position","url":"https://ideas.repec.org/p/nbp/nbpmis/380.html"},{"abstract":"The recent period of rising inflationary pressures and monetary policy tightening posed new challenges for macroprudential authorities in the euro area. In a monetary union, national authorities are unable to set independent monetary policy and rely on macroprudential tools to deal with domestic financial imbalances. This paper examines how inflation and interest rate tightening originating in the broader euro area spill over to a small open economy within the union, and assesses the role of national macroprudential policy in mitigating these effects. Using a structural model with banking frictions, housing, and both borrower-based and capital-based instruments, we show that pre-emptive and countercyclical macroprudential policy can strengthen banking sector resilience and dampen the impact of external shocks. In contrast, procyclical tightening may worsen outcomes, particularly when resilience is initially low.","also_at":[],"analysis":null,"authors":["Diana Lima","Duarte Maia","Paul Levine","Jonathan Swarbrick","Stylianos Tsiaras"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"b95fddd1d8ace16d","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":8,"screen_reason":"Analyzes macroprudential tools to counter euro-area inflation shocks, directly informing policy and banking stability.","screening_tag":"DM","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"DM","tag_inferred":false,"title":"Beyond monetary policy: Macroprudential responses to inflationary shocks","url":"https://ideas.repec.org/p/ptu/wpaper/w202609.html"},{"abstract":"This paper investigates the impact of oil shock on firms and the transmission role that the banking sector can play. In case of an oil supply news shock, as defined by Kanzig (2021), more energy-dependent firms expand their balance sheets less and decrease their investment relative to other firms. Using bank–firm level data, we show that banks play a key role as they reduce lending when they have a larger loan portfolio exposed to energy. Energy-exposed banks also adjust the terms of the loans, such as interest rate, thus contributing to exacerbate oil shock for the real sector. Our findings suggest that the effect of an oil shock is not confined to oil-dependent industries, highlighting the broader transmission channels through which oil shocks affect firms.","also_at":[],"analysis":null,"authors":["Jaime Leyva","Roberto Panzica","Ｍichela Rancan"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"b2ea30f600ba8e24","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":8,"screen_reason":"Links oil supply shocks to corporate credit conditions, highlighting broader financial transmission channels.","screening_tag":"Transversal","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"Transversal","tag_inferred":false,"title":"Oil Shocks, Energy Dependence and the Corporate Credit Channel","url":"https://ideas.repec.org/p/ptu/wpaper/w202606.html"},{"abstract":"We propose a panel test for whether a long-run cointegrating relationship holds throughout the sample or temporarily breaks down through a transient explosive episode before reverting. Existing stationarity-null tests are designed to detect permanent nonstationarity and have low power against temporary explosiveness, while recursive explosive-root tests require a known normalized cointegrating vector and are not applicable when the long-run relationship involves multiple estimated fundamentals. Our procedure fills this gap by first estimating the cointegrating relationship using pooled Dynamic OLS and then applying a rolling self-normalized stationarity test to the estimated equilibrium errors. Forward and backward rolling supremum statistics are combined to detect explosive episodes regardless of timing. Local-to-unity pre-filtering improves size control under highly persistent errors, while bootstrap critical values provide inference. Monte Carlo simulations indicate good size and satisfactory power of the test. Applied to a quarterly panel of 50 U.S. states from 1975 to 2025, the test identifies a transient explosive departure from the house-price-to-fundamentals equilibrium during the mid-2000s housing boom, followed by reversion rather than permanent breakdown of the long-run relationship.","also_at":[],"analysis":null,"authors":["Paulo M.M. Rodrigues","Philipp Sibbertsen","Gabriel Zsurkis"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"a46fa0bd2e933997","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":4,"screen_reason":"Presents a technical econometric method for detecting bubbles in panel data, with a specific application to US housing markets.","screening_tag":"DM","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"DM","tag_inferred":false,"title":"Testing for Explosiveness in Panels: A Self-Normalized Test for Stationarity in Cointegrating Residuals","url":"https://ideas.repec.org/p/ptu/wpaper/w202605.html"},{"abstract":"This paper presents new evidence on the role of collateral in bank-firm lending and its interaction with monetary policy. Loans secured with collateral have lower spreads than unsecured loans and financial assets generate greater spread discounts than other collateral types, including real assets. The valuation of collateral is sensitive to monetary policy shocks. Contractionary policy shocks cause the spread discount on loans secured with real assets to rise by more than other collateral types. Contractionary policy shocks also cause the spread discount smaller firms receive on secured loans to fall. This monetary policy-contingent valuation of collateral puts smaller firms at a disadvantage because they lack real assets to pledge.","also_at":[],"analysis":null,"authors":["Dudley Cooke"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"82f3c566bdce4afc","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":8,"screen_reason":"Shows how monetary-policy shocks alter collateral valuation and loan spreads, affecting bank-firm lending conditions.","screening_tag":"DM","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"DM","tag_inferred":true,"title":"The Role of Monetary Policy for the Valuation of Collateral in Bank-Firm Lending","url":"https://ideas.repec.org/p/ptu/wpaper/w202604.html"},{"abstract":"This paper explores potential asymmetry and heterogeneity in price responses to two identical VAT shocks of opposite sign. To this end, we study how Polish food retailers reacted to a temporary VAT cut from 5% to 0% in February 2022 and its reversal in April 2024. Combining monthly CPI micro data together with high-frequency (daily) web-scraped prices allows us to identify price adjustments with greater precision and to distinguish immediate reactions from medium-term dynamics. We find that the VAT cut was passed through almost fully and immediately across all retailers via a sharp increase in the frequency of price decreases. By contrast, the VAT increase generated only partial and heterogeneous pass through: among small retailers it was immediate and complete, whereas large retailers raised their prices only modestly on impact and continued to do so with a delay. To rationalize this key asymmetry in prices response, we outline a simple framework in which price hikes trigger psychological menu costs—stemming from consumer loss aversion and customer anger— while price cuts do not, leading to weaker and delayed pass-through of VAT increases.","also_at":[],"analysis":null,"authors":["Damian Stelmasiak","Karol Szafranek","Paweł Macias","Krzysztof Makarski"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":["tag corrected from DM: tagged DM but the text names only emerging or developing economies (Poland)"],"group":"european-central-bank","id":"7ead144f11383583","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":5,"screen_reason":"Analyzes asymmetric VAT pass-through in Poland, informing price rigidity and tax policy effects on consumer markets.","screening_tag":"EM","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"EM","tag_inferred":false,"title":"Food price responses to VAT changes: Price rigidity perspective from official and online data","url":"https://ideas.repec.org/p/nbp/nbpmis/384.html"},{"abstract":"This paper introduces a novel Bayesian SVAR framework to identify the short-run drivers of export fluctuations across 18 EU economies, focusing on transmission through Global Value Chains (GVCs). By applying shock identification via sign restrictions within a hierarchical block exogeneity structure (domestic, foreign, and global), we offer four key insights. First, we show that while the Great Trade Collapse was primarily driven by global demand and uncertainty, the COVID-19 crisis involved a complex confluence of non-domestic demand and supply shocks. Second, tight integration within European production networks does not shield these economies from global structural shocks, which remain the primary drivers of export variance. Third, we provide evidence that trade openness and participation in investment-specific GVCs heighten the sensitivity of domestic exports to global shocks, particularly through cost-push mechanisms in backward linkages, while shorter GVC forward linkages tend to reduce this exposure.","also_at":[],"analysis":null,"authors":["Paweł R. Galiński","Jakub Mućk"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"7a07081affc44e4b","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Uses Bayesian SVAR to pinpoint export drivers in EU, highlighting global shock transmission to advanced economies.","screening_tag":"DM","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"DM","tag_inferred":true,"title":"Understanding the dynamics of export in the short run. The role of foreign and global shocks","url":"https://ideas.repec.org/p/nbp/nbpmis/387.html"},{"abstract":"This paper quantifies the magnitude and evolution of the efficiency of resource allocation in the Polish enterprise sector over 1993–2023 using a near-census of non-financial firms with 10+ employees. The baseline approach follows Hsieh and Klenow (2009) and shows that hypothetical elimination of within-industry inefficiencies generate sizeable and rising gains in productivity and value added, increasing from close to 40% of value added in the 1990s to roughly 70–75% in the early 2020s. Deteriorating allocation efficiency of resources is robust to changes in the identification scheme and to changes in the underlying model (accounting for wedges related to the use of materials or allowing for non-unit economies of scale and markups that vary across sectors). The efficiency of allocation worsens primarily in services and is due to entry and exit, rather than within-cohort dynamics. Firm-level regressions show that high-productive firms and middle-sized firms are disproportionately too small, that non-exporters and more profitable firms exhibit larger wedges, and that subsidies are conductive to better allocation of resources, while the same characteristics often have opposing effects on actual growth of firms’ value added. It implies that market forces and policies do not systematically steer firms toward efficient scales. Deteriorating allocation efficiency can also be a factor explaining the slowdown of productivity growth in the Polish economy since the 2000s.","also_at":[],"analysis":null,"authors":["Michał Gradzewicz"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":["tag corrected from DM: tagged DM but the text names only emerging or developing economies (Poland)"],"group":"european-central-bank","id":"738d35f2c46eb5bf","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Quantifies resource-allocation inefficiencies in Poland, informing productivity and growth discussions for advanced economies.","screening_tag":"EM","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"EM","tag_inferred":false,"title":"How much does the intra-sectoral dispersion of inefficiency weight on the aggregate productivity in the Polish Economy?","url":"https://ideas.repec.org/p/nbp/nbpmis/385.html"},{"abstract":"This paper examines how interfirm trade relationships shape job-to-job mobility along domestic supply chains. Using Hungarian administrative data of firm-to-firm transactions and matched employer-employee records from 2015–2022, we estimate event-study models with dyadic fixed effects and matched non-trading controls. Trade roughly doubles worker mobility between partners, with larger effects for pairs characterized by high trade shares, and when the partner has a high wage, is a superstar, or growing. Downstream mobility always exceeds upstream mobility. We find no consistent differences between high- and low-skill mobility, and mobility along supply chains does not generate systematically higher wage growth.","also_at":[],"analysis":null,"authors":["Lajos Tamás Szabó","Álmos Telegdy","András Borsos"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":["tag corrected from DM: tagged DM but the text names only emerging or developing economies (Hungary)"],"group":"european-central-bank","id":"737c6c6c30a0f2b1","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":3,"screen_reason":"Studies labor mobility along supply chains in Hungary; tangential to macro-policy and markets.","screening_tag":"EM","selected_in":[],"source":"mnb","source_name":"Magyar Nemzeti Bank","tag":"EM","tag_inferred":false,"title":"Upstream and Downstream Worker Mobility Along the Supply Chain","url":"https://ideas.repec.org/p/mnb/wpaper/2026-4.html"},{"abstract":"In this research note I propose a simple yet novel method to decompose changes in the credit-to-GDP ratio. Instead of modelling or filtering the credit-to-GDP ratio directly, I make a historical decomposition of the components of the ratio. I use Bayesian structural vector autoregressive models identified with sign and zero restrictions. Then, I make a historical decomposition of the credit-to-GDP ratio based on the decompositions of its components. I apply the method to data for Poland. I find that between 64 and 70% of (the explainable part of) the decrease in the credit-to-GDP ratio in Poland after the COVID-19 pandemic can be attributed to shocks affecting mainly demand for credit, while credit supply shocks made up the remaining 30-36% of the decrease.","also_at":[],"analysis":null,"authors":["Mariusz Kapuściński"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"64283e69be6c3e75","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Decomposes Poland’s post-COVID credit-to-GDP drop, shedding light on demand-vs-supply credit shocks in an emerging market.","screening_tag":"EM","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"EM","tag_inferred":false,"title":"A cyclical explanation of the decrease in the credit-to-GDP ratio in Poland after the COVID-19 pandemic","url":"https://ideas.repec.org/p/nbp/nbpmis/381.html"},{"abstract":"This paper studies macroprudential policy in a small open economy with financial intermediation and nominal rigidity. Fluctuations in bank deposit rates - which depend on the focus of monetary policy - create liability-side volatility, destabilize net interest margins, and reduce output. A macroprudential policy which shifts bank funding away from deposits towards equity enhances domestic risk-sharing and mitigates volatility. Optimal macroprudential policy generates bank capital ratios that differ by up to 5 percentage points depending on whether monetary policy stabilizes domestic prices or the exchange rate. Relative to an unregulated economy, macroprudential policy raises welfare by between 0.4 percent and 0.9 percent of steady-stateconsumption.","also_at":[],"analysis":null,"authors":["Dudley Cooke","Tatiana Damjanovic"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"63f6c456e6431e10","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Studies optimal macroprudential tools in an open economy, linking policy design to bank stability and output.","screening_tag":"DM","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"DM","tag_inferred":true,"title":"Optimal Macroprudential Policy and Bank Capital in Open Economies","url":"https://ideas.repec.org/p/ptu/wpaper/w202601.html"},{"abstract":"We discuss the implications of macroprudential policymakers' welfare choices based on a policy exercise that determines optimal capital requirements for banks. The inter-linkages between the financial system and the real economy are analyzed with a DSGE model with financial frictions, providing a rationale for capital regulation. The existence of heterogeneous agents allows several equilibria depending on the balance between potential conflicting objectives of savers - who favor banking resilience - and borrowers - who benefit from better credit conditions. These equilibria can be translated into preferences policymakers have between promoting the resilience of the banking system and economic growth. These preferences are modeled through three welfare-maximising strategies. We find that policymakers' preferences play a role in determining optimal capital requirements, which, in turn, conditions bank resilience, economic growth and well-being in the long-run. The sum of welfare gains strategy yields higher banking sector resilience, while improving the well-being of savers without disregarding the interests of borrowers.","also_at":[],"analysis":null,"authors":["Diana Lima","Duarte Maia","Rita Basto"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"5f34b9cde2e741fe","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":8,"screen_reason":"Analyzes welfare trade-offs of bank capital rules, directly relevant to macroprudential policy and banking market stability.","screening_tag":"DM","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"DM","tag_inferred":true,"title":"Balancing acts: policymakers' choices between bank resilience and economic growth","url":"https://ideas.repec.org/p/ptu/wpaper/w202607.html"},{"abstract":"This paper investigates the role of demand shocks in driving labour market dynamics in Poland, an economy that transitioned from very high to low and stable unemployment despite repeated adverse shocks. Our contribution is threefold. First, we propose two complementary sign-restricted Bayesian VAR models that distinguish between labour-extensive and labour-intensive aggregate demand shocks, where the former operate primarily through changes in employment, while the latter mainly affect workers’ effort and hours per worker. Despite different specifications, both models yield highly consistent results. Second, we find that labour-extensive demand shocks are a key driver of unemployment, labour-intensive demand shocks primarily affect output, prices, and productivity, whereas both shocks are similarly important for hours per worker. Third, we document that the relative importance of these shocks changes over time, suggesting that the dominant margin of labour market adjustment may depend on economic conditions and the policy environment.","also_at":[],"analysis":null,"authors":["Łukasz Postek","Małgorzata Walerych"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"37a6c522c06cda8b","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Analyzes demand shocks and labor adjustments in Poland, informing macro policy and labor market outlook.","screening_tag":"EM","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"EM","tag_inferred":false,"title":"Hours or Heads? Demand Shocks and Labour Market Adjustments in Poland","url":"https://ideas.repec.org/p/nbp/nbpmis/389.html"},{"abstract":"While pay transparency is an increasingly popular policy to reduce the gender wage gap (GWG), its effectiveness is still unclear. We evaluate the impact of a 2018 law in Portugal that required firms to assess their potential gender wage disparities, while imposing penalties to firms of 250 or more employees that did not correct or justify gender gaps. Using difference-in-difference-in-differences, regression discontinuity, and difference-in-discontinuity methods, together with detailed matched data, we find that the transparency reform had a minimal impact to reduced the GWG by around 1 percentage point (p.p.). These effects are particularly strong in firms that employ high-skilled females, and for employees that are not covered by collective bargaining, where the impacts rise to 1.5 p.p.. This effect is not associated with employment effects.","also_at":[],"analysis":null,"authors":["Ana Melissa Ferreira","Pedro Brinca","João Duarte","João Pereira","Pedro Martins"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"34873495cd209e8e","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":3,"screen_reason":"Evaluates gender-pay transparency policy with limited macro-economic impact.","screening_tag":"DM","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"DM","tag_inferred":false,"title":"Can transparency mandates reduce the gender wage gap? Firm size discontinuity evidence","url":"https://ideas.repec.org/p/ptu/wpaper/w202610.html"},{"abstract":"Nominal rigidities play a central role in monetary policy transmission, shaping how inflation and real activity respond to various shocks. Using a large longitudinal dataset of granular price data for Poland covering 2000–2024, we contribute to the literature on price stickiness across several dimensions. First, we document the price-setting behaviour in Poland. Second, we show how the process was affected by the turbulent post-COVID-19 period and Russia’s full-scale invasion of Ukraine, evaluating the importance of the intensive and extensive margins of price adjustments. Third, we distinguish between sticky and flexible sectors, revealing heterogeneity in prices response to economic variables and shocks. We also compare the price-setting process in Poland with those in the euro area and the US. Finally, we complement these analyses with simulations performed on a two-sector DSGE model. Overall, we provide new, comprehensive evidence on price rigidity and discuss its implications for monetary policy transmission.","also_at":[],"analysis":null,"authors":["Paweł Macias","Damian Stelmasiak","Karol Szafranek","Krzysztof Makarski"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"302c820985c320f2","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Provides new evidence on price rigidity in Poland, with implications for monetary policy transmission in a key EU economy.","screening_tag":"Transversal","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"Transversal","tag_inferred":false,"title":"New evidence on consumer price rigidity in Poland","url":"https://ideas.repec.org/p/nbp/nbpmis/383.html"},{"abstract":"We study the distributional consequences of the recent inflationary surge and the subsequent monetary policy response in the euro area. Using an estimated two-asset Heterogeneous Agent New Keynesian model with an overlapping generations structure, we analyze the macroeconomic shocks driving inflation between 2021 and 2022. We find that these shocks generated substantial redistribution from young and poor households toward older and wealthier ones. By keeping interest rates unchanged until mid-2022, monetary policy largely offset these distributional effects. A policy response based solely on a standard Taylor rule would have failed to mitigate the redistribution.","also_at":[],"analysis":null,"authors":["Michał Brzoza-Brzezina","Rodolfo Rigato"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"1db56acedc28c004","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Shows how recent euro-area monetary policy reshaped wealth distribution, relevant for policy and market expectations.","screening_tag":"DM","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"DM","tag_inferred":false,"title":"The Great Redistribution that Wasn’t: a HANK-OLG Perspective on Monetary Policy","url":"https://ideas.repec.org/p/nbp/nbpmis/382.html"},{"abstract":"Sample selection and correlation between recoveries and the time to recovery are inherent to loan recovery datasets, leading to biased and inconsistent estimators of recovery rates. We characterize and quantify the biases of two common estimators, and we propose a class of estimators that corrects them. Simulations show that the bias increases with shorter observation windows and longer time to recovery. Real-world data on firm loans broadly confirms simulation results and shows that, even with sixty months of data, the biases of the two common estimators is at least ten percentage points and can be as high as twenty percentage points. These findings highlight the importance of addressing sample selection in recovery rate modeling for improved credit risk assessment and regulatory compliance.","also_at":[],"analysis":null,"authors":["Jaime Leyva","Tiago Pinheiro"],"date":"2026-10-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"029ee6259b17b006","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Improves credit risk modeling, directly relevant to loan portfolios and regulatory capital.","screening_tag":"DM","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"DM","tag_inferred":true,"title":"Biases in Loan Recovery-Rate Estimation","url":"https://ideas.repec.org/p/ptu/wpaper/w202602.html"},{"abstract":"We study whether sovereign risk continues to affect banks a decade after Europe began reshaping its financial architecture. Combining daily bank and sovereign credit default swap spreads with supervisory data on banks' domestic sovereign portfolios, we show that the sovereign-bank relationship remains economically meaningful but is highly conditional. Banks with larger sovereign holdings respond more sharply to home-sovereign risk, and this amplification is substantially stronger for mark-to-market than amortized-cost exposures, consistent with more immediate recognition of valuation losses. Sovereign-to-bank transmission is stronger for less-capitalized, wholesale-funded, and peripheral banks, during periods of elevated market uncertainty, and when the home sovereign has less fiscal capacity. The policy reforms aimed at weakening the sovereignbank relationship only managed to reduce the extent of the link, but not eliminate it.","also_at":[],"analysis":null,"authors":["Charlotte Hoopes","Pinar Uysal","Ilknur Zer"],"date":"2026-10-30","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"a8bc2c71e6957be9","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Analyzes sovereign-bank risk transmission in Europe, directly informing banking stability and policy decisions.","screening_tag":"DM","selected_in":[],"source":"fed-ifdp","source_name":"Federal Reserve Board, IFDP","tag":"DM","tag_inferred":true,"title":"When and for Whom Does the Sovereign-Bank Nexus Matter? Evidence from Post-Crisis Europe","url":"https://ideas.repec.org/p/fip/fedgif/103994.html"},{"abstract":"We introduce a novel monthly county-level consumption dataset constructed from spending data on over 350 million credit cards in the Federal Reserve’s Y-14M reports, covering over 3,000 U.S. counties since 2014. We first show that the data closely track traditional consumption measures, explaining 92 percent of the variation in monthly adjusted personal consumption expenditures (PCE) growth at the national level, capturing meaningful cross-sectional variation in annual adjusted PCE growth at the state level, and reproducing the impulse response of official consumption measures to identified monetary policy shocks. We then use the county-month panel to estimate heterogeneous consumption responses to monetary policy shocks across the county-level income distribution, an analysis infeasible with traditional consumption data. We find suggestive evidence that low-income counties exhibit larger spending declines than high-income counties, consistent with heterogeneous-agent New Keynesian models. Finally, we provide practical guidance for researchers working with similar data, discussing coverage, sample composition, and the approximation of credit card spending from credit bureau data.","also_at":[],"analysis":null,"authors":["Aditya Aladangady","Ricardo Duque Gabriel","Carlo Wix"],"date":"2026-10-30","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"7a12d5103187417d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Uses US credit-card consumption data to assess heterogeneous monetary-policy effects, directly informing policy and market analysis.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":false,"title":"Measuring Consumption with Credit Card Data: Benchmarking and Beyond","url":"https://www.federalreserve.gov/econres/feds/measuring-consumption-with-credit-card-data-benchmarking-and-beyond.htm"},{"abstract":"Abstract Economists and historians have long debated how open-access areas, frontier regions, and customary landholding regimes transformed into private property. This paper analyzes decentralized enclosure processes using the theory of aggregative games, examining how population density, enclosure costs, potential productivity gains, and local governance capacity, including the power to demand compensation, jointly determine the mix of property regimes. Depending on these fundamentals, private decisions to enclose may be strategic complements or substitutes. Strategic complements generate tipping points and socially destructive property races, whereas strategic substitutes produce smoother transitions and may leave enclosure below the social optimum. While policies to strengthen customary governance or compensate displaced stakeholders can realign incentives, addressing one distortion while neglecting others can worsen welfare.","also_at":[],"analysis":null,"authors":["Matthew J Baker","Jonathan Conning"],"date":"2026-10-30","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/restud/rdag118","doi_registered":"2026-10-20","flags":[],"group":"journal","id":"4a8c3f7f2efd3ba5","issue_date":null,"kind":"journal","publication_month":"2026-10","relevance":2,"screen_reason":"Theoretical land-rights model with limited direct macro or market implications.","screening_tag":"Transversal","selected_in":[],"source":"restud","source_name":"Review of Economic Studies","tag":"Transversal","tag_inferred":false,"title":"A Model of Enclosures: Coordination, Conflict, and Efficiency in the Transformation of Land Property Rights","url":"https://doi.org/10.1093/restud/rdag118"},{"abstract":"We use confidential granular data on euro area sovereign bond holdings to examine the heterogeneous behavior of investor types in response to country-specific geopolitical risk shocks. By distinguishing investor categories and accounting for their bond holding dynamics over time, we provide an empirical assessment of how different bond holders react to geopolitics. The analysis employs country-level geopolitical risk indices of the country of sovereign bonds, and applies local projection methods to estimate the dynamic responses of various investor groups to geopolitical risk shocks. In the case of high-debt euro area countries, i.e. Italy, France, Spain, and Belgium, we examine how geopolitical risks may trigger shifts in investor behavior that, in turn, could pose risks to fiscal sustainability.","also_at":[],"analysis":null,"authors":[],"date":"2026-10-30","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"3aba162865061d44","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Examines investor reactions to geopolitical risk in euro-area sovereign bonds, directly relevant to fiscal and market stability.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"The effects of geopolitical risk on sovereign debt holders in the euro area","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3303~10146acd61.en.pdf"},{"abstract":"Abstract We investigate a dynamic oligopoly model with two phases: a normal phase where an essential input is available, and a disruption phase where firms must rely on inventories. Disruptions create an overcutting pricing incentive arising from the option to forgo sales and monopolize the market once rivals stock out. This monopoly option causes the price to jump to a supracompetitive level at the advent of the disruption and to remain above the competitive price path throughout. Price caps raise welfare, but reduce inventory investment. Government reserves reduce prices and raise buffer stocks, as do reserve mandates when financially feasible.","also_at":[],"analysis":null,"authors":["Samuel Häfner","Curtis R. Taylor"],"date":"2026-10-26","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/restud/rdag119","doi_registered":"2026-10-23","flags":[],"group":"journal","id":"7ed1581f323dd31a","issue_date":null,"kind":"journal","publication_month":"2026-10","relevance":3,"screen_reason":"Theoretical model of price gouging during disruptions, limited immediate market application.","screening_tag":"Transversal","selected_in":[],"source":"restud","source_name":"Review of Economic Studies","tag":"Transversal","tag_inferred":false,"title":"Price Gouging and the Monopoly Option","url":"https://doi.org/10.1093/restud/rdag119"},{"abstract":"Revenue mobilization is a key objective in many IMF-supported programs, yet tax revenue-to-GDP forecasts often fall short of outcomes. This paper analyzes the underlying drivers of these forecast misses by leveraging two novel global datasets on tax policy yields and tax administration capacity. It finds that tax revenue-to-GDP forecast errors are primarily driven by over-optimism in forecasted yields of tax policy measures and tax buoyancy assumptions, as well as macroeconomic forecast errors, particularly for growth and trade openness. Stronger tax administration capacity and well-implemented and high-quality revenue related structural reforms are associated with lower forecast errors. Additional empirical analysis shows that over-optimism in forecasted tax policy yields declines significantly when revenue measures are well-designed, part of large-measure revenue packages, and accompanied by high-quality revenue-related structural reforms. Improving forecast realism requires better-grounded yield estimations and tax buoyancy assumptions, explicit consideration of implementation capacity, and a focus on well-designed revenue-related structural reforms.","also_at":[],"analysis":null,"authors":["Jean-Marc Atsebi","Qiaoe Chen","Nikolay Gueorguiev","Magali Pinat"],"date":"2026-10-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"f52e199aae3c47b8","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Identifies over-optimism in IMF tax-revenue forecasts, relevant for sovereign risk and fiscal policy modeling.","screening_tag":"Transversal","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"Transversal","tag_inferred":false,"title":"Understanding Over-Optimism in Tax Revenue-to-GDP Forecasts under IMF-supported Programs","url":"https://ideas.repec.org/p/imf/imfwpa/2026-224.html"},{"abstract":"This paper assesses the effectiveness of Morocco’s monetary policy transmission since 2018 in light of reforms aimed at modernizing the policy framework. Over the past decade, Morocco has introduced greater exchange rate flexibility, strengthened the legal and operational focus on price stability, and enhanced central bank communication—measures intended to anchor inflation expectations and improve transmission. Drawing on several years of post-reform data, we use a two-step empirical strategy: (i) identifying exogenous monetary policy shocks through a Taylor-rule-based approach leveraging Bank Al-Maghrib’s forecasts, and (ii) estimating their dynamic effects via local projections, a flexible approach well suited to settings with structural change and limited data. Our findings indicate that transmission to output and inflation has strengthened post-reform: a 1 percentage point policy rate hike reduces output by about 0.3 percent and inflation by 0.1 percent, compared to 0.1 and 0.05 percent pre-reform, respectively. However, responses remain delayed and muted relative to benchmark estimates for other emerging markets. Analysis of transmission channels shows the interest rate channel is most active, the credit channel is partially effective, and the exchange rate channel is stronger post-reform, while the asset price and expectations channels remain weak. These findings provide important insights for Morocco’s ongoing transition to an inflation targeting regime.","also_at":[],"analysis":null,"authors":["Ms. Nadia Mounir","Hannah C Brown"],"date":"2026-10-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"edf1ab6517538ce4","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Evaluates post-reform monetary transmission in Morocco, useful for EM policy and rate-impact assessments.","screening_tag":"EM","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"EM","tag_inferred":false,"title":"Effectiveness of Monetary Policy Transmission in Morocco amid Reforms to the Monetary Policy Framework","url":"https://ideas.repec.org/p/imf/imfwpa/2026-223.html"},{"abstract":"We compiled and processed a novel, comprehensive dataset of 1,063 speeches delivered by high-ranking Swiss National Bank officials between 1928 and 2024. Beyond tracking their quantitative evolution, we conducted an in-depth analysis of the length, readability and thematic content. To ensure robust results, we benchmarked traditional Python-based NLP text mining against generative artificial intelligence using ChatGPT. Our findings highlight four primary policy insights. First, the frequency of annual speeches has followed an upward trajectory since the mid-1950s, accelerating notably after the transition to flexible exchange rates. Second, a clear shift toward brevity is evident. Third, the language has become increasingly accessible since the 1960s. Fourth, inflation has moved to the forefront of the thematic discourse in the era of flexible exchange rates, while cyclical economic development and unemployment have received less emphasis. Finally, we outline key methodological lessons for deploying LLMs to analyze central bank communication, emphasizing the complementary relationship between probabilistic language models and deterministic Python frameworks, while addressing inherent algorithmic pitfalls and identifying critical open questions for future research.","also_at":[],"analysis":null,"authors":["Severin Joho","Enzo Rossi"],"date":"2026-10-23","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"cb700e5576b42517","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Uses NLP to analyze a century of Swiss central bank communication, providing insights into the evolution of policy narratives and inflation focus.","screening_tag":"DM","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"DM","tag_inferred":false,"title":"The evolution of frequency, language complexity and policy narrative: benchmarking Python-based NLP and ChatGPT on a century of SNB rhetoric","url":"https://ideas.repec.org/p/snb/snbwpa/2026-13.html"},{"abstract":"How are inflation expectations affected by foreign supply shocks? We show that, beyond bilateral exposure, a second network matters: the one linking forecasters to the countries they cover. Using forecasterlevel expectations around conflict episodes—precisely dated supply shocks that raise inflation through trade and energy linkages—we find that expectations are revised upward gradually in the days following a conflict. Within the same country and day, forecasters who cover the conflict country revise by 0.2 to 0.3 percentage points less than those who do not, and the differential roughly triples where bilateral exposure is highest. We rationalize this in a model where a public narrative overstates spillovers in proportion to bilateral exposure, and only forecasters covering the conflict country can discount it. The consensus therefore inherits a bias largest where exposure is high and coverage thin, and a central bank reading it at face value tightens more than fundamentals warrant.","also_at":[],"analysis":null,"authors":["Mr. Francesco Grigoli","Bertrand Gruss"],"date":"2026-10-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"b707a6295afda4d0","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Shows how conflict-driven supply shocks reshape inflation expectations, informing central-bank reading of forecasts.","screening_tag":"Transversal","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"Transversal","tag_inferred":false,"title":"Information Networks and Inflation Expectations: Evidence from Professional Forecasters and Conflicts","url":"https://ideas.repec.org/p/imf/imfwpa/2026-225.html"},{"abstract":"This paper analyzes how achieving Europe’s medium-term greenhouse gas mitigation targets enhances energy security, defined as the cushioning of the adverse macroeconomic impact of oil and gas price shocks. It uses the IMF’s Global Macroeconomic Model of the Energy Transition, which combines a rich set of New-Keynesian features with a detailed representation of fossil fuel use, including granular modelling of the transport and heating sectors. Future oil and gas price shocks are simulated in a scenario where Europe’s mitigation policy agenda has been fully implemented (and mitigation targets are met), and in a hypothetical scenario where mitigation policy has remained constant at the current level of ambition. A comparison shows that the policy agenda substantially dampens future shock transmission. The inflationary impact of both shocks is close to 40 percent larger under constant policies than under the mitigation agenda, and for oil shocks, the output decline is about twice as large. These energy security co-benefits materialize gradually as the economy adjusts to the mitigation agenda, and are shown to depend on ETS2, the new emissions trading system covering transportation and buildings. An additional exercise proxies for merit-order electricity pricing. In these simulations, the mitigation agenda further reduces pass-through from gas price shocks to electricity prices, thereby enhancing the macroeconomic stabilizing effects.","also_at":[],"analysis":null,"authors":["Simon Voigts","Sebastian Wende"],"date":"2026-10-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"9011b2c1b88d6981","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Analyzes EU mitigation policy’s cushioning of oil/gas price shocks, directly relevant to energy-price and inflation outlooks.","screening_tag":"DM","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"DM","tag_inferred":true,"title":"The EU’s Energy Transition and Fuel Price Shocks","url":"https://ideas.repec.org/p/imf/imfwpa/2026-226.html"},{"abstract":"Non-bank financial institutions (NBFIs) account for an increasingly large share of credit provision and play a central role in quantitative easing (QE). We develop a DSGE model with banks, NBFIs and a central bank interacting through wholesale deposits, bonds and reserve markets to study how monetary transmission changes as the size of NBFIs expands. We estimate the model on UK data to evaluate key parameters in the financial sector. We find that the transmission of conventional interest rate policy to output and inflation is essentially unaffected by the size of the NBFI sector. Conversely, the transmission of QE is strongly altered by the size of the NBFI sector and the source of its expansion. When the NBFI sector expands due to firm funding preferences, this amplifies QE. When it expands due to an increased cost of obtaining bank finance, transmission is largely unchanged. The results underscore that monetary policymakers retain rate control regardless of financial structure, but that the effectiveness of balance sheet policies depends on the composition and behaviour of the non-bank sector.","also_at":[],"analysis":null,"authors":["Nicolò Bandera","Kristina Bluwstein","Michael Kumhof","Mauricio Salgado-Moreno","Jacob Stevens"],"date":"2026-10-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"8362544b6c40bcb6","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Examines how non-bank financial sector size affects monetary policy transmission, relevant for rate and QE effectiveness.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":false,"title":"Lighting the shadows: central bank policy transmission through banks and non-banks","url":"https://ideas.repec.org/p/boe/boeewp/023907.html"},{"abstract":"This paper estimates the macroeconomic effects of forced displacement on host economies in SubSaharan Africa, drawing on cross-country panel data and country case studies of Burkina Faso, South Sudan, and Uganda to provide granular evidence on the consequences of spatial concentrations of forcibly displaced persons within countries. Estimates from a difference-in-differences local projections (LP-DiD) framework do not suggest that large refugee inflows significantly affect host-country GDP, inflation, or the current account balance over a five-year horizon. The effects on the primary fiscal balance also appear to be muted, yet this masks offsetting fiscal dynamics: government expenditures rise and fiscal revenues increase (mainly through taxes). These results are robust to restricting the control group to Sub-Saharan African economies. Under a broader treatment definition that captures the total displaced population (refugees and internally displaced persons), the GDP response turns significantly negative and intensifies with displacement severity, though this estimate is best interpreted as an upper bound because it cannot be fully separated from the effects of conflict itself that generates displacement. The cross-country findings are consistent with the case studies, which indicate generally muted effects on aggregate food inflation and wages. Beneath this muted aggregate response, however, a consistent pattern emerges across cases: prices of imported and processed staples rise, while those of locally produced cereals stay flat or fall. The case studies also yield mixed evidence regarding the impacts of displacement inflows on consumption and labor force participation, with such inflows reducing host employment in Burkina Faso but raising it in Uganda.","also_at":[],"analysis":null,"authors":["Hany Abdel-Latif","Mr. Antonio David","Mouhamadou Moustapha Ly","Elisee Wendlassida Miningou","Masateru Okamoto","Alex Vaval Pierre-Charles"],"date":"2026-10-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"76625f54f5013e38","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Assesses macro impacts of forced displacement in Sub-Saharan Africa, with modest fiscal implications.","screening_tag":"EM","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"EM","tag_inferred":false,"title":"Macroeconomic Effects of Forced Displacement in Sub-Saharan Africa","url":"https://ideas.repec.org/p/imf/imfwpa/2026-228.html"},{"abstract":"Recurring climate-related natural disasters pose significant macroeconomic and fiscal risks for highly exposed countries. We extend the Debt, Investment, Growth, and Natural Disasters (DIGNAD) model to incorporate Annual Average Loss (AAL) metrics, capturing the cumulative macro-fiscal effects of repeated natural disaster shocks. The augmented DIGNAD framework introduces recurring annual capital losses and negative productivity shocks, yielding more realistic growth and public debt trajectories under persistent disaster risk. We quantify the GDP losses from recurrent natural disasters and examine the trade-offs between higher adaptation investment (leading to higher recovered growth) and public debt accumulation. Using cross-country simulations for 33 disaster-prone economies and case studies (the Philippines, Mauritania, and Barbados), we find substantial heterogeneity in disaster impacts and adaptation effectiveness. Comparing risk-adjusted baseline projections with scenarios of scaled-up resilient vs. standard infrastructure investment, we find that investing in resilient public capital can significantly mitigate output losses in the long-term, albeit at the cost of higher public debt.","also_at":[],"analysis":null,"authors":["Mr. Giovanni Melina","Mr. Mehdi Raissi","Azar Sultanov","Mr. Bruno Versailles"],"date":"2026-10-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"5528dd7bdbf59d4b","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Quantifies macro-fiscal scarring from recurring natural disasters, relevant for risk-adjusted policy in exposed economies.","screening_tag":"EM","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"EM","tag_inferred":false,"title":"Recurring Natural Disasters and Macroeconomic Scarring: A Risk Adjusted DIGNAD Framework","url":"https://ideas.repec.org/p/imf/imfwpa/2026-222.html"},{"abstract":"We introduce the Global Fiscal Actions (GFA) Dataset, the first quarterly global narrative database of discretionary fiscal policy actions, covering 142 countries since 1990. GFA combines Economist Intelligence Unit country reports with large language models to systematically identify and classify tax and spending measures, together with their motivations, timing, implementation status, and supporting evidence. We validate the dataset against economists' assessments, existing narrative datasets, fiscal aggregates, and repeated AI extractions, demonstrating high accuracy and reproducibility. We illustrate its value through applications to fiscal cyclicality and country-specific fiscal multipliers, providing new evidence on the conduct and effectiveness of fiscal policy worldwide.","also_at":[],"analysis":null,"authors":["Hites Ahir","Miyoko Asai","Mr. Matthieu Bellon","Maria Chiara Cavalleri","Shuvam Das","Davide Furceri","Mr. Faizaan Kisat","Ms. Aiko Mineshima","Irene Rausell Moreno","Vishal Parmar","Nikhil Patel","Mr. Adrian Peralta-Alva"],"date":"2026-10-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"4f239fe2f5a0f12e","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Introduces a global fiscal actions dataset useful for analyzing discretionary fiscal policy worldwide.","screening_tag":"Transversal","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"Transversal","tag_inferred":false,"title":"The Global Fiscal Actions (GFA) Dataset","url":"https://ideas.repec.org/p/imf/imfwpa/2026-221.html"},{"abstract":"The literature characterizes zombie firms as economically unviable companies that continue to operate. This paper proposes that the majority of zombie firms can be viable, with positive continuation value, and arise endogenously from productivity shocks. Drawing on firm-level data covering the universe of Canadian firms and seven European countries, we document five stylized facts: zombie firms are widespread, unprofitable, unproductive, micro-sized, and transitory. We rationalize these findings by building a general equilibrium model of heterogeneous firms that abstracts from the conventional distortions thought to explain zombie firms. We show that standard productivity shocks are sufficient to explain the empirical patterns, and that the volatility of these shocks can be a key determinant of viable zombie firms, generating shares up to 35%. Since this volatility can also raise aggregate productivity and household utility, the presence of zombie firms is not a sufficient condition for lower welfare. Using a model-based definition to distinguish viability, we find limited evidence—around 0.25%—of unviable zombie firms in the data. Our results challenge the prevailing view that persistently weak firms are unviable and suggest that existing zombie firm measures likely capture viable firms.","also_at":[],"analysis":null,"authors":["Alexander Amundsen","Amélie Lafrance-Cooke","Danny Leung"],"date":"2026-10-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"3229a792c81cb31a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Explores zombie firm viability using Canadian/European data, limited direct macro-policy relevance.","screening_tag":"DM","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"DM","tag_inferred":false,"title":"Rethinking Zombie Firms: From Volatility to Viability","url":"https://ideas.repec.org/p/imf/imfwpa/2026-227.html"},{"abstract":"I study spillovers from U.S. bond supply shocks, identified from yield moves around U.S. Treasury auction announcements. Using the shocks as instruments in daily and monthly local projections for AEs and EMs, I find substantial pass-through to global long-term rates. A debt expansion shock that raises the U.S. 10-year yield by 10 bps lifts foreign 10-year yields by roughly 7 bps within a few business days. Monthly aggregation shows contractionary real effects: U.S. industrial production falls up to 0.4 percent after eight months and foreign industrial production by a comparable amount, around 0.4 percent, with a more persistent profile. The foreign contraction reflects financial tightening, exchange-rate depreciation, and weaker U.S. demand. Spillovers are heterogeneous: moving from the 25th to 75th percentile of foreign investor participation deepens the IP decline by 0.5 pp. Results are robust to a demand-side shock and consistent with the relevant benchmarks, highlighting U.S. bond supply as a key driver of global financial conditions and real activity, amplified by foreign investor participation and weak domestic fundamentals.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"U.S. bond supply as a key driver of global financial conditions","flags":[],"in_issue":true,"rationale":"The abstract discusses spillovers to both advanced economies and emerging markets, spanning multiple regions.","relevance_note":"The findings show how U.S. Treasury supply decisions can quickly affect global bond markets and real activity, informing policymakers about cross-border transmission of monetary-policy-like shocks.","summary":"The paper identifies U.S. Treasury auction-related bond supply shocks and uses them as instruments to trace effects on foreign yields and output. A shock raising the U.S. 10-year yield by 10 basis points lifts foreign 10-year yields by about 7 basis points and reduces industrial production in the U.S. and abroad by roughly 0.4 percent.","takeaways":["A 10-bp U.S. 10-year yield increase raises foreign 10-year yields by about 7 bps within days.","U.S. industrial production falls up to 0.4 percent eight months after the shock.","Foreign industrial production falls by a comparable 0.4 percent, with a more persistent profile.","Moving from the 25th to the 75th percentile of foreign investor participation deepens the industrial production decline by 0.5 percentage points."],"wording_correction":{"checked":"2026-11-01","human_reviewed":true,"made_by":"Claude (AI assistant)","reason":"The model left the 0.5 percentage points unattached to what was compared (\"higher foreign investor participation\"). The abstract compares the 25th with the 75th percentile.","source":"Abstract of the IMF working paper"}},"authors":["Danila Smirnov"],"date":"2026-10-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"090ae3794c56ce85","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Shows U.S. bond supply shocks directly affect global yields and real activity, crucial for markets and policy.","screening_tag":"Transversal","selected_in":["2026-10"],"source":"imf","source_name":"IMF Working Papers","tag":"Transversal","tag_inferred":false,"title":"Global Spillovers from U.S. Bond Supply Shocks","url":"https://ideas.repec.org/p/imf/imfwpa/2026-229.html"},{"abstract":"Abstract This paper studies how new varieties enter markets and become locally available. We provide causal evidence of demand externalities that operate in two steps. First, information about new varieties diffuses directly through real-world social ties among consumers. Second, early purchases generate an indirect spillover to firms: local retailers learn from “pioneer” consumers which new varieties are most likely to succeed and adjust their product offerings accordingly. We study this process in the context of direct-to-consumer imports. Using customs records on individuals’ purchases matched to population-wide social networks, international migrant links, and retailer catchment areas, we document economically meaningful demand externalities. Product-specific expenditure shocks abroad transmit through migrant networks and shift which varieties consumers purchase. Leveraging these shocks as a plausibly exogenous source of local demand variation, we show strong peer effects: prior purchases by close neighbors, coworkers, or friends increase an individual’s likelihood of purchasing the same variety, especially for premium and visible goods. We leverage this result to identify an indirect spillover from consumers to firms: retailers are more likely to add a variety to their assortment when it becomes popular among consumers in their catchment area. Combining the instrument with linked consumer–retailer data and a self-conducted retailer survey, we show that this response reflects learning about latent demand for varieties not yet stocked locally. Together, social diffusion and retailer learning generate demand multipliers that reshape local product availability and expand access to global variety.","also_at":[],"analysis":null,"authors":["David Argente","Esteban Méndez","Diana Van Patten"],"date":"2026-10-22","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/qje/qjag052","doi_registered":"2026-10-20","flags":[],"group":"journal","id":"b3dce1869158e061","issue_date":null,"kind":"journal","publication_month":"2026-10","relevance":3,"screen_reason":"Examines social-network diffusion of new products, modest relevance for consumer-goods market dynamics.","screening_tag":"Transversal","selected_in":[],"source":"qje","source_name":"Quarterly Journal of Economics","tag":"Transversal","tag_inferred":false,"title":"How New Products Enter Markets: Social Networks, Consumer Imports, and Retailer Learning","url":"https://doi.org/10.1093/qje/qjag052"},{"abstract":"This paper estimates the causal impact of public investment on economic activity in European economies. While the literature generally finds that public investment multipliers exceed those of public consumption, the existing estimates vary widely, reflecting, among other factors, the challenges of identifying exogenous public investment shocks in the presence of anticipation and endogeneity. We address these challenges by using the European Commission’s public investment forecast errors as an instrument for realised public investment within an IV-LP framework. We construct a novel dataset covering 23 European countries over 2002-2023 and measure public investment forecast errors in real monetary terms rather than as differences between forecast and realised public-investment-to-GDP ratios, thereby avoiding variation arising mechanically from the GDP denominator. We estimate cumulative multipliers in a single step, allowing us to quantify their uncertainty directly. These multipliers relate the cumulative output response to the cumulative change in public investment, accounting for spending effects that persist be-yond the initial shock. The findings suggest that the cumulative multiplier of public investment reaches approximately 2.1 after five years, with most of the effect materialising within the first 2-3 years. The multiplier is state-dependent: it is significantly larger during recessions, when public debt is low, and when the existing stock of public capital is relatively low.","also_at":[],"analysis":null,"authors":["Olegs Matvejevs","Olegs Tkacevs"],"date":"2026-10-22","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"b192ce425e6177f1","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Provides causal public-investment multipliers for Europe, directly informing fiscal policy and growth forecasts.","screening_tag":"DM","selected_in":[],"source":"latvijas-banka","source_name":"Latvijas Banka","tag":"DM","tag_inferred":true,"title":"Causal Macroeconomic Effects of Public Investment","url":"https://ideas.repec.org/p/ltv/wpaper/202604.html"},{"abstract":"Abstract Intensifying climate change makes protection against natural disaster risk – either through ex ante insurance or ex post aid – a first-order public policy issue. Flood risk protection in the U.S. traditionally featured ex post aid through FEMA and heavily subsidized insurance through the National Flood Insurance Program (NFIP). In an effort to correct subsidy-induced overbuilding and under-mitigation in flood-prone areas, the NFIP recently moved to actuarially fair insurance premiums. But this change has two unintended consequences: a fiscal spillover onto FEMA disaster aid as insurance coverage declines in flood-prone areas, and household exposure to uninsurable reclassification risk from uncertain climate projections. We develop a model of optimal flood insurance that incorporates the static and dynamic tradeoffs of subsidizing premiums. We then use a variety of identification strategies and data to estimate the five key parameters needed to implement this model. We find that the fiscal spillover and reclassification risk protection benefits significantly outweigh the moral hazard costs, and that the optimal subsidy to flood insurance is 51%, comparable to the level of subsidization before the recent reform.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"flood risk protection in the U.S. traditionally featured ex post aid through FEMA","flags":[],"in_issue":false,"rationale":"The abstract references the U.S., FEMA, and the National Flood Insurance Program.","relevance_note":"Policymakers and insurers should note that subsidizing flood insurance at the identified level could improve welfare despite higher aid costs, informing U.S. disaster-relief budgeting and insurance design.","summary":"The paper builds a model of flood insurance that balances subsidies, fiscal spillovers to disaster aid, and reclassification risk, then estimates its parameters for the U.S. It finds that the benefits of spillovers and risk protection exceed moral-hazard costs, implying an optimal subsidy of about 51%.","takeaways":["Fiscal spillovers to FEMA aid increase when insurance coverage falls.","Households face uninsurable reclassification risk from climate uncertainty.","Estimated optimal flood-insurance subsidy is 51% of premiums.","Spillover and risk-protection benefits outweigh moral-hazard costs."],"wording_correction":null},"authors":["Jonathan Gruber A B","Adam Solomon"],"date":"2026-10-22","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/qje/qjag051","doi_registered":"2026-10-20","flags":[],"group":"journal","id":"726929168488b272","issue_date":null,"kind":"journal","publication_month":"2026-10","relevance":7,"screen_reason":"Analyzes optimal flood-insurance subsidies and fiscal spillovers in the US, pertinent to climate-risk policy and budgeting.","screening_tag":"DM","selected_in":[],"source":"qje","source_name":"Quarterly Journal of Economics","tag":"DM","tag_inferred":false,"title":"Optimal Flood Insurance in a Second-Best World: Fiscal Spillovers, Reclassification Risk, and Moral Hazard","url":"https://doi.org/10.1093/qje/qjag051"},{"abstract":"This paper studies one of the largest spatial redevelopment efforts in the United States: HOPE VI public housing demolitions. Focusing on Chicago, we estimate a neighborhood choice model combining administrative records tracking displaced public-housing residents with Census Bureau data capturing citywide sorting and prices. Demolitions generate large welfare losses driven by displacement costs, partially offset by housing vouchers. Demolitions also raise housing prices and reshape neighborhood composition, with gains concentrated among higher-income homeowners. Counterfactuals show that more generous vouchers and counseling programs mitigate but do not eliminate displaced residents’ losses, while expanded redevelopment yields larger citywide gains through general-equilibrium effects.","also_at":[],"analysis":null,"authors":["Milena Almagro","Eric Chyn","Bryan Stuart"],"date":"2026-10-20","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"60de8260cb66ff3e","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Studies welfare effects of US public-housing demolition, limited macro relevance but touches housing-price dynamics.","screening_tag":"DM","selected_in":[],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"DM","tag_inferred":false,"title":"The Welfare Impacts of Urban Renewal and Forced Relocation: Evidence from Chicago’s HOPE VI Demolitions","url":"https://ideas.repec.org/p/fip/fedpwp/103963.html"},{"abstract":"General-purpose technologies create large opportunities but make their distribution across firms difficult to assess in real time. We use banks as interpreters of the rise of generative AI by studying lender-specific probability-of-default (PD) estimates for private firms in four large euro-area economies. As public attention to AI rises after ChatGPT, banks lower assessed default risk for borrowers in highly AI-exposed industries by about 5%. The reassessment is weaker for labor-intensive firms and stronger among lenders with pre-existing industry expertise. Yet the favorable industry-level effect is accompanied by a systematic reordering within product markets: banks reassess firms with stronger pre-ChatGPT market positions less favorably relative to their competitors, compressing the risk advantage associated with market leadership. Credit allocation moves in the same direction, with market leaders experiencing relatively lower drawn and committed credit, more relationship exits, and fewer new lenders. The reordering also predicts subsequent bad-credit events beyond banks’ consensus PDs. Internal bank assessments therefore provide a forward-looking measure of how generative AI is expected to reshape competitive risk.","also_at":[],"analysis":null,"authors":[],"date":"2026-10-19","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"71d9ee13633e8281","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Shows AI-driven credit reallocation in euro-area banks, directly affecting market risk and policy transmission.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Headwind or tailwind? How banks interpret borrowers’ AI exposure","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3302~7ff8a286bc.en.pdf"},{"abstract":"The rapid advance of generative artificial intelligence (AI) has sparked intense debate about its effects on labor markets. We draw on over 700 million online job postings to present new evidence covering 110 economies. Demand has declined by nearly 10 percent in more AI-exposed occupations but, surprisingly, this impact has stabilized even as AI has become more capable. To understand this pattern, we develop a novel measure of AI adoption based on references to emerging AI skills in job postings. Demand for these skills has grown rapidly, particularly in more exposed occupations. Indeed, firms with stronger demand for AI skills exhibit faster growth in job postings, even in more exposed occupations. AI appears to be reshaping labor demand by both compressing hiring in more exposed occupations and generating new opportunities for workers with AI skills.","also_at":[],"analysis":null,"authors":["Mr. Sakai Ando","Mr. Divya Kirti","Willa Lin","Assyifa Szami Ilman"],"date":"2026-10-18","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"5177bd11408995ab","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Provides global AI labor-demand evidence across many economies, relevant for macro forecasts.","screening_tag":"Transversal","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"Transversal","tag_inferred":false,"title":"How is Labor Demand Changing as AI Improves? New Global Evidence","url":"https://ideas.repec.org/p/imf/imfwpa/2026-220.html"},{"abstract":"Changes in the Treasury’s cash management practices after the COVID pandemic in-creased the Fed’s balance sheet by as much as 2 percentage points of nominal GDP, including the larger buffer required to maintain ample reserve levels. A parsimonious time-series model shows that, once we account for the impact of the Treasury’s extraor-dinary measures during debt-ceiling episodes, the observed changes in the Treasury General Account since COVID are mostly driven by higher target balances. An effec-tive sterilization program by the Fed would require timely and accurate information at high frequencies.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"the Fed’s balance sheet by as much as 2 percentage points of nominal GDP","flags":[],"in_issue":true,"rationale":"The abstract references the U.S. Treasury and the Federal Reserve, both U.S. institutions.","relevance_note":"Understanding the size of balance-sheet expansion and the data needs for sterilization helps policymakers gauge monetary-policy capacity and fiscal-monetary interactions.","summary":"The paper finds that Treasury cash-management changes since the COVID pandemic raised the Federal Reserve's balance sheet by as much as 2 percentage points of nominal GDP. A simple time-series model that allows for debt-ceiling episodes finds that changes in the Treasury General Account since COVID are mostly driven by higher target balances.","takeaways":["Treasury cash-management changes since COVID raised the Fed's balance sheet by as much as 2 percentage points of nominal GDP.","Once debt-ceiling extraordinary measures are accounted for, Treasury General Account changes since COVID are mostly driven by higher target balances.","Effective Fed sterilization would require timely and accurate information at high frequencies."],"wording_correction":{"checked":"2026-11-01","human_reviewed":true,"made_by":"Claude (AI assistant)","reason":"The model attributed the balance-sheet expansion to higher target balances. The abstract attributes the changes in the Treasury General Account to them.","source":"Abstract of the Philadelphia Fed working paper"}},"authors":["Roc Armenter"],"date":"2026-10-16","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"5624899798e56060","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"The paper directly addresses the impact of Treasury cash management and the TGA on the Fed's balance sheet and liquidity, a key topic for monetary policy.","screening_tag":"DM","selected_in":["2026-10"],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"DM","tag_inferred":false,"title":"The Treasury General Account and the Fed’s Balance Sheet","url":"https://ideas.repec.org/p/fip/fedpwp/103953.html"},{"abstract":"From early 2021 through early 2024, the U.S. experienced an unprecedented boom in unauthorized immigration, with substantial heterogeneity across local economies. Using administrative microdata, we construct new measures of national and local unauthorized immigration flows and exploit exogenous variation using multiple empirical designs. Unauthorized immigrant worker flows increased local employment approximately one-for-one, with mixed evidence of wage depression. They also raised house prices and rents without expanding housing supply. Finally, these flows reduced labor income per capita and government transfers. These findings help inform debates surrounding how unauthorized immigration impacts labor and housing markets and public finances in the U.S.","also_at":[],"analysis":null,"authors":["Daniel J. Wilson","Xiaoqing Zhou"],"date":"2026-10-15","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"c2ba2bac416a7f64","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Quantifies unauthorized immigration effects on US labor and housing markets, relevant for policy debate.","screening_tag":"DM","selected_in":[],"source":"fed-san-francisco","source_name":"Federal Reserve Bank of San Francisco","tag":"DM","tag_inferred":false,"title":"The Impacts of Unauthorized Immigration on U.S. Labor and Housing Markets: New Evidence from Administrative Microdata","url":"https://ideas.repec.org/p/fip/fedfwp/103940.html"},{"abstract":"Holding limits are a central design feature of proposed retail central bank digital currencies (CBDC). While such limits mechanically prevent individuals from exceeding a maximum balance, they may also generate behavioral responses whose directions are a priori unclear. We conducted an incentivized online experiment with participants from four euro-area countries, exogenously varying the presence and level of a holding limit to causally separate direct mechanical effects from behavioral effects. We find that behavioral responses increase holdings of the means of payment subject to the holding limit, consistent with an attraction effect. This effect is material only when the limit is high enough. Enabling reverse waterfall —automatic conversion into this limited means of payment— increases adoption while reducing holdings. These results suggest that combining holding limits with automatic funding mechanisms can support CBDC use while containing holdings, thereby helping to mitigate potential financial stability risks.","also_at":[],"analysis":null,"authors":[],"date":"2026-10-15","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"265d17c78f892c28","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Experimental evidence on CBDC holding limits informs design and financial-stability considerations.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"When less is more: behavioral effects of CBDC holding limits","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3300~0277bae3af.en.pdf"},{"abstract":"We study how frictions impact haircut setting in repo markets. Using transaction-level supervisory data and exploiting the 2021 introduction of the binding leverage ratio requirement, we show that three frictions jointly shape haircuts in the bilateral dealer-to-client segment: dealer balance sheet constraints, collateral convenience yields, and client outside options. In collateral-driven repos, binding leverage constraints and broader client outside options both raise haircuts, while higher convenience yields push them down. In funding-driven trades, the leverage constraint has no effect, higher convenience yields raise haircuts through the rehypothecation channel, and broader client outside options lower them. We rationalise these patterns in a bilateral bargaining model with periodic haircut renegotiation. Consistent with the model, constrained dealers exhibit higher repo-rate volatility and weaker pass-through of ECB policy rate changes in the collateral-driven segment. Post-crisis bank regulation thus carries potential unintended consequences for repo market functioning and the transmission of monetary policy.","also_at":[],"analysis":null,"authors":[],"date":"2026-10-15","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"1b2a98bd0080fdd1","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Analyzes repo haircuts and ECB rate pass-through, impacting monetary-policy transmission.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Stop believing in haircuts - at least the way you think about them","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3301~1585c96063.en.pdf"},{"abstract":"How does heterogeneity in banks’ interest-rate risk exposure shape monetary policy transmission? We develop a quantitative macroeconomic model of heterogeneous banks to answer this question. We establish an irrelevance result: differences in interest-rate risk exposure between fixed- and variable-rate banking systems matter for transmission only when bank solvency concerns become relevant. Calibrating the model to the euro area, we show that idiosyncratic default risk pushes a substantial share of banks toward the solvency threshold, making heterogeneity quantitatively important. When policy rates rise, fixed-rate banks suffer net interest margin compression—funding costs increase while legacy loan income stays unchanged—eroding capital and triggering sharper deleveraging. The lending elasticity to monetary policy is one-third larger in fixed-rate economies. The effects extend to financial stability: tightening raises bank failure rates in fixed-rate systems while lowering them in variable-rate systems. The results provide a rationale for macroprudential and monetary policy coordination and for monetary policy gradualism.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"Calibrating the model to the euro area","flags":[],"in_issue":true,"rationale":"The abstract calibrates the model to the euro area, an advanced economy region.","relevance_note":"Policymakers and market participants should note that monetary tightening can affect bank stability differently depending on the prevalence of fixed-rate lending, influencing both credit supply and systemic risk.","summary":"The paper builds a macro model of heterogeneous banks and finds that differences in interest-rate risk exposure matter for monetary transmission only when bank solvency concerns become relevant. Calibrated to the euro area, the lending elasticity to monetary policy is one-third larger in fixed-rate than in variable-rate economies, and tightening raises bank failure rates in fixed-rate systems but lowers them in variable-rate systems.","takeaways":["The lending elasticity to monetary policy is one-third larger in fixed-rate than in variable-rate economies.","Rising policy rates compress net interest margins of fixed-rate banks, eroding capital and triggering sharper deleveraging.","Tightening raises bank failure rates in fixed-rate systems but lowers them in variable-rate systems.","Idiosyncratic default risk pushes a substantial share of banks toward the solvency threshold, making heterogeneity important."],"wording_correction":{"checked":"2026-11-01","human_reviewed":true,"made_by":"Claude (AI assistant)","reason":"The model compared the elasticity of fixed-rate banks with variable-rate banks. The abstract compares fixed-rate with variable-rate economies (banking systems). The owner asked at review for the comparison with variable-rate economies to be explicit.","source":"Abstract of the ECB working paper"}},"authors":[],"date":"2026-10-14","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"b5341e8f2fbe0fe0","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Shows how bank heterogeneity alters monetary transmission and financial stability, directly relevant to policy and markets.","screening_tag":"DM","selected_in":["2026-10"],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"The heterogeneous bank lending channel of monetary policy","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3299~01776adb36.en.pdf"},{"abstract":"The fiscal transfers deployed during the COVID-19 pandemic were unprecedented in scale and strongly progressive. Using CPS/ASEC data, we document that the decline in employment during the pandemic was larger for low-income households and tightly linked to the intensity of transfer receipt, a pattern absent during the Global Financial Crisis. We develop and estimate a two-sector, heterogeneous-household general equilibrium model in which low-income households are borrowing-constrained in normal times but can save out of sufficiently large transfers. Because preferences permit wealth effects on labor supply, transfers both reduce labor supply and raise consumption, and a dollar of transfers is split roughly evenly between the two margins. We find that the effects of transfers are state-dependent: because the borrowing constraint binds more tightly in a deeper recession, the same transfer relaxes a tighter constraint and delivers an employment and consumption response about 40 to 50 percent larger during the pandemic than when the same transfer is introduced in the steady state. In the model, transfers were welfare-improving for recipients, with gains diminishing as transfers increase.","also_at":[],"analysis":null,"authors":["Isabel Cairó","Shigeru Fujita","Camilo Morales-Jimenez"],"date":"2026-10-14","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"9fad474ca577e2f5","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Analyzes labor-supply response to large fiscal transfers, informing fiscal-policy impact assessments.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":true,"title":"A Macroeconomic Analysis of Household Labor Supply Responses to Large Fiscal Transfers","url":"https://www.federalreserve.gov/econres/feds/a-macroeconomic-analysis-of-household-labor-supply-responses-to-large-fiscal-transfers.htm"},{"abstract":"Using a five-year survey of over 170,000 US consumers, we provide a novel direct measure of attention to monetary policy and show that the data strongly support the predictions of a rational inattention model. First, attention is incentive-driven: consumers with \"skin in the game\"—those planning major purchases like homes or cars—are significantly more attentive to monetary policy news. Second, attention varies systematically with interest rate volatility and news supply, exhibiting cyclical patterns around FOMC meetings. Third, marginal effects of volatility and news supply decline with \"skin in the game,\" implying external factors primarily affect low-skin-in-the-game consumers. These findings imply that, when communication is costly and attention is endogenous, optimal central bank communications in our model target consumers who bear the largest welfare losses from information frictions. This targeted communication approach increases aggregate attention to monetary policy, leading to an amplified response of consumption to interest rate changes.","also_at":[],"analysis":null,"authors":["Ina Hajdini","Edward S. Knotek","James Mitchell","Mathieu Pedemonte","Taylor Shiroff"],"date":"2026-10-14","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"945153475a220621","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Shows how consumer attention to US monetary policy varies, affecting communication effectiveness.","screening_tag":"DM","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"DM","tag_inferred":false,"title":"Consumers' Attention to Monetary Policy: The Importance of Having \"Skin in the Game\"","url":"https://ideas.repec.org/p/fip/fedcwq/103975.html"},{"abstract":"We introduce a novel measure of how European Central Bank (ECB) monetary policy is interpreted by analysts at major investment banks. We construct a “policy interpretation shock” based on the language used in analysts’ reports covering monetary policy decisions by the ECB’s Governing Council (GovC). The main identifying assumption is that changes in the way analysts report on policy communication by the GovC—that is, the change in the policy tone from the preview report to the recap report—reflect unexpected information revealed by the policy event. Using GPT-based sentiment extraction, we show that the tone in these reports closely tracks that of the GovC, often even anticipating shifts in tone. Changes in the policy tone before and after meetings capture how market intermediaries interpret and adjust their assessment of policy decisions. These interpretation shocks are followed by contractionary macroeconomic responses and systematic movements in financial-market prices. These findings underscore the important role of communication in shaping expectations and influencing economic outcomes.","also_at":[],"analysis":null,"authors":[],"date":"2026-10-14","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"2656cb6327e1bd2d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Links analysts' policy-interpretation shocks to macro outcomes and financial-market moves.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"What analysts hear and why it matters for monetary policy","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3298~06485c09a7.en.pdf"},{"abstract":"This paper studies the local and aggregate effects of cash transfers in developing countries, and how both change as the cash transfer program scales up. We build a two-region New Keynesian small open economy model and calibrate it to rich pre-treatment microdata from an ongoing cash transfer experiment in Malawi. The model implies a local multiplier on temporary transfers of about one, which depends on price stickiness, the share of liquidity-constrained households, and home bias in consumption. Spillovers to the rest of the country are negative under Malawi’s restricted international capital mobility and parallel exchange rate regimes, as cash transfers appreciate the real exchange rate and reduce exports. Consequently, the aggregate multiplier is less than the local multiplier. As the program scales up, the local multiplier converges toward the aggregate multiplier, so a scaled-up program may have smaller multipliers than micro-level estimates suggest. However, with unrestricted capital mobility, spillovers can be positive, especially under a fixed exchange rate. These results highlight the importance of the macroeconomic policy environment for aggregate multipliers and the effects of scaled-up transfer programs.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"cash transfer experiment in Malawi","flags":[],"in_issue":false,"rationale":"The abstract explicitly studies a cash-transfer experiment in Malawi, a developing-country economy.","relevance_note":"Understanding how cash-transfer programs affect overall demand and exchange rates helps policymakers gauge fiscal stimulus effectiveness in developing economies.","summary":"The paper builds a two-region New Keynesian small open economy model calibrated to microdata from a cash-transfer experiment in Malawi and examines how local and aggregate multipliers change as the program expands. It finds a local multiplier around one, but spillovers can be negative under restricted capital mobility, making the aggregate multiplier smaller; with unrestricted mobility spillovers may turn positive.","takeaways":["Local multiplier on temporary transfers is about one, driven by price stickiness, liquidity-constrained households, and home-bias consumption","Restricted capital mobility and parallel exchange-rate regimes cause negative spillovers, reducing the aggregate multiplier","When the program scales up, the local multiplier converges to the lower aggregate multiplier","Unrestricted capital mobility or a fixed exchange rate can generate positive spillovers"],"wording_correction":null},"authors":["Arthur Mendes","Wataru Miyamoto","Thuy Lan Nguyen","Steven Pennings"],"date":"2026-10-13","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"fbcf35677a776cb1","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Evaluates cash-transfer multipliers in Malawi, highlighting macro effects and exchange-rate implications for emerging markets.","screening_tag":"EM","selected_in":[],"source":"fed-san-francisco","source_name":"Federal Reserve Bank of San Francisco","tag":"EM","tag_inferred":false,"title":"Cash Transfers in Developing Countries: Local Multipliers, Aggregate Effects, and External Adjustment","url":"https://ideas.repec.org/p/fip/fedfwp/103935.html"},{"abstract":"How do high public debt and fiscal uncertainty interact to shape inflation? We develop a model in which firms face uncertainty about both marginal costs and fiscal policy and choose how much information to acquire before setting prices. Higher debt raises steady-state taxes, affecting attention through two opposing forces. While these taxes reduce the profit stakes of mispricing, they make desired prices more sensitive to tax fluctuations, increasing the value of information. The interaction generates a U-shaped relationship between public debt and attention, and therefore between debt and inflation volatility. Using euro-area firm-level expectations data, we document that the passthrough of expected input-cost growth into expected selling-price growth rises systematically with a country's debt-to-GDP ratio, consistent with the model. In the calibrated general-equilibrium model, an increase in debt from 100% to 175% of GDP raises inflation volatility by about 20%, mainly because firms reallocate attention toward fiscal shocks.","also_at":[],"analysis":null,"authors":["Oliver Pfäuti","Edson Wu"],"date":"2026-10-13","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"d4f1c5044383c43b","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Explores debt-driven inflation volatility via firm attention, informing inflation outlook and policy.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":false,"title":"Inattentive Price Setting and Inflation Under Fiscal Policy Uncertainty","url":"https://www.federalreserve.gov/econres/feds/inattentive-price-setting-and-inflation-under-fiscal-policy-uncertainty.htm"},{"abstract":"This paper develops a framework that allows researchers to describe a wide class of quasi-experimental treatment effect estimates using direct analogs of the features that make a randomized controlled trial transparent. The outcome weight measures how much each observation’s outcome contributes to an estimate, and its sign defines effective treatment and control groups. We show that estimates take a Wald form, equal to the weighted outcome difference between these groups divided by an effective first stage that quantifies the identifying treatment contrast. Our framework also allows researchers to assess covariate balance, examine how differences throughout the outcome distribution contribute to mean impacts, and identify influential observations. The treatment effect weight — the outcome weight times treatment — instead measures how much each observation’s unobserved treatment effect contributes to an estimate and exactly decomposes an estimate into subgroup-specific components. When the implied weighting of an estimate is undesirable, we show how to construct alternative estimates that satisfy researcher-specified criteria. We illustrate the framework with published analyses of democracy and growth, Chinese import competition, and returns to schooling.","also_at":[],"analysis":null,"authors":["Bryan Stuart","Evan Taylor"],"date":"2026-10-13","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"a360eb0d11bbbfd6","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"This is a methodological paper proposing a framework for transparent quasi-experimental research, which is useful for academic rigor but lacks direct market implications.","screening_tag":"Transversal","selected_in":[],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"Transversal","tag_inferred":false,"title":"A Unified Framework for Transparent Quasi-Experimental Research","url":"https://ideas.repec.org/p/fip/fedpwp/103922.html"},{"abstract":"This paper examines how the maturity structure of sovereign debt shapes fiscal–monetary interactions in the United States. Using exogenous monetary policy shocks and nonlinear local projections, we show that debt maturity influences both the fiscal consequences of monetary tightening and its macroeconomic transmission. When the government relies more heavily on short-term debt, contractionary monetary policy shocks lead to large and persistent increases in public debt, more pronounced deteriorations in fiscal and financial conditions, and significantly larger declines in output, inflation, and private investment. These effects are substantially attenuated when debt maturity is longer. We rationalize the findings with a model in which a constrained intermediary holds both private credit and long-duration government debt and carries its bond portfolio at amortized cost. The intermediary’s opportunity cost of lending therefore depends in part on the yield locked in when the bonds were acquired, rather than solely on their one-period holding return, allowing sovereign debt maturity to directly influence the price of private credit.","also_at":[],"analysis":null,"authors":["Luca Bettarelli","Francesco Frangiamore","Davide Furceri","Anh D. M. Nguyen","Francesco Scianna"],"date":"2026-10-13","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"9fb90c0368d50466","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Analyzes sovereign debt maturity effects on fiscal-monetary transmission, important for bond markets and policy.","screening_tag":"DM","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"DM","tag_inferred":false,"title":"Fiscal-Monetary Interactions: The Role of Debt Maturity","url":"https://ideas.repec.org/p/imf/imfwpa/2026-219.html"},{"abstract":"Motivated by behavioral evidence, we develop a tractable method for incorporating competition neglect into a general equilibrium firm investment problem. Competition neglect causes firms to systematically underestimate the investment of their competitors. When we introduce competition neglect into a canonical RBC model, this friction acts like an investment wedge that causes over-investment at first, and under-investment later on. In contrast to a model with exogenous investment shocks, these dynamics are accompanied by a realistic variation in equity premia, even in the absence of financial frictions. Investment booms raise stock prices in general equilibrium, predicting periods of low excess returns going forward. The model can generate realistic comovement of real and financial variables.","also_at":[],"analysis":null,"authors":["Jean-Paul L'Huillier","Pierlauro Lopez","Sanjay R. Singh"],"date":"2026-10-13","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"1ca6edbd044e5a2a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Links behavioral investment bias to equity premia and real-financial comovement, relevant for asset-pricing views.","screening_tag":"Transversal","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"Transversal","tag_inferred":false,"title":"A Behavioral Foundation for the Investment Wedge","url":"https://ideas.repec.org/p/fip/fedcwq/103974.html"},{"abstract":"Despite their potentially major impacts, little is known about how El Niño impact the U.S. economy. El Niños are distinct from other commonly studied weather shocks because they are a global phenomenon, unfold over a period of months, can be forecast months in advance, are relatively infrequent, and have very different effects on weather outcomes depending on the time of year and region. These features make traditional analytical methods ill-suited to studying the economic impacts of El Niño events. In this paper I use a new approach to estimating the impulse response functions of El Niños. I find that El Niños pose material upside risk for PCE prices and employment. The longer-run price effects are driven by core services and food prices and depend on whether La Niñas follow El Niños, a very common occurrence. After modest offsetting initial effects, employment increases are widespread in terms of both sectors and states in the year following the El Niño. These results indicate El Niños can have material impacts on the US economy even though it is neither tropical nor agriculturally focused.","also_at":[],"analysis":null,"authors":["Brigitte Roth Tran"],"date":"2026-10-13","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"07765b6bdef5b83f","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Quantifies El Niño’s impact on US inflation and employment, offering macro insights for market forecasts.","screening_tag":"DM","selected_in":[],"source":"fed-san-francisco","source_name":"Federal Reserve Bank of San Francisco","tag":"DM","tag_inferred":false,"title":"In Hot Water? The Macroeconomic Impacts of El Niño","url":"https://ideas.repec.org/p/fip/fedfwp/103934.html"},{"abstract":"Fiscal integration in a currency union is generally understood as a transfer from fiscally strong to fiscally weak countries. I show that this changes when common debt is paired with a non-defaultable common tax, even if national debt remains defaultable. The risky country gains from intertemporal trade: it receives a grant financed by a perpetual obligation it discounts more heavily than lenders do. The cost to the safe member is second-order and the tax removes it by insuring imperfectly correlated cycles rather than transferring resources in expectation. The calibration delivers a narrow Pareto-improving region: the tax that eliminates the risky country’s perverse incentive to default is negligible, while the tax that compensates the safe country is an order of magnitude larger. Joint spending on a public good expands the region and reverses that ordering: the safe country gains even before the common budget balances.","also_at":[],"analysis":null,"authors":[],"date":"2026-10-12","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"f5ab4029319a21bc","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Shows fiscal integration can be Pareto-improving, relevant for sovereign risk and currency-union policy.","screening_tag":"Transversal","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"Transversal","tag_inferred":false,"title":"Fiscal integration as a Pareto improvement","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3297~601502aed4.en.pdf"},{"abstract":"Abstract We study how online job search advice affects job search behaviour and labour market outcomes of unemployed workers. In a large-scale field experiment embedded in the online platform of the Danish public employment service, we provide job seekers with vacancy information and occupational recommendations. Using a two-stage randomized design with regionally varying treatment intensities, we examine both direct effects of advice and treatment spillovers. We find that advice significantly increases employment and earnings when provided to a limited share of job seekers. As treatment intensity rises, these effects diminish and eventually disappear. The decline is driven by negative spillovers among treated job seekers, consistent with increased congestion in the occupations towards which job seekers redirect their search. Spillover effects on untreated job seekers are heterogeneous and depend on how advice alters occupation-specific competition in local labour markets.","also_at":[],"analysis":null,"authors":["Steffen Altmann","Anita M. Glenny","Robert Mahlstedt","Alexander Sebald"],"date":"2026-10-12","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/restud/rdag112","doi_registered":"2026-10-09","flags":[],"group":"journal","id":"de10cd8bd1525ed7","issue_date":null,"kind":"journal","publication_month":"2026-10","relevance":4,"screen_reason":"Examines online job-search advice effects on employment, modest macro-labor relevance.","screening_tag":"DM","selected_in":[],"source":"restud","source_name":"Review of Economic Studies","tag":"DM","tag_inferred":false,"title":"The Direct and Indirect Effects of Online Job Search Advice","url":"https://doi.org/10.1093/restud/rdag112"},{"abstract":"This paper proposes a new high-frequency structural vector autoregression model that can disentangle the drivers of oil and natural gas prices in real time. In particular, it separately identifies actual supply disruptions from geopolitical-risk shocks that raise expectations of future supply shortfalls. Local projection analysis shows that macroeconomic effects differ across shocks. Oil supply shocks significantly affect aggregate prices and unemployment, usual central banks' policy targets, whereas geopolitical supply risk shocks have only short-lived effects on prices and no effect on unemployment. All gas shocks generate persistent effects on the price level, but muted effects on unemployment. Historical price decompositions using the high-frequency model during the Russia-Ukraine war and the 2026 Middle East war show that energy prices rise due to geopolitical risk before supply disruptions materialize. Even after disruptions occur, fears of additional shortages continue to exert upward pressure on prices. These findings highlight the importance for policymakers to distinguish realized supply disruptions from geopolitical supply risk shocks.","also_at":[],"analysis":null,"authors":["Patricia Gomez-Gonzalez","Régis Kouassi","Jianhong Liu","Joseph M Moussa","Jean-Marc Natal","Andrea Paloschi","Evgenia Weaver"],"date":"2026-10-12","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"c104e606d0c58a11","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Distinguishes geopolitical risk from supply shocks in energy markets, crucial for price and policy analysis.","screening_tag":"Transversal","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"Transversal","tag_inferred":false,"title":"Fear and Shortages: Identifying Geopolitical Risk and Supply Disruptions in Energy Markets","url":"https://ideas.repec.org/p/imf/imfwpa/2026-218.html"},{"abstract":"Abstract Quality regulation seeks to ensure quality and foster competition by reducing vertical differentiation, but it may also have adverse effects on market structure. We study this trade-off in the context of pharmaceutical bioequivalence, which is the primary quality standard for generic drugs. By exploiting the introduction of bioequivalence in Chile, we find that stronger regulation reduced the number of drugs in the market by 18% and increased average paid prices by 13%. We estimate a model of drug entry, certification, and demand to study how drug quality, aversion to generics, and certification costs shape the equilibrium effects of quality regulation. We find that quality regulation increased demand for generic drugs by resolving asymmetric information and reducing aversion to unbranded generics, which induced the entry of high-quality drugs in place of low-quality drugs. Consumer welfare increased despite higher prices and a lower number of firms. We compare minimum quality standards with alternative designs of quality regulation, including quality disclosure.","also_at":[],"analysis":null,"authors":["Juan Pablo Atal","José Ignacio Cuesta","Morten Sæthre"],"date":"2026-10-10","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/restud/rdag113","doi_registered":"2026-10-09","flags":[],"group":"journal","id":"62d0636e08e3ea42","issue_date":null,"kind":"journal","publication_month":"2026-10","relevance":6,"screen_reason":"Evaluates pharma quality regulation in Chile, informing emerging-market competition and price dynamics.","screening_tag":"EM","selected_in":[],"source":"restud","source_name":"Review of Economic Studies","tag":"EM","tag_inferred":false,"title":"Quality Regulation and Competition: Evidence from Pharmaceutical Markets","url":"https://doi.org/10.1093/restud/rdag113"},{"abstract":"This paper studies how entrepreneurs sort into founding teams and how team composition shapes the firm distribution. We develop a theory of career choice and team formation in which skill complementarities make team entrepreneurship attractive for agents with unbalanced skill profiles, while talent similarity makes teaming preferable to other career options. Using matched employer-employee and balance-sheet data from Portugal, we show that teams combining similar talent with diverse specializations create larger, more productive, and longer-lived firms; yet founders with dissimilar skills are less likely to start firms together. We calibrate the model to reproduce these patterns and use it to quantify the cost of imperfect founder matching. Counterfactuals show that reducing founders’ biased exposure reallocates activity from low-productivity solo firms toward more productive teams. An optimal-assignment benchmark reveals that even unbiased random search leaves substantial gains unrealized because high-surplus matches fail to form.","also_at":[],"analysis":null,"authors":["Edoardo M Accabi","Andrea Alati","Luca Mazzone","Marta Morazzoni"],"date":"2026-10-09","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"d141a91c92d12b46","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"The paper studies entrepreneurial team formation and firm productivity in Portugal, which is of limited relevance to macro-level market analysis.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":false,"title":"Sorting into entrepreneurial teams","url":"https://ideas.repec.org/p/boe/boeewp/023785.html"},{"abstract":"How should monetary policy respond to climate policy shocks? We develop an Environmental New-Keynesian model with green and fossil energy to assess the macroeconomic impacts of carbon pricing and green subsidy shocks and to identify the optimal monetary policy responses. Our findings indicate that these shocks create a policy trade-off between stabilizing inflation and the output gap. This trade-off is resolved in favor of output-gap stabilization, with optimal monetary policy focusing on dampening real output fluctuations while temporarily looking through inflation movements. Dual mandate Taylor rules yield lower welfare costs than inflation-only targeting rules and align the welfare performances of core and headline inflation targeting regimes.","also_at":["https://ideas.repec.org/p/zbw/bubdps/344219.html"],"analysis":null,"authors":["Marco Carli","Francesca Diluiso","Mathias Hoffmann"],"date":"2026-10-09","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"5e4fe65fe8ac67e7","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Analyzes optimal monetary response to climate policy shocks, directly relevant to policy and market outlooks.","screening_tag":"Transversal","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"Transversal","tag_inferred":false,"title":"Navigating climate policy shocks: optimal monetary policy responses","url":"https://ideas.repec.org/p/boe/boeewp/023787.html"},{"abstract":"UK insurance companies hold a large share of UK corporate bonds, while US insurers are also significant investors in dollar-denominated issues by UK firms. Using a unique security-level dataset combining UK and US regulatory transactions data, we study how UK and US monetary policy shocks affect the demand of life insurers for UK corporate bonds. Employing a panel local projections framework, we find that UK monetary tightening raises domestic insurer demand but reduces foreign demand, counteracting the overall demand impact. US monetary contractions generate similar asymmetries, increasing demand from UK insurers and decreasing it from US insurers. These patterns are consistent with differences in regulation, portfolio allocation incentives, and liability structures across UK and US insurers.","also_at":[],"analysis":null,"authors":["Marcel Brambeer","Michael Joyce","Alex Kontoghiorghes"],"date":"2026-10-09","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"48204d9f6efe1298","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"The paper examines how monetary policy shocks in the US and UK influence insurer demand for corporate bonds, providing insights into cross-border capital flows.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":false,"title":"Domestic and foreign insurer corporate bond demand and monetary policy","url":"https://ideas.repec.org/p/boe/boeewp/023786.html"},{"abstract":"CORRECT ORDER OF AUTHORS: van Rooij, Coibion, Georgarakos, Candia, Gorodnichenko. How does perceived relative income affect household behavior and well-being? We use a randomized information experiment in a representative panel of Dutch households to generate exogenous variation in beliefs about peers' income. Lower perceived relative standing shifts expenditure toward durable goods but we find little evidence of an increase in total spending. Higher perceived relative income increases socializing and substantially raises happiness, while lower relative income increases subsequent employment. Relative standing also shapes views about inequality and redistribution. A complementary vignette experiment provides supporting evidence on mechanisms. Overall, peer comparisons matter for behavior and well-being even when total spending responses are small.","also_at":[],"analysis":null,"authors":["Bernardo Candia","Olivier Coibion","Dimitris Georgarakos","Yuriy Gorodnichenko","Maarten van Rooij"],"date":"2026-10-09","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"2ce47ff3124d8208","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Shows peer income effects on spending and happiness, modest macro implications for consumption trends.","screening_tag":"DM","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"DM","tag_inferred":false,"title":"Keeping up with the Jansens: Causal Peer Effects on Household Spending, Beliefs and Happiness","url":"https://ideas.repec.org/p/fip/fedcwq/103918.html"},{"abstract":"The GENIUS Act of 2025 rewrites the priority and estate-property rules that govern the failure of a payment stablecoin issuer. It removes an issuer's required reserves from the bankruptcy estate and grants stablecoin holders a superpriority, capped at any reserve shortfall, over what remains. The commentary so far asks what happens inside bankruptcy once an issuer files—whether holders are actually paid and whether the case can be administered. This article identifies a different problem that arises before a filing. Because reserve assets leave the estate the moment they back a coin, a distressed firm can issue stablecoins to subordinate its existing creditors, hollow out the value a future administrator would need, and, when the firm is a bank, shift losses onto the deposit insurer and potentially the taxpayer. We call this stablecoin-on-creditor violence, drawing an analogy with the phenomenon of creditor-on-creditor violence that began with the 2016 J. Crew dropdown. Unlike in that episode, the stablecoin dropdown is on a statutory footing, meaning it is largely beyond the reach of the doctrines courts use to police its private-law cousins. We show that the subordination is accomplished by the rule carrying reserves out of the estate rather than by the celebrated superpriority. We raise concerns for financial stability: The threat of a dropdown grows with a firm's holdings of safe assets, meaning that creditors may respond negatively to a firm with a more liquid balance sheet. The harm is gravest when the subordinated creditor is the FDIC or another deposit insurer, because losses can be imposed on the rest of the financial system and the taxpayer. Importantly, the problems we raise do not rely on there being any investor demand for stablecoins. We close with a menu of responses and recommend a layered fix that federal regulators could largely implement on their own.","also_at":[],"analysis":{"correction":{"checked":"2026-11-01","human_reviewed":true,"made_by":"Claude (AI assistant)","original_tag":"Transversal","source":"Title and abstract of the Cleveland Fed working paper (the abstract names US institutions; no other text was needed). The model had tagged it Transversal on the ground that no economy is named. Reviewed and kept as DM by Mustafa Harun Sendur on 2026-11-02."},"current_prompt":true,"evidence":"The harm is gravest when the subordinated creditor is the FDIC or another deposit insurer","flags":[],"in_issue":false,"rationale":"The abstract concerns the GENIUS Act of 2025 and names the FDIC and federal regulators, so its focus is the United States, an advanced economy.","relevance_note":"Policy makers and market participants should note that the new bankruptcy treatment could increase systemic risk by allowing firms, including banks, to offload losses onto deposit insurers and taxpayers before bankruptcy.","summary":"The paper examines how the GENIUS Act changes payment stablecoin issuers' bankruptcy rules: required reserves leave the estate, while holders receive superpriority over the remaining estate, capped at any reserve shortfall. It identifies a pre-bankruptcy risk whereby distressed issuers can subordinate existing creditors by issuing stablecoins. When the issuer is a bank, losses may reach the deposit insurer and taxpayers.","takeaways":["Reserve assets exit the estate as soon as they back a stablecoin, creating a pre-bankruptcy subordination risk.","Stablecoin holders receive super-priority up to any reserve shortfall, limiting assets available to other creditors.","The statutory framework makes this creditor-on-creditor violence largely immune to traditional court doctrines."],"wording_correction":{"checked":"2026-11-02","human_reviewed":true,"made_by":"Mustafa Harun Sendur","reason":"The owner found the model's summary needed qualifying. The deposit-insurance loss channel concerns bank issuers, and the superpriority is over the remaining estate and capped at the reserve shortfall. The summary text is the owner's; the takeaways are the model's, unchanged.","source":"Abstract of the Cleveland Fed working paper"}},"authors":["Jeffery Y. Zhang","Peter Zimmerman"],"date":"2026-10-08","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"a02acb6d713a3cbf","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"The paper analyzes the systemic risks and creditor subordination issues posed by proposed stablecoin bankruptcy legislation, a critical topic for financial regulation.","screening_tag":"Transversal","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"DM","tag_inferred":false,"title":"Stablecoin-on-Creditor Violence","url":"https://ideas.repec.org/p/fip/fedcwq/103919.html"},{"abstract":"We study how monetary policy affects firm-level total factor productivity in the presence of financial frictions using a panel of Austrian non-financial firms. A dynamic firm model and causal empirical framework show that tighter monetary policy reduces productivity-enhancing investment and firm-level TFP. The effects are stronger for highly leveraged firms and are more pronounced for persistent changes in financing conditions than for transitory highfrequency policy surprises.","also_at":[],"analysis":null,"authors":["Karin Klieber","Michael Sigmund","Maria Teresa Valderrama"],"date":"2026-10-07","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"eebe7e5c468e2570","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Causal evidence on monetary policy’s effect on firm TFP with financial frictions, directly pertinent to policy impact assessments.","screening_tag":"DM","selected_in":[],"source":"oenb","source_name":"Oesterreichische Nationalbank","tag":"DM","tag_inferred":false,"title":"Monetary Policy and Firm-Level Productivity: Financial Frictions, Theory, and Causal Evidence","url":"https://ideas.repec.org/p/onb/oenbwp/284.html"},{"abstract":"This paper develops novel firm-level measures of shareholder geographical concentration and examines how elevated home bias in equity holdings affects investment resilience in the euro area. We combine security-level holdings data from the ECB’s Securities Holdings Statistics (SHS-S) with firm-level financial-statement data from Compustat, and document that equity ownership remains strongly concentrated domestically, with limited cross-border diversification within the monetary union. Using a difference-in-differences design around the COVID-19 shock, combined with a propensity score matching approach, we then analyse whether equity home bias shapes firms’ responses to macroeconomic disruptions. Against an average 16% decline in exports among the firms in the sectors most affected by the pandemic, those with more concentrated, home-biased shareholder bases reduced investment by 20% more than their more diversified peers after the shock. The effect operates mainly through weaker equity resilience, with equity declining by 13%, while sales and bank financing remain comparable. Our findings highlight the benefits of deeper cross-border equity integration for corporate resilience.","also_at":[],"analysis":null,"authors":[],"date":"2026-10-07","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"a3e4585e6f50ffb5","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Links shareholder home bias to investment resilience in euro area, relevant for corporate and policy analysis.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Does shareholder diversification enhance firm investment resilience? Evidence from the euro area","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3296~db309862b0.en.pdf"},{"abstract":"This paper compares equilibrium bidding strategies in a first-price sealed-bid auction with two asymmetric bidders who have dependent private valuations. Modeling bidder strength via a stochastic asymmetry condition – where one bidder is systematically more likely to hold the maximum valuation – I show that the globally weak bidder, facing a competitive disadvantage at all top valuation levels, bids more aggressively at every valuation. Conversely, the stronger bidder wins more frequently, generalizing Maskin and Riley (2000) to dependent private-value environments. When the stochastic asymmetry flips once, so that each bidder is stronger over a different range, the bid distributions cross once, with each bidder bidding more aggressively where their competitive disadvantage is most acute. In both environments, allocative inefficiency is an inherent feature of the equilibrium, driven by the stronger bidder's heightened incentives to shade bids relative to their valuation. The results translate to procurement auctions and wage competition between employers, and extend to interdependent-value auctions and the war of attrition under modified conditions.","also_at":[],"analysis":null,"authors":["Barış Kaymak"],"date":"2026-10-07","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"64b708cbcbbbed25","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"This is a theoretical study on bidding strategies in auctions with asymmetric bidders, offering no direct application to current macro or market conditions.","screening_tag":"Transversal","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"Transversal","tag_inferred":false,"title":"Aggression of the Weak","url":"https://ideas.repec.org/p/fip/fedcwq/103917.html"},{"abstract":"This paper studies how households react when property prices change. Using a randomised survey experiment in Austria, it shows that lower prices raise renters’ willingness to buy and higher prices raise owners’ willingness to sell. A dynamic model for renters helps explain these choices: the bigger the gap between a renter’s reservation price and the offered price, the more likely the offer is accepted. Overall, willingness to transact remains limited.","also_at":[],"analysis":null,"authors":["Peter Lindner","Thomas Y. Mathä","Maximilian Propst","Giuseppe Pulina","Michael Ziegelmeyer"],"date":"2026-10-07","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"632b8dc114b92948","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Randomised price experiment on housing tenure informs demand elasticity, modest macro housing insights.","screening_tag":"DM","selected_in":[],"source":"oenb","source_name":"Oesterreichische Nationalbank","tag":"DM","tag_inferred":false,"title":"A Decision of a Lifetime: Housing Tenure Choice under Randomised Prices","url":"https://ideas.repec.org/p/onb/oenbwp/283.html"},{"abstract":"This paper traces how dynamic stochastic general equilibrium (DSGE) models became a central tool for quantitative policy analysis in Central Banks. Their appeal grew out of the shortcomings of large-scale macroeconometric models, the Lucas and Sims critiques, and the gradual shift from real-business-cycle theory to the New Keynesian framework. The paper reviews the medium-scale DSGE model that became standard in policy institutions, as well as extensions dealing with unemployment, open-economy transmission, financial frictions, and fiscal policy. It also discusses the practical machinery (solution, estimation, forecasting, and counterfactual analysis) through which these models are brought to the data and used in policy work. The final part turns to heterogeneous-agent New Keynesian models (HANK), where incomplete markets and distributional heterogeneity reshape the transmission of monetary and fiscal policy. The central claim is that DSGE models remain valuable less as definitive descriptions of the economy than as a disciplined way to connect theory, data, and policy experiments, while identifying where richer mechanisms are needed.","also_at":[],"analysis":null,"authors":["Christophe Cahn","Patrick Fève","Julien Matheron"],"date":"2026-10-07","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"4cb9659ff9fe0d8d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Reviews DSGE use in central banks, informing policymakers on model strengths and limitations.","screening_tag":"DM","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"DM","tag_inferred":true,"title":"DSGE Models in Central Banks: Progress and Prospects","url":"https://ideas.repec.org/p/bfr/banfra/1066.html"},{"abstract":"We introduce two indicators to track the build-up of vulnerabilities in the euro area banking sector on a quarterly basis by leveraging the information collected in EU-wide solvency stress tests. First, we introduce an indicator of conditional capital depletion, the Stress Vulnerability Index (SVI), which quantifies potential losses under adverse scenarios when tail credit risk is highest. Second, we introduce an indicator of earnings vulnerability, the Profitability Vulnerability Index (PVI), which assesses the capacity of the banking sector to generate capital organically. While the two indices spike synchronously during systemic crises, they can also decouple. We show that this occurs when tail risks to capital subside but earnings remain compressed, or conversely, when recessionary fears mount while current profitability strengthens. These divergences provide actionable signals for macroprudential policy by distinguishing between the accumulation of solvency risks and the impairment of loss absorption capacity. In doing so, the indices support decisions on the activation, build-up, stability or release of prudential buffers. We validate the usefulness of the indicators by showing that both indicators were strongly associated with the probability that euro area banks received state aid in the aftermath of the Great Financial Crisis.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"euro area banking sector","flags":[],"in_issue":false,"rationale":"The abstract references the euro area banking sector and EU-wide stress tests, which are specific to a developed economy region.","relevance_note":"Policymakers and market participants can use these indices to detect early signs of solvency stress or earnings weakness, aiding decisions on capital buffers and risk assessment in the euro-area banking system.","summary":"The paper proposes two quarterly indicators—the Stress Vulnerability Index (SVI) and the Profitability Vulnerability Index (PVI)—to monitor solvency and earnings risks in the euro-area banking sector using EU stress-test data. It shows that the indices move together during crises but can diverge, signalling different underlying risk dynamics, and argues they can guide macroprudential buffer decisions.","takeaways":["SVI measures potential capital losses under adverse tail-credit scenarios.","PVI gauges the banking sector’s ability to generate capital organically.","Both indices spike together in systemic crises but may decouple when tail risks fall or earnings stay weak.","Divergences between SVI and PVI can inform activation or release of prudential buffers."],"wording_correction":null},"authors":[],"date":"2026-10-07","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"47bfed8194b84e90","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Introduces banking vulnerability indices for euro area, offering actionable macroprudential signals.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Monitoring banks’ vulnerabilities using stressed depletion indices","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3295~5961ce0e96.en.pdf"},{"abstract":"Abstract To study competition, innovation, and industry dynamics that arise as a result of their interaction, we develop a new oligopolistic general-equilibrium Schumpeterian growth model. This model ties together the endogenous growth, oligopolistic competition, and dynamic industrial organization literatures in a single unified framework. Within each industry, there are an endogenously determined number of large firms (“superstars”) that compete à la Cournot and a continuum of small firms which collectively constitute a competitive fringe. Firms dynamically choose their innovation strategies, cognizant of other firms’ choices, and their entry and exit are endogenous. The model is consistent with the macroeconomic trends observed in the US since the 1970s, such as the domination of industries by a small number of superstar firms, the rise of markups, market concentration, profits, and R&D spending, and the decline in business dynamism, productivity growth, and the labour share. It replicates the empirical relationship between innovation and competition within and across industries. As an application, we estimate the model to disentangle the effects of separate mechanisms on the structural transition observed in the US, which yields striking results: (1) While the increase in the average markup causes a significant static welfare loss, this loss is overshadowed by the dynamic welfare gains from increased innovation in response to higher profit opportunities. (2) The increasing costs of innovation are found to be the primary determinant of lacklustre productivity growth, i.e. ideas are getting harder to find.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"consistent with the macroeconomic trends observed in the US since the 1970s","flags":[],"in_issue":true,"rationale":"The abstract references macroeconomic trends observed in the US.","relevance_note":"Understanding how competition and innovation jointly shape markups and industry concentration helps policymakers assess the impact of market power on productivity and labor outcomes.","summary":"The paper develops an oligopolistic general-equilibrium Schumpeterian growth model in which an endogenous number of large “superstar” firms compete with a competitive fringe of small firms and choose their innovation strategies. The model is consistent with US macroeconomic trends since the 1970s and, once estimated, it finds that the static welfare loss from a higher average markup is overshadowed by the dynamic welfare gains from increased innovation, and that increasing innovation costs are the primary determinant of lacklustre productivity growth.","takeaways":["The model is consistent with US trends since the 1970s: rising markups, market concentration, profits and R&D spending, and falling business dynamism, productivity growth and labour share.","In the estimated model, the increase in the average markup causes a significant static welfare loss, which is overshadowed by the dynamic welfare gains from increased innovation.","In the estimated model, the increasing costs of innovation are found to be the primary determinant of lacklustre productivity growth: ideas are getting harder to find.","Large “superstar” firms compete à la Cournot alongside a competitive fringe, and the number of large firms in each industry is determined endogenously."],"wording_correction":{"checked":"2026-11-03","human_reviewed":true,"made_by":"Claude (AI assistant)","reason":"The model's write-up described only the model's set-up and its match with US trends, and left out the findings the abstract reports from estimating it (the static welfare loss from higher markups is overshadowed by dynamic gains from innovation; rising innovation costs are the primary determinant of weak productivity growth).","source":"Abstract of the Review of Economic Studies article"}},"authors":["Laurent Cavenaile","Murat Alp Celik","Xu Tian"],"date":"2026-10-07","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/restud/rdag110","doi_registered":"2026-10-06","flags":[],"group":"journal","id":"14b1da5f487c22bb","issue_date":null,"kind":"journal","publication_month":"2026-10","relevance":8,"screen_reason":"Links US markup rise and competition to macro trends, informing market concentration and productivity outlook.","screening_tag":"DM","selected_in":["2026-10"],"source":"restud","source_name":"Review of Economic Studies","tag":"DM","tag_inferred":false,"title":"Are Markups Too High? Competition, Strategic Innovation, and Industry Dynamics","url":"https://doi.org/10.1093/restud/rdag110"},{"abstract":"We construct city-level measures of freeway disamenities and examine their association with metropolitan growth. We combine neighborhood-level estimates from Brinkman and Lin (2024) with calibrated spatial models for U.S. metropolitan areas. Each city measure is based on a counterfactual that removes estimated disamenities while holding modeled travel times fixed. Cities with larger estimated disamenities grew more slowly, conditioned on total freeway mileage and initial population. Total freeway mileage is positively associated with growth in the same specification. Estimated disamenities are larger in cities with greater 1950 populations, more centralized freeway networks, and coastal geography. These patterns are consistent with local quality-of-life costs attenuating regional access related growth benefits.","also_at":[],"analysis":null,"authors":["Jeffrey Brinkman","Jeffrey Lin"],"date":"2026-10-06","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"dd6319f1bd33fd95","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"The paper examines the impact of urban infrastructure disamenities on city growth, which is of tangential interest for regional economic analysis.","screening_tag":"DM","selected_in":[],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"DM","tag_inferred":false,"title":"The Costs of Access: Freeway Disamenities Across U.S. Cities","url":"https://ideas.repec.org/p/fip/fedpwp/103888.html"},{"abstract":"Abstract When financial constraints bind, firms adjust employment in response to cash flow shocks. A 2010 revaluation of business rates, a U.K. tax levied on business-occupied properties, implied that similar firms, occupying similar properties in narrow geographical locations, experienced different tax changes. I find that, on average, for every £1 of additional cash flow triggered by the tax change, thirty-nine pence were spent on employment, with small and leveraged firms responding the most. I use these findings to discipline a general-equilibrium model with firm heterogeneity and financial frictions and quantitatively determine the aggregate effects of a fiscal transfer to firms.","also_at":[],"analysis":null,"authors":["Davide Melcangi"],"date":"2026-10-06","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/restud/rdag111","doi_registered":"2026-10-03","flags":[],"group":"journal","id":"bb8b73557980d9ed","issue_date":null,"kind":"journal","publication_month":"2026-10","relevance":6,"screen_reason":"Estimates firms' hiring response to cash-flow shocks in UK, informing fiscal-policy and labor-market effects.","screening_tag":"DM","selected_in":[],"source":"restud","source_name":"Review of Economic Studies","tag":"DM","tag_inferred":false,"title":"The Marginal Propensity to Hire","url":"https://doi.org/10.1093/restud/rdag111"},{"abstract":"In a widely cited working paper, Louie, Mondragon and Wieland (2025) find that higher income growth predicts the same growth in house prices, housing quantity and population regardless of a city's estimated housing supply elasticity, implying that constrained housing supply is relatively unimportant in explaining differences in rising house prices among U.S. cities. We show that their findings do not hold up—our evidence is that supply constraints do explain new housing supply and house prices across U.S. cities, in line with the literature. Inter alia, we model the effect of supply constraints on new housing supply (proxied by permits), exploiting the variation in annual data and controlling for other factors using year and MSA fixed effects.","also_at":[],"analysis":null,"authors":["Anthony Murphy","Maddie Shaheen"],"date":"2026-10-06","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"64f0e5888b35a658","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Provides evidence that housing supply constraints drive US city price dynamics, key for real-estate markets.","screening_tag":"DM","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"DM","tag_inferred":false,"title":"Supply Constraints Do Explain House Price and Quantity Growth Across U.S. Cities","url":"https://ideas.repec.org/p/fip/feddwp/103914.html"},{"abstract":"Using multiple randomized controlled trials (RCTs) implemented through surveys of US households, I show that household spending responses to exogenous changes in inflation expectations depend on the inflation environment. In times of low inflation, higher inflation expectations arising from information treatments lead households to reduce their consumption of durable goods (the negative income/uncertainty effect dominates). In contrast, in times of high inflation, I find a sharp positive effect on durable goods spending after an exogenous shock to inflation expectations (intertemporal substitution effect dominates).","also_at":[],"analysis":null,"authors":["Bernardo Candia"],"date":"2026-10-06","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"3b3069fa3fedd2ed","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Shows how inflation expectations affect US durable consumption, relevant for demand and policy impact.","screening_tag":"DM","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"DM","tag_inferred":false,"title":"Inflation Expectations and Household Spending: Different Patterns in Low- and High-Inflation Settings","url":"https://ideas.repec.org/p/fip/fedcwq/103916.html"},{"abstract":"This paper investigates the information content of the term structure of inflation risks and its usefulness for understanding inflation dynamics. Using prices of traded zero-coupon inflation caps and floors, we develop a robust non-parametric methodology, combined with a Student’s t-copula, to estimate spot and forward risk-neutral densities at short-, medium-, and long-term horizons, i.e., long-horizon risks are identified from liquid instruments alone, at daily frequency, without forward-starting contracts. Focusing on the euro area over 2009-2026, we show that the term structure of inflation risks provides valuable information about the persistence of inflation shocks and the degree to which changes in the inflation outlook become embedded at longer horizons. We also show that there is marked heterogeneity in the macroeconomic and financial conditions associated to inflation risks across horizons: short- and medium-term risks are mainly associated with current inflation, confidence indicators, commodity prices, and near-term macroeconomic risks, whereas long-term risks are more strongly related to monetary and financial conditions. These findings highlight the importance of analysing the entire term structure of inflation risks rather than relying on a single maturity.","also_at":[],"analysis":null,"authors":[],"date":"2026-10-05","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"e59d76b10302644a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Uses inflation-risk term structure to gauge euro-area inflation dynamics, valuable for policy and market forecasts.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Understanding inflation: insights from the term structure of inflation risks","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3294~343f6d6c31.en.pdf"},{"abstract":"Leveraging the unique setting of unilateral euroisation, this paper examines the spillover effects of euro area monetary policy on Montenegro and Kosovo. Through the lens of a structural VAR model with block exogeneity, it shows that euro area monetary policy shocks can significantly influence output and inflation in these economies, albeit with a delayed response, while contributing only modestly to their overall business cycle fluctuations.","also_at":[],"analysis":null,"authors":[],"date":"2026-10-05","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"13d5575d4f39d10c","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Analyzes euro-area policy spillovers to Montenegro/Kosovo, informing EM monetary transmission.","screening_tag":"EM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"EM","tag_inferred":false,"title":"ECB monetary policy transmission to unilaterally euroised economies","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3293~a7c6243bcc.en.pdf"},{"abstract":"External borrowing by governments is widely viewed as an important instrument for financing development, yet its growth effects remain controversial. We exploit the bilateral structure of public sector lending relationships to construct plausibly exogenous foreign credit supply shocks, isolating changes in borrowing capacity arising from creditorspecific shifts in lending rather than borrower demand. Using data covering 134 developing economies over 1970-2023, we show that positive foreign credit supply shocks lead to persistent increases in public investment and external indebtedness. However, easier access to external public sector finance does not, on average, generate sustained improvements in output or productivity and is accompanied by real exchange rate appreciation, weaker external balances, and partial crowding-out of private investment. The macroeconomic benefits of external public sector borrowing depend critically on institutional quality. Countries with stronger institutions translate additional borrowing into more favorable productivity and output responses, while accumulating more public capital and relying less on domestic financing. Our findings suggest that greater access to external finance is not, by itself, sufficient to boost development. The effectiveness of public sector borrowing depends fundamentally on the institutional capacity to allocate and manage borrowed resources productively.","also_at":[],"analysis":{"correction":{"checked":"2026-11-02","human_reviewed":true,"made_by":"Mustafa Harun Sendur","original_tag":"EM","source":"Title and abstract of the IMF working paper. The model's tag is unchanged; the rationale was reworded at the owner's review so that it does not imply every developing country is an emerging financial market."},"current_prompt":true,"evidence":"data covering 134 developing economies over 1970-2023","flags":[],"in_issue":true,"rationale":"The paper studies 134 developing economies, which fall within this project's EM/developing category (the IMF's emerging market and developing economies).","relevance_note":"Policymakers and market participants should note that external public borrowing may not automatically enhance growth and can affect exchange rates and external balances, especially in countries with weaker institutions.","summary":"The paper constructs foreign credit supply shocks from creditor-specific changes in lending and examines 134 developing economies over 1970-2023. Such shocks lead to higher public investment and external debt but, on average, no sustained gain in output or productivity, and are accompanied by real exchange-rate appreciation and weaker external balances. The benefits depend on institutional quality.","takeaways":["Foreign credit supply shocks lead to persistent increases in public investment and external indebtedness.","On average, easier external borrowing brings no sustained improvement in output or productivity.","It is accompanied by real exchange-rate appreciation and weaker external balances.","Countries with stronger institutions show more favourable productivity and output responses to additional borrowing."],"wording_correction":{"checked":"2026-11-01","human_reviewed":true,"made_by":"Claude (AI assistant)","reason":"The model wrote that the shocks \"cause\" appreciation and weaker balances and that institutions \"enable\" growth. The abstract says \"accompanied by\" and that the benefits \"depend on\" institutional quality.","source":"Abstract of the IMF working paper"}},"authors":["Marijn A. Bolhuis","Tobias Krahnke","Mr. Papa M N'Diaye"],"date":"2026-10-02","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"d8ff8d0753552052","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Analyzes foreign credit shocks on growth and external balances in developing economies, informing policy and market risk.","screening_tag":"EM","selected_in":["2026-10"],"source":"imf","source_name":"IMF Working Papers","tag":"EM","tag_inferred":false,"title":"Does Foreign Borrowing Lift Growth?","url":"https://ideas.repec.org/p/imf/imfwpa/2026-216.html"},{"abstract":"How do rental markets shape inflation? In many countries, new leases follow the market, while ongoing rents rise only with inflation. Longterm tenants therefore pay less than newcomers – a “tenure discount.” This paper builds a simple model of this two-tier system and tests it with Austrian data (2005–2024). It shows how contract length and indexation rules make rent inflation persistent and how they drive inflation in both the short and long run.","also_at":[],"analysis":null,"authors":["Markus Knell"],"date":"2026-10-02","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"b381512b4d4babc4","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Shows rent-control mechanisms affect inflation dynamics, relevant for price-level outlook in advanced economies.","screening_tag":"DM","selected_in":[],"source":"oenb","source_name":"Oesterreichische Nationalbank","tag":"DM","tag_inferred":false,"title":"Inflation and Rental Markets: Theory and Evidence from a Rent-Controlled System","url":"https://ideas.repec.org/p/onb/oenbwp/282.html"},{"abstract":"Despite the increasing use of asset purchase programs (APPs) by central banks over the past two decades, the economic literature has not empirically investigated how APPs are conducted from a cross-country perspective. Furthermore, a complete picture and critical details of APPs around the world remains lacking, particularly for small advanced economies and emerging markets. This paper fills this information gap by constructing a comprehensive global database on central bank asset purchase programs for the entire universe of advanced economies and emerging markets with monetary autonomy from 2008 to 2024. Our findings show that most central banks have conducted APPs, which have displayed heterogeneous characteristics, witnessed greater usage, and covered major asset classes beyond conventional government debt securities. The empirical analysis suggests that while triggers of APPs during 2008-2009 seem to be idiosyncratic across economies, disinflationary risks and government bond market volatilities activated the use of APPs in 2020. Furthermore, central banks that are constrained by the Zero Lower Bound and operate in countries with high public debt to GDP ratios tend to have longer buying durations of APPs. Finally, the pace of APPs depends on their previous pace as well as real GDP growth and CPI inflation and differs between buying and unwinding phases.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"advanced economies and emerging markets","flags":[],"in_issue":false,"rationale":"The abstract references both advanced economies and emerging markets.","relevance_note":"Understanding the conditions that prompt central banks to launch or extend asset purchases helps policymakers gauge the likely scope of future programmes and informs market participants about potential balance-sheet impacts.","summary":"The paper builds a global database of central-bank asset purchase programmes (APPs) covering advanced economies and emerging markets from 2008-2024, and documents their heterogeneous features and increasing use. Empirical analysis finds that disinflationary risks and government-bond market volatility triggered APPs in 2020, and that zero-lower-bound constraints and high debt-to-GDP ratios are associated with longer programmes.","takeaways":["Most central banks have used APPs, with varied characteristics and asset coverage beyond government debt","In 2020, disinflationary risks and bond-market volatility activated APP use","Zero-lower-bound constraints and high public-debt-to-GDP ratios are linked to longer APPs"],"wording_correction":null},"authors":["Mr. Zhongxia Zhang","Yuhua Cai"],"date":"2026-10-02","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"a9a4dba7b19c8ebf","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Creates global APP database and analyzes triggers, directly aiding monetary-policy and market strategy.","screening_tag":"Transversal","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"Transversal","tag_inferred":false,"title":"How Do Monetary Authorities Buy Publicly Traded Financial Assets? A Cross-Country Database and an Empirical Study of Central Bank Asset Purchase Programs","url":"https://ideas.repec.org/p/imf/imfwpa/2026-215.html"},{"abstract":"This paper investigates which features of a Bayesian dynamic factor model improve U.S. GDP nowcasts and whether their contribution varies across historical episodes. Using pseudo-real-time information sets for 25 series, we estimate 16 combinations of dynamic heterogeneity, stochastic volatility, time-varying long-run growth, and a multiplicative outlier adjustment. We evaluate their marginal contributions to point, density, and quantile score forecasts using balanced paired factorial contrasts. Dynamic heterogeneity improves point, density, and tail forecasts, and it is the only feature that helps consistently across all three criteria. Stochastic volatility improves density and tail forecasts in some periods but not point forecasts consistently. Time-varying long-run growth lowers squared-error loss in some periods but worsens tail forecasts. The outlier adjustment does not improve point or density forecasts overall, has favorable but imprecisely estimated effects on upper-tail quantile scores during the pandemic, and worsens those scores afterward.","also_at":[],"analysis":null,"authors":["Freddy García-Albán","Manuel González-Astudillo"],"date":"2026-10-02","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"5513c159211eccec","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"This paper provides practical insights into improving GDP nowcasting models, which is highly relevant for macro-forecasting and market analysis.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":false,"title":"Bells and Whistles of Nowcasting Models: Which Matter and When?","url":"https://www.federalreserve.gov/econres/feds/bells-and-whistles-of-nowcasting-models-which-matter-and-when.htm"},{"abstract":"Average actual hours worked (AAHW) have declined across many advanced economies, affecting aggregate labor input and potential output. This paper examines the evolution of AAHW in Nordic countries between 2011 and 2022, with a focus on educational attainment and complementary ++gender, employment status, and citizenship. Using microdata from the European Union Labour Force Survey and a Shapley decomposition, the analysis shows that the decline in AAHW is primarily driven by reductions in hours among workers with lower and medium levels of educational attainment, used here as a proxy for skill levels. By contrast, highly educated workers work longer hours and their increasing share partly offsets the decline. Our decompositions show that this education-based result remains robust when worker groups are further split by age, gender and full-time/part-time status, and that most of the citizenship-related variation is concentrated among citizens, with non-citizen contributions generally smaller and often offsetting. Finland represents a temporary pandemic and post-pandemic exception, although the overall contribution of tertiary-educated workers remains positive. Supplementary evidence comparing desired and usual hours shows larger positive gaps among less-educated workers, while tertiary-educated workers in several countries appear closer to, or at times above, their preferred hours. These patterns are consistent with constraints on realized hours, stronger worker demand for hours, or both, but do not identify the underlying mechanism.","also_at":[],"analysis":null,"authors":["Mr. Mauricio Vargas"],"date":"2026-10-02","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"0fcfffc3958ae3fe","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Explores education-driven hour-work declines in Nordics, modest macro relevance.","screening_tag":"Transversal","selected_in":[],"source":"imf","source_name":"IMF Working Papers","tag":"Transversal","tag_inferred":false,"title":"Education and the Decline in Average Hours Worked: Evidence from Nordic Labor Markets","url":"https://ideas.repec.org/p/imf/imfwpa/2026-217.html"},{"abstract":"We study how regional specialization patterns and welfare are affected by uncertainty and economies of scale in an open economy. We use a spatial equilibrium model with sectoral economies of scale, aggregate uncertainty, and irreversible mobility decisions made by heterogenous workers. We analytically characterize how the interactions between comparative advantage, both of workers and firms, economies of scale, and uncertainty shape specialization patterns and, hence, the gains from trade. We find empirical support for the model predictions by documenting the impact of aggregate changes in volatility of sectoral productivity on U.S. regional economies. We calibrate the model using detailed data on U.S. commuting zones and international trade, and extending hat-algebra methods to accommodate uncertainty. Quantitatively, we find that uncertainty shifts employment away from riskier sectors and locations, relative to a deterministic benchmark, lowering the U.S. aggregate gains from trade by around 20 percent. The interaction between uncertainty and scale economies brings down the benefits of specialization. For regions that would otherwise lose from trade, the presence of agglomeration forces and a more elastic labor supply mitigates those losses.","also_at":[],"analysis":null,"authors":["Xiao Ma","Natalia Ramondo"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"fe06d8b3dd2d588b","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Models uncertainty and scale effects on US regional specialization, informing trade and growth outlooks.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Comparative Advantage and Economies of Scale under Uncertainty","url":"https://ideas.repec.org/p/nbr/nberwo/35942.html"},{"abstract":"Venture capital specializes in the financing of customer capital intensive firms—firms with higher sales and marketing expense to revenue ratios, a higher wage bill for sales and marketing employees, and a higher tendency to apply for trademarks—and they do so more than other financial intermediaries. Venture capitalists target high customer capital industries with low knowledge capital but avoid high knowledge capital industries that lack customer capital. Firms tilt investment toward customer capital leading up to the initial venture capital investment, after which their scale accelerates rapidly. Venture capitalists focus on financing customer capital because such investments require tolerance for substantial risks of failure in pursuit of extreme upside potential, as characterized by power law returns. This return profile fits customer capital investments more closely than investments in knowledge capital. Venture capitalists that sprinkle small investments across a large number of firms, colloquially referred to as the “spray and pray” strategy, target customer capital industries for investment, whereas venture capitalists that commit larger amounts to a small number of firms target knowledge capital industries. The venture capital focus on customer capital reflects a shift away from its traditional focus on knowledge capital intensive firms over the past 30 years.","also_at":[],"analysis":null,"authors":["Martin Aragoneses","Young Soo Jang","Amir Sufi"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"fc35eb75bbf82331","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Identifies venture-capital financing patterns for customer-capital firms, relevant to equity markets.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Venture Capital and Customer Capital","url":"https://ideas.repec.org/p/nbr/nberwo/35919.html"},{"abstract":"We develop a simple model of banking industry dynamics to study the relation between market structure and financial stability. Motivated by data, we analyze an environment where a small number of dominant (nonatomistic) banks strategically interact with a large number of small (atomistic) banks. A nontrivial endogenous bank size distribution arises out of entry and exit in response to aggregate and regional shocks to borrowers’ production technologies and banks’ idiosyncratic deposit inflows. Since the model has nonatomistic banks that generate granular spillovers from idiosyncratic shocks and pose systemic risk, we use the model to study the implications of too-big-to-fail policies.","also_at":[],"analysis":null,"authors":["Dean Corbae","Pablo D'Erasmo"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"fa6d83d9fe7abb9d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Analyzes bank size distribution and systemic risk, informing TBTF policy and market stability.","screening_tag":"Transversal","selected_in":[],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"Transversal","tag_inferred":false,"title":"A Quantitative Model of Banking Industry Dynamics","url":"https://ideas.repec.org/p/fip/fedpwp/103867.html"},{"abstract":"We study how global financial conditions transmit to firms’ investment. We document that increases in risk premia are followed by large investment contractions, particularly among firms with higher default risk. We develop a quantitative heterogeneous-firm open-economy model where firms finance investment with defaultable debt priced by risk-averse global investors. We identify a strong risk channel linking changes in the global price of risk to financing costs through firms’ quantity of risk—the sensitivity of debt repayment to global shocks. This introduces a risk dimension to stabilization policy: smoothing cash flows reduces firms’ quantity of risk and dampens international financial transmission.","also_at":[],"analysis":null,"authors":["Caitlin Hegarty","Matias Moretti","Pablo Ottonello","Diego J. Perez"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"f9e6d6d5f3ec845d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Shows how global risk premia affect firm investment, directly informing financial-cycle transmission.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Firms' Investment and the Real Transmission of the Global Financial Cycle","url":"https://ideas.repec.org/p/nbr/nberwo/35918.html"},{"abstract":"What caused the 2000s housing cycle? This article synthesizes two decades of research, including reduced-form empirics and structural models. Although often contentious, the literature coheres once one accounts for each study’s timing, place, methodology, and measurement. The cycle was a perfect storm that occurred in distinct stages. Starting in the late 1990s, fundamentals improved, and credit supply increased across the income distribution due to automated underwriting and financial deregulation. In the early 2000s, a decline in interest rates was followed by a further expansion in securitized and subprime credit, the origin of which remains controversial. This sequence of shocks produced a persistent boom that triggered two shifts in beliefs: average expectations became overly optimistic, pushing prices higher, and expectations diverged, fueling speculation. In the bust, prices overshot primarily due to mortgage defaults, which removed buyers and contracted credit supply. How these forces interact and how expectations form require further research.","also_at":[],"analysis":null,"authors":["Adam Guren"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"f870dcb1eed8ee6d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Synthesizes causes of the 2000s US housing boom/bust, informing housing-market risk assessments.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Reassessing the 2000s Housing Cycle After Two Decades of Research","url":"https://ideas.repec.org/p/nbr/nberwo/35863.html"},{"abstract":"We examine how physical health, health behaviors, and mortality vary with income for prime-age adults. To do so, we leverage population-wide, individual-level cardiovascular health exams linked to income tax records and subsequent mortality for a representative sample of about 350,000 Koreans aged 47--57. For both men and women, there is a negative disease-income gradient for high blood pressure, high blood glucose, and high body mass index, but not for high cholesterol. Disease-income gradients are steeper for women than men, and tend to be concentrated in the top half of the income distribution; similar patterns hold for health behavior-income gradients. Subsequent mortality-income gradients are also concentrated in the top half of the income distribution, but are steeper for men than women. Although physical health and behavior measures are highly predictive of subsequent mortality, differences in these measures by income explain very little of the income-mortality gradient, even for cardiovascular mortality. Our findings suggest that something other than differences in disease burden at prime age drives most of the income-mortality gradient at older ages.","also_at":[],"analysis":null,"authors":["Liran Einav","Amy Finkelstein","Sehyun Hong"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"f66b8c267da11a73","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":1,"screen_reason":"Health-income gradients in Korea, not directly tied to macroeconomic or market questions.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"The Relationship between Income and Health: Evidence from Nationwide Health Exams in Korea","url":"https://ideas.repec.org/p/nbr/nberwo/35880.html"},{"abstract":"In 2024, 315,000 H-2A temporary seasonal work visas were issued to agricultural workers in the US. The H-2A program is controversial: earnings are high, but critics argue that workers face poor working and living conditions and that families bear the costs of separation. We randomize H-2A seasonal visas for Mexican workers. During a single US season, migrants earn more than USD 16,000 and send 70% of these earnings to origin households. Living standards in Mexico rise: food security increases, the probability of living in poverty falls by 10 percentage points, and families invest in home improvements, durable assets, and debt reduction, with little investment in businesses or productive assets. Migration has spillovers onto the household: the mental health of household respondents worsens and they avoid higher-risk situations such as walking at night, and intra-household dynamics change. Migrants generally report satisfaction with H-2A jobs and contracts, all report that they would migrate again, and 85% do so the following season.","also_at":[],"analysis":null,"authors":["Melanie Morten","Beatriz Magaloni","Sebastián Cubillos","Alice Yiqian Wang"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"f5ea25b4dc39c9bc","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Experimental evidence on temporary migration effects on earnings and remittances, modest macro relevance.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"The Returns to Temporary Migration: Experimental Evidence from the H-2A Program","url":"https://ideas.repec.org/p/nbr/nberwo/35941.html"},{"abstract":"We use Luxembourg Income Study and International Social Survey Programme microdata on 27 countries over the 1986-2019 period, augmented by policy and labor market information, to estimate the impact of family-friendly policies on gender gaps in employment, wages, earnings, and part-time work, as well as child penalties in employment and earnings. We find that longer duration of parental leave generally lowers gender gaps in wages, employment, earnings, and child penalties in employment and earnings, except for high levels of this entitlement, where further increases in leave raise gender gaps. We also find that the right to request a part-time work schedule raises relative female part-time employment but lowers employment and earnings gender gaps. Higher government expenditures for childcare lower employment, earnings, and part-time employment gender gaps as well as child employment and earnings penalties. These results are generally stronger for the less educated than for the highly educated, possibly reflecting higher costs of taking time off for highly educated women. Finally, expansion of family-friendly policies over this period can account for 24-33% of our sample’s reduction in gender gaps in employment and earnings and 46-76% of the reduction in child penalties in these outcomes. The slower expansion of such policies in the United States than elsewhere accounts for 6-15% of the slower reduction in US gender employment and earnings gaps and 20% of the slower fall in the US child employment penalty.","also_at":[],"analysis":null,"authors":["Francine D. Blau","Lawrence Kahn","Freddy Bachmann","Helen Burkhardt","Leonardo Peñaloza-Pacheco","David Titus"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"f4dcc786cddc77d3","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"Evaluates family policies on gender gaps, primarily social-policy relevance.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Gender Gaps: International Evidence on the Role of Family Policy","url":"https://ideas.repec.org/p/nbr/nberwo/35939.html"},{"abstract":"We develop a tractable framework for analyzing geopolitics as a network of coordination and strategic influence. Countries choose geopolitical actions that trade off domestic interests against incentives to align with connected countries. They can exert costly bilateral influence to affect one another’s actions. We characterize equilibrium actions and bilateral influence in closed form. Cross-country differences in domestic interests decompose into latent geopolitical cleavages, each of which the network transmits into geopolitical actions independently of the others. The cross-country covariance matrices of domestic interests and of geopolitical actions identify the cleavages and their importance, from which we recover the network. We implement the framework using data on United Nations voting and democratic orientation. The inferred network is well approximated by a few dimensions, aligns with external measures of geopolitical ties, and recovers well-known historical cleavages. We undertake counterfactuals for domestic interests and network connections and quantify three notions of geopolitical power","also_at":[],"analysis":null,"authors":["Ernest Liu","Stephen J. Redding","Bennett Smith-Worthington","David Y. Yang"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"f2b4a77187890b8a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"Develops a network model of geopolitics using UN voting data, primarily political rather than market focused.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"A Network Approach to Geopolitics","url":"https://ideas.repec.org/p/nbr/nberwo/35951.html"},{"abstract":"We develop a two-asset HANK model to examine the effects of various unconventional monetary policies, including Quantitative Easing, Operation Twist, Reserve Management Purchases and Liquidity Facilities. Our analysis focuses on the macrofinancial implications of these policies, as well as their impact on wealth and income inequality through shifts in portfolio composition between liquid and illiquid assets. The model features a financial sector with mutual funds and banks that invest in short- and long-term bonds, reserves, and credit to firms. Calibrating the model to the US economy, we find that Operation Twist has weaker effects than standard QE interventions, although all strategies are qualitatively similar in their impact on output, inflation, and the composition of liquid and illiquid assets. Quantitative Easing and Liquidity Facilities are more effective at the zero lower bound, and are the two policies that raise wealth inequality most.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"Calibrating the model to the US economy","flags":[],"in_issue":false,"rationale":"The abstract calibrates the model to the US economy, an advanced economy.","relevance_note":"Understanding how different unconventional tools influence growth, inflation and inequality helps policymakers design interventions when rates are near zero, and informs market participants about likely asset-allocation impacts.","summary":"The paper builds a two-asset HANK model calibrated to the US to compare unconventional monetary tools such as QE, Operation Twist, reserve purchases and liquidity facilities. It finds that all policies affect output, inflation and asset composition similarly, but Operation Twist is weaker, while QE and liquidity facilities boost the economy more at the zero lower bound and increase wealth inequality the most.","takeaways":["Operation Twist yields weaker macro effects than standard QE","QE and liquidity facilities are most effective at the zero lower bound","All policies raise output, inflation and shift assets toward liquid holdings","QE and liquidity facilities raise wealth inequality the most"],"wording_correction":null},"authors":["Charles de Beauffort","Ansgar Rannenberg"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"f2437f7d5e41b5c0","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Studies US unconventional monetary policies and their macro-financial effects, highly pertinent to policy and market outlooks.","screening_tag":"DM","selected_in":[],"source":"nbb","source_name":"National Bank of Belgium Working Papers","tag":"DM","tag_inferred":false,"title":"Different Unconventional Monetary Policies, Different Stories? A HANK Perspective","url":"https://ideas.repec.org/p/nbb/reswpp/202610-504.html"},{"abstract":"Licensure sales requirements are commonly justified as consumer protection regulations intended to improve seller compliance and reduce harm associated with risky products. However, licensure effects may differ across communities with heterogeneous enforcement intensity and seller responses. We study this question in the context of e-cigarette retail licensure laws (ERLLs), a policy intended to regulate access to e-cigarettes among youth. We find that state ERLLs with strong penalties for non-compliance reduce nicotine vaping among Black youths by 2.5-4.0 percentage points but have no effect on White youths. This racially disparate finding is driven by heterogeneous supply-side responses to increased regulatory burden. Vendors in Black neighborhoods are more likely to be targeted for inspections than those in White neighborhoods despite having lower pre-treatment rates of infractions. Moreover, vendors in Black neighborhoods are also less likely to sell e-cigarettes following ERLL adoption, consistent with a racially disparate regulatory burden. Together, our results suggest important distributional consequences of licensure requirements.","also_at":[],"analysis":null,"authors":["Dhaval M. Dave","Jooyoung Kim","Joseph J. Sabia"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"efcd6379b5c84bfc","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Analyzes regulatory impact on e-cigarette sales in the US, offering niche policy insight but limited broader market relevance.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"The Regulatory Burden of Licensure Sales Laws: New Evidence on Race and the U.S. Tobacco Market","url":"https://ideas.repec.org/p/nbr/nberwo/35848.html"},{"abstract":"This paper analyses the state-dependent effects of geopolitical risks on gold prices (i.e. the safe-haven role of gold), conditional on financial conditions. Geopolitical risks are often associated with tighter financial conditions. However, recent data reveal a decoupling be tween such shocks and more restrictive financial conditions, raising the question of how gold returns are affected by geopolitical shocks, conditional on the macro-financial environment. Using monthly data from 1990 to 2026, we find that increases in geopolitical risks– both geopolitical threats and realised events– increase gold returns, with stronger effects ob served during periods of loose financial conditions. We decompose this relationship into two mechanisms: (i) the credit and liquidity risk channel and (ii) the opportunity cost channel. Our findings indicate that the relationship operates most clearly through the first channel, suggesting that the key factor is investors’ capacity to rebalance, while the evidence for the second channel is less conclusive. Finally, we also find that the largest impact occurs when periods of loose financial conditions are compounded with periods of geopolitical escala tions, as seen in 2024–26. These insights highlight the relevance of understanding gold as a safe-haven asset amid complex macro-financial conditions.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"geopolitical risks on gold prices","flags":["tag differs from screening (DM); review"],"in_issue":false,"rationale":"The abstract does not name any specific country, region, or economy, focusing instead on global gold price dynamics.","relevance_note":"Understanding the interaction between geopolitical risk and financial conditions helps investors assess gold's role as a safe-haven asset in varying macro-financial environments.","summary":"This paper examines how geopolitical risks influence gold returns, specifically considering the role of financial conditions. The authors find that geopolitical threats and realized events increase gold returns, with the strongest impact occurring when financial conditions are loose.","takeaways":["Geopolitical risks increase gold returns, particularly during periods of loose financial conditions.","The relationship between geopolitical risk and gold is primarily driven by credit and liquidity risk channels.","The impact of geopolitical shocks on gold is less clearly linked to the opportunity cost channel."],"wording_correction":null},"authors":["Rafael Guerra","Gabriel Zelpo"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"eeb5e2d6fea0a88e","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Examines how geopolitical risk and financial conditions affect gold returns, directly relevant for safe-haven asset markets.","screening_tag":"DM","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"Transversal","tag_inferred":false,"title":"Chasing El Dorado: gold under shifting geopolitical and financial conditions","url":"https://ideas.repec.org/p/bis/biswps/1380.html"},{"abstract":"We propose a narrative-based approach to construct high-frequency measures of political polarization and legislative gridlock for seven democracies: France, Germany, Spain, Italy, the United Kingdom, the United States and Canada. Our indices reveal that polarization has risen markedly since the Global Financial and Sovereign Debt Crises, with a faster increase in North America than in Europe. Through a range of exercises we show that the two indices respond differently to elections and unified government control, and that the latter weakens the pass-through between political polarization and gridlock. Consistent with the literature, we also find that investment declines following an increase in either index. Together, these high-frequency, cross-country measures provide a new tool for comparative political economy analysis.","also_at":[],"analysis":null,"authors":["Marina Diakonova","Julia Estefania-Flores","Corinna Ghirelli","Ana Peñalosa","Javier J. Pérez","Aitana Simó"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"ecad0446640ffc53","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Links political polarization to investment declines across democracies, tangential to market analysis.","screening_tag":"Transversal","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"Transversal","tag_inferred":false,"title":"Political Polarization and Legislative Gridlock: A Comparative High-Frequency Approach","url":"https://ideas.repec.org/p/bde/wpaper/2636e.html"},{"abstract":"Optimal tax policy frequently prescribes different tax treatments for activities that are difficult in practice for tax administrators to distinguish, such as expenditures undertaken for business versus personal purposes. We study the optimal design of income tax deductions for such expenditures under the assumption that a common deduction rate must be applied to both forms of the expenditure. The Pareto optimal common deduction turns on the relative compensated spending response for each margin, weighted by the income tax wedge. We also characterize the welfare gain from distinguishing between the two expenditure forms as a harmonic mean of the compensated responses. We illustrate both results with an application to air travel expenses.","also_at":[],"analysis":null,"authors":["Jacob Goldin","Sebastian Koehne","Nicholas Lawson"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e9baa6d88543fe02","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"Theoretical optimal tax design for indistinguishable activities, limited immediate market impact.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Optimal Taxation of Indistinguishable Activities","url":"https://ideas.repec.org/p/nbr/nberwo/35938.html"},{"abstract":"Firms ask workers to train AI systems that will replace them. We model this with a worker who can shirk, cooperate with training, or obstruct training while maintaining productivity. Because training ends the job but only cooperation completes training, dismissal becomes a weaker penalty for shirking. The firm must raise the worker’s rent, and the worker gains from their replacement. AI can create jobs paying more than they produce and eliminate jobs it never automates. Firms paying only wages may slow training. A credible completion bonus equal to the worker’s rent without AI removes both the gain and the slowdown.","also_at":[],"analysis":null,"authors":["Joshua S. Gans","Peter Landry"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e7b5cd525e69f6c5","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Explores worker behavior and AI-driven automation, offering indirect insights for labor market and productivity trends.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Training Your Replacement: Worker Incentives and the Pace of Automation","url":"https://ideas.repec.org/p/nbr/nberwo/35950.html"},{"abstract":"This paper examines the role of consumer confidence in shaping housing market participation and transaction prices. We combine individual-level measures of consumer confidence with administrative housing transaction data for the Netherlands over the period 2006 to 2024, exploiting within-quarter cross-sectional variation in confidence observed prior to market entry. Consumer confidence is a strong predictor of participation on both sides of the housing market, with substantially larger effects for buyers than for sellers. Conditional on participation and accounting for endogenous selection, buyers with more positive expectations pay 2.2% higher transaction prices in supply-constrained markets, with effects increasing to 4.4% in the most constrained areas. In contrast, seller confidence has no economically meaningful impact on transaction prices. The findings identify two distinct channels through which expectations affect housing market outcomes: by influencing market participation decisions and, conditional on participation, by affecting buyers’ willingness to pay. These results suggest that housing market dynamics are driven not only by valuation differences among active participants but also by confidence-induced selection into the market.","also_at":[],"analysis":null,"authors":["Arjan de Leuw","Marc Francke","Dorinth van Dijk"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"e5799a00443bd808","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Links consumer confidence to housing participation and prices, informing real-estate market dynamics.","screening_tag":"DM","selected_in":[],"source":"dnb","source_name":"De Nederlandsche Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Bidding with Confidence: The Effect of Financial and Economic Beliefs on Housing Markets","url":"https://ideas.repec.org/p/dnb/dnbwpp/874.html"},{"abstract":"We study how professional forecasters perceive a central bank's reaction function, and how those perceptions evolve over time, using survey data from Australia between 2015 and 2025. Adapting recent survey-based approaches, we recover time-varying perceived policy rules that map expected macroeconomic conditions into expected policy rates. We find that perceived responsiveness to inflation was modest prior to the pandemic, reflecting views that rates would not be cut to tackle low inflation. The perceived responsiveness then rose sharply after sustained policy tightening began in 2022. Central bank communication about labour market conditions and financial stability shaped perceptions of the reaction function over these periods. However, during the elevated period of uncertainty following COVID, beliefs about the importance of inflation adjusted only after forecasters observed realised policy actions, highlighting the limits of communication alone. We also show that heterogeneity in long-run beliefs, including views about long-run inflation, plays an important role in shaping interest rate expectations, but can be parsimoniously captured using forecaster fixed effects.","also_at":[],"analysis":null,"authors":["Jonathan Hambur","Qazi Haque"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"other-central-bank","id":"e5521e9ca19a27d9","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Analyzes Australian forecasters' perception of monetary policy, directly informing interest-rate expectations and markets.","screening_tag":"DM","selected_in":[],"source":"rba","source_name":"Reserve Bank of Australia","tag":"DM","tag_inferred":false,"title":"Perceived Monetary Policy Rules: Evidence From Professional Forecasters in Australia","url":"https://ideas.repec.org/p/rba/rbardp/rdp2026-06.html"},{"abstract":"We study how firms choose among incentive contracts and how accurately managers predict their effects. Using a survey of managerial beliefs and a large-scale field experiment, we randomly assign agents at the market level to several widely used, expenditure-equivalent incentive schemes. In the field, the best-performing contract raises weekly firm profit by over 55% relative to the status quo, despite being ranked lower by managers, whereas the worst-performing contract performs as predicted. Managers reliably avoid poorly performing contracts but systematically underestimate top-performing ones. Standard contract theory does better as a forecaster here: an unbiased textbook principal orders the contracts correctly, or very nearly so, correctly identifying the profit leader where managers do not; where it does miss, the error is similar to managers’ and for a similar reason. We show that the performance differences across contracts reflect a mix of labor-supply and risk responses, and that managerial predictability varies with contract complexity and managerial hierarchy. Our results highlight the importance of contract design for firm performance and reveal systematic limits to managerial cognition in shaping incentives.","also_at":[],"analysis":null,"authors":["Francis Annan","Collin B. Raymond"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e54997eb5f138c3f","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Focuses on contract design and firm-level profit, limited macro or market implications.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Beliefs Over Contracts","url":"https://ideas.repec.org/p/nbr/nberwo/35788.html"},{"abstract":"Short-term return reversal is one of the most robust asset-pricing anomalies, and is commonly linked to liquidity provision. We decompose individual firm stock returns into two distinct components: SYS, the component of returns that can be linked to systematic risk and public information releases; and an orthogonal residual RES. The RES component reverses, while the SYS component exhibits continuation. Moreover, the residual reversals are highly asymmetric: positive residual shocks reverse much more slowly than negative shocks. A return factor based on asymmetric idiosyncratic reversal subsumes the idiosyncratic volatility factor and a broad set of other short-horizon anomalies. Our findings suggest that asymmetric idiosyncratic reversal (AIR) is the primary driver of short-term return predictability.","also_at":[],"analysis":null,"authors":["Federico Baldi-Lanfranchi","Pierre Collin-Dufresne","Kent D. Daniel"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e51d069389fa31fb","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Identifies a new short-term return factor, directly relevant for equity market timing and asset-pricing models.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Asymmetric Reversals","url":"https://ideas.repec.org/p/nbr/nberwo/35840.html"},{"abstract":"We examine optimal non-cooperative monetary policy in a two-country New Keynesian setting with complete financial markets and pricing to market for goods. In contrast to the case in which the law of one price holds for goods, currency misalignments are an important consideration even for self-oriented policymakers. Financial markets are critical in the analysis. Under “full” commitment, the optimal policy considers the effects on asset values and hence wealth distribution across countries. Optimal policy under full commitment differs from the “partial” commitment case in which the policy commitment is not made until after asset markets clear. Surprisingly, the optimal targeting rule under strategic policy with full commitment is the same as under cooperative policy. In this setting, changes in state-contingent claim prices offset the wealth a self-oriented policymaker might seek through terms-of-trade manipulation, and we show that there are no gains from cooperation. Although a policy chosen under partial commitment may be desirable from a country’s perspective, the resulting Nash equilibrium yields lower welfare.","also_at":[],"analysis":null,"authors":["Louphou Coulibaly","Charles Engel"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e4dcafdba1bc4b2b","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Analyzes optimal monetary policy and asset effects in open economies, relevant to policy and market outlooks.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Strategic Monetary Policy in Open Economies","url":"https://ideas.repec.org/p/nbr/nberwo/35928.html"},{"abstract":"This paper develops a dynamic model of the attention economy featuring two interlinked markets: a product market, where consumers have limited awareness of firms, and an attention market, where platforms attract attention by investing in free services (e.g., social media, streaming, podcasts) and sell targeted ads using data on consumer preferences. The model provides a tractable framework in which platform investment, ad-driven discovery, product demand, and ad revenue are jointly determined. The effects of data and interoperability policies can reverse over time, platform quality may be inefficiently high or low, and the rise of data-rich digital advertising can coincide with a declining ad revenue-to-GDP ratio. (JEL D43, D44, D58, D83, L86, M37)","also_at":[],"analysis":null,"authors":["Daniel Chen"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20240651","doi_registered":"2026-10-01","flags":[],"group":"journal","id":"e4403ac7078e1463","issue_date":"2026-10-01","kind":"journal","publication_month":"2026-10","relevance":6,"screen_reason":"Models digital platforms and ad markets, relevant to policy and market dynamics of data-driven advertising.","screening_tag":"Transversal","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"Transversal","tag_inferred":false,"title":"A Model of the Attention Economy: Data, Platforms, and Discovery","url":"https://doi.org/10.1257/aer.20240651"},{"abstract":"We introduce an LLM workflow for functional form sensitivity analysis. A researcher estimates the value of an object of interest by maximizing the fit of a working model to some data. The working model assumes an arbitrary form for some function. We define sensitivity by how much it is possible to change the estimate of the object of interest, without compromising fit, by selecting a different functional form. The workflow first looks for an analytic solution. If it fails to find one, it approximates the solution via numerical methods that respect the fit constraint at each step of a solver path. The workflow yields a verifiable lower bound on the in-sample sensitivity of the researcher’s estimate, and is fast in many practical situations. We illustrate with an application to the welfare cost of adverse selection in health insurance.","also_at":[],"analysis":null,"authors":["Isaiah Andrews","Simon C. Essig Aberg","Jesse M. Shapiro"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e41bd04a5bde38b0","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Methodological paper on sensitivity analysis with a health insurance example, limited macro market impact.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"An LLM Workflow for Functional Form Sensitivity Analysis","url":"https://ideas.repec.org/p/nbr/nberwo/35947.html"},{"abstract":"The Critical Access Hospital (CAH) program, established under the Balanced Budget Act of 1997, provides cost-based Medicare reimbursement to small rural hospitals in exchange for limits on inpatient capacity and service scope. We estimate the effects of CAH designation on hospital finances, capacity, and organizational outcomes using a synthetic difference-in-differences design that exploits the staggered 1999– 2002 rollout of state-level CAH availability. We find that CAH designation raises operating margins by three to four percentage points, with no change in liquidity or capital investment, as cost-based reimbursement sustains revenue while expenses fall with scale. Designation also reduces inpatient scale, with significant declines in total beds, obstetric capacity, and nursing staff. Emergency department visits also decline meaningfully, while outpatient volume is largely unchanged. At the same time, CAH designation reduces hospital closures, with no meaningful effect on mergers. These results point to a “survival versus scale” tradeoff across hospitals within a state, wherein designation-based subsidies avert closure for a small number of hospitals while inducing widespread inpatient downsizing among the many more hospitals that convert. Because converting hospitals shed more inpatient capacity than averted closures preserve, the program may reduce aggregate rural inpatient capacity even as it keeps hospitals open.","also_at":[],"analysis":null,"authors":["Ian M. McCarthy","Katie Leinenbach"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e13d027ebf6e6cae","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Assesses financial effects of rural hospital policy, modest relevance to health-sector investment outlook.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Survival versus Scale: The Effects of Critical Access Hospital Designation","url":"https://ideas.repec.org/p/nbr/nberwo/35876.html"},{"abstract":"We invert structural gravity to recover trade cost changes delivering targeted outcomes. For attainable welfare targets, one instrument per target yields a unique solution. At unchanged producer prices and to first order, each instrument must change by the welfare target divided by its own expenditure share; the required domestic change is about the size of the target, while the import change is several times larger. Inverting observed trade flows gives a separate trade cost change for each of the two directions in which a pair of countries trades. Applications to NAFTA and world trade illustrate the benefits of our approach.","also_at":[],"analysis":null,"authors":["James E. Anderson","Mario Larch","Yoto V. Yotov"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e05a2922c0e2d55d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Presents a method to infer trade-cost changes, relevant for trade policy and welfare analysis.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Inverted Gravity","url":"https://ideas.repec.org/p/nbr/nberwo/35897.html"},{"abstract":"Private capital fund managers appear to possess significant information about the relative quality of their portfolio firms even within the first three years after the investment. But the way this information is disclosed to investors changes dynamically: Textual discussions of portfolio companies have substantial information about the firms’ ultimate performance in the early stages of investment, while interim valuations are less important. Over time, this pattern reverses, with interim valuations becoming more important in explaining future returns, especially after portfolio companies have a financing event. The results vary not only with the tone but also with the content of fund manager disclosures. In an opaque market with substantial information asymmetries, textual discussions seem to serve as a signal about general partner quality.","also_at":[],"analysis":null,"authors":["Josh Lerner","Fiona Paine","Antoinette Schoar"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"deec74a11f0814ec","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Examines private-equity disclosures, offering insight into information flow but limited market impact.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Communicating Performance: Textual and Financial Disclosures in Private Equity","url":"https://ideas.repec.org/p/nbr/nberwo/35860.html"},{"abstract":"We study the role of foreign ideas in U.S. innovation by constructing a directed “genealogy” of technologies from the full text of 13 million patents filed between 1887 and 2024. By tracing which earlier technologies appear in the founding patents of new ones, we recover a large-scale input–output network of technological recombination that identifies the foreign technologies that serve as inputs into innovation in the United States. We report four main findings. First, foreign ideas are pervasive: 54% of U.S. technologies build on at least one foreign input, and the most fertile U.S. technologies rely on foreign inputs most heavily. Second, foreign ideas have large causal effects on U.S. innovation. Using the historical settlement of migrants as a source of exogenous variation in local ancestry, we show that U.S. counties more exposed to knowledge from a given foreign country absorb substantially more technologies from that country and, in turn, invent significantly more U.S. technologies building on them. Third, foreign ideas shape not only the level but also the direction of technical change: U.S. counties are far more likely to pioneer the specific technologies whose foreign inputs are already in their local idea stock, and the changing origins of foreign ideas accompany the shift of American innovation from its historical heartland toward the coasts. Fourth, these effects leave a lasting imprint on local labor markets: decades later, counties that absorbed more of an origin’s ideas host more jobs working with those ideas, and even more work with the U.S. technologies descended from them.","also_at":[],"analysis":null,"authors":["Tarek Alexander Hassan","Aakash Kalyani","Juan Cruz Lopez Del Valle"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"ddad3ba89f8bcf2d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Quantifies foreign ideas' causal impact on US innovation, relevant for tech-sector growth expectations.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Foreign Giants' Broad Shoulders: The Causal Effect of Foreign Ideas on U.S. Innovation","url":"https://ideas.repec.org/p/nbr/nberwo/35900.html"},{"abstract":"We investigate regional heterogeneity in capital quality between Southern and Northern Italy using a new dataset covering all transactions of commercial motor vehicles by Italian firms. The regional distribution of motor-vehicle quality - measured by vehicle age and environmental efficiency - closely mirrors the geography of labour productivity. Observable firm attributes and physical vehicle characteristics together account for approximately one third of the cross-regional variation in the quality of the motor vehicle stock, leaving a substantial residual attributable to structural and market-level factors. Geographic market segmentation and lower inflows of newly registered vehicles contribute to the lower quality of Southern Italy's stock, although inflows of newer second-hand vehicles from the North partially mitigate this gap. Regional disparities in the quality of motor vehicles widened between 2015 and 2024.","also_at":[],"analysis":null,"authors":["Marta Crispino","Michele Loberto","Riccardo Russo"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"d9ebe385ad05c7a7","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"The paper explores regional economic disparities and capital quality in Italy, providing insights into structural economic divergence within a major DM economy.","screening_tag":"DM","selected_in":[],"source":"banca-ditalia","source_name":"Banca d'Italia Temi di discussione","tag":"DM","tag_inferred":false,"title":"Capital quality and regional disparities: evidence from commercial vehicle transactions","url":"https://ideas.repec.org/p/bdi/wptemi/td_1548_26.html"},{"abstract":"We test whether stablecoins and bank deposits act as substitutes by estimating the semi-elasticity of stablecoin market capitalization with respect to deposit rate changes. Using local projections fit to weekly U.S. data from January 2019 to June 2025, we find that deposit rate increases predict slower stablecoin growth. To address endogeneity, we exploit a nonlinearity in deposit rate pass-through. Whereas other money market rates track the federal funds rate roughly linearly, banks reprice deposits more aggressively once it exceeds approximately 3%. Against average ten-week stablecoin growth of 15%, ordinary least squares estimates imply a reduction of roughly 3 percentage points per basis point of deposit repricing, or about 2.4 percentage points per one-standard-deviation move. Instrumental variable estimates are roughly three times larger and pass a placebo test using non-stablecoin cryptocurrencies. Effects are stronger for USDC than for USDT, consistent with the former’s closer ties to U.S. depositors. Cross-sectional variation in repricing across deposit tiers provides independent evidence of substitution. The size of the stablecoin sector therefore depends in part on how banks price deposits.","also_at":[],"analysis":null,"authors":["Iñaki Aldasoro","Rashad Ahmed"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"d6ef101da1bcedd0","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Tests substitution between stablecoins and deposits, informing monetary-policy and financial-market stability.","screening_tag":"DM","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"DM","tag_inferred":false,"title":"Are stablecoins and bank deposits substitutes?","url":"https://ideas.repec.org/p/bis/biswps/1382.html"},{"abstract":"We hypothesize that broad contact, involving brief interactions with multiple outgroup members, and deep contact, meaning longer interactions with a single outgroup member, play distinct roles in shaping intergroup relations. We set up a factory in India and recruited Hindu and Muslim men to work in pairs on joint production tasks. We randomly assigned participants to work either with the same ingroup or outgroup partner daily (deep contact), a different outgroup partner each day (broad contact), or to a control group. Deep contact strengthens social and economic ties with the outgroup partner. But only broad contact reduces the majority group's misperceptions about outgroup strangers. Using within-treatment variation in partners’ pre-treatment productivity, we show that participants in both arms learn about their partners, but broad participants also generalize these belief updates to strangers. These findings align with a model in which independent sampling promotes learning about outgroups more than prolonged interaction with a single individual does. Nevertheless, neither type of contact changes behavior toward the wider outgroup.","also_at":[],"analysis":null,"authors":["Anujit Chakraborty","Arkadev Ghosh","Matt Lowe","Gareth Nellis"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"d6737c9fef991271","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":1,"screen_reason":"Experimental study of intergroup contact, no macroeconomic or market relevance.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Learning About Outgroups: The Impact of Broad Versus Deep Interactions","url":"https://ideas.repec.org/p/nbr/nberwo/35884.html"},{"abstract":"China launched a nationwide, rate-based carbon market in 2021. Covering the world’s top CO2 emitter, compliance depends on the intensity of carbon emissions rather than an absolute cap. We draw on the theoretical literature of rate-based systems to provide the first empirical evidence on an early adopter. Using plant-level data from satellite imagery and machine learning methods, we find that high-efficiency power plants increased electricity generation and CO2 emissions by approximately 5% relative to low-efficiency plants. Because its carbon market regulates nearly all coal plants in China, we focus on the differential responses by plant efficiency, finding no evidence of a differential reduction in emission intensity (though these estimates are imprecise). Relative to coal plants in Indonesia and the Philippines, which had no carbon market, China’s high-efficiency plants also increased emissions, while the estimate for its low-efficiency plants is small and insignificant. This pattern of responses suggests that emissions increases of high-efficiency plants exceeded substitution away from low-efficiency plants. Underscoring the production stimulus to more efficient Chinese plants, air quality worsened downwind of high- efficiency plants relative to low-efficiency plants, compromising air quality in relatively clean areas of China. If China's goal is to reduce its carbon emissions, then benchmarks will need to be tightened within the existing system or an alternative system that does not simultaneously incentivize electricity production will need to be adopted.","also_at":[],"analysis":null,"authors":["Shuang Zhang","Douglas Almond"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"d62d61e1455c21b2","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Empirical evidence on China's carbon market effects on plant emissions, crucial for emerging-market energy and climate policy.","screening_tag":"EM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":false,"title":"Too Little too Late? Nationwide Carbon Trading in China","url":"https://ideas.repec.org/p/nbr/nberwo/35924.html"},{"abstract":"New machinery has long been argued to raise the relative demand for skilled labor, yet firm-level evidence finds no such shift at investing firms. We resolve this puzzle by looking beyond firm boundaries. Linking Belgian data on capital investments, buyer–supplier transactions, and worker skills, we show that the skill bias of new machinery arises entirely at external suppliers. Following machinery investment spikes, purchases from suppliers raise firms’ total demand for high-STEM workers by 45%, three times the rise for other skill groups, while in-house hiring raises it by less than 5%, evenly across skill groups. This external demand comes first from machine integrators and later from complementary services such as software, and is stronger for smaller firms, lumpier investments, and rapidly advancing capital, consistent with fixed and adjustment costs of hiring high-STEM workers in-house. In a general-equilibrium model estimated on our event studies, the rise in machinery per worker from 2003 to 2021 raises relative demand for high-STEM workers by 8.8 log points and their wage premium by 3.1. Measured on payrolls alone, both would fall.","also_at":[],"analysis":null,"authors":["Gert Bijnens","Anders Humlum","Stijn Vanormelingen"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"d503987b1559ce8a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Shows external skill-bias from capital investment, informs labor-market and productivity outlooks.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Capital-Skill Complementarity Beyond Firm Boundaries","url":"https://ideas.repec.org/p/nbr/nberwo/35857.html"},{"abstract":"When does bad news stick? This paper shows that the persistence of media sentiment depends not only on whether news is good or bad, but also on what the news is about. Using the complete Wall Street Journal archive from 1990 to 2025, we construct monthly positive and negative sentiment indices for twelve economic topics and estimate topic-specific sentiment dynamics. Bad-news innovations generate larger cumulative responses than positive-sentiment innovations in every topic, indicating that negativity asymmetry is a broad feature of media sentiment. But the size of this asymmetry varies sharply across topics. The bad-minus-positive persistence gap is largest in security and human rights, firms and corporate strategy, health and public safety, and real estate and financial stability. Bad-news persistence is also sizable in data-rich topics such as financial markets, real estate, and corporate news, suggesting that frequent information arrival does not necessarily lead narratives to revert quickly. These findings show that aggregate sentiment indices mask substantial topic-level heterogeneity in the asymmetric dynamics of narratives, with potential implications for how persistent negative sentiment shapes expectations, asset prices, and real economic outcomes.","also_at":[],"analysis":null,"authors":["Isha Agarwal","Wentong Chen","Eswar S. Prasad"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"d3d5eec32bc6e1f0","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Analyzes media sentiment persistence, which can influence market sentiment across topics.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"When Does Bad News Stick? Topic-Level Asymmetry in Narrative Dynamics","url":"https://ideas.repec.org/p/nbr/nberwo/35838.html"},{"abstract":"Analyses of survey data may be confounded if people use response scales differently. We formalize and generalize the theory behind using “calibration questions,” such as vignettes, to correct for scale-use heterogeneity. Finding, in our (N ≈ 10,000) and existing data, that the mapping between respondents’ scales is approximately linear, we develop a simple estimator for scale-use-corrected regressions. We validate it using subjective-scale ratings of height and weight and illustrate it with life satisfaction regressions, where correction leaves the main qualitative findings intact but can substantially change coefficient ratios, for example tripling the estimated cost of unemployment relative to income.","also_at":[],"analysis":null,"authors":["Daniel J. Benjamin","Kristen B. Cooper","Ori Heffetz","Miles S. Kimball","Jiannan Zhou"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"d2e016f8a04f7615","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Presents a statistical correction for survey scales; limited direct macro or market relevance.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Correcting for Heterogeneity in the Use of Subjective Scales","url":"https://ideas.repec.org/p/nbr/nberwo/35925.html"},{"abstract":"The Cox-Ingersoll-Ross model (CIR) is a diffusion process with widespread applications in economics, finance and population biology. In this paper we first obtain a full Gibbs Sampler for the exact CIR process observed at equidistant times. We do not require the imposition of the Feller condition. We show how to carry out smoothing and handling of missing data. Additionally, the introduction of a tailored single Metropolis-Hastings step allows us to handle irregular and random time intervals. Secondly, we obtain several asymptotic properties which include Local Asymptotic Normality, consistency and asymptotic normality of conditional maximum likelihood estimation and a Bernstein-von Mises theorem. Lastly, we provide an empirical illustration using U.S. Treasury yields under a variety of priors and a comparison with other models such as the Vasicek and the 3/2 models.","also_at":[],"analysis":null,"authors":["Dante Amengual","Lluc Puig-Codina"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"d23c2aed01bb4c05","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"This is a technical econometric paper on the CIR model applied to US Treasury yields, primarily useful for quantitative researchers and modelers.","screening_tag":"DM","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"DM","tag_inferred":false,"title":"A Bayesian Analysis of the Cox-Ingersoll-Ross Model","url":"https://ideas.repec.org/p/bde/wpaper/2640e.html"},{"abstract":"Immigration affects natives through both labor markets and public budgets, yet these channels are usually studied separately. We combine them in a general-equilibrium model with search-and-matching frictions, skill-specific progressive labor taxes, capital taxation and public goods, calibrated to 17 OECD countries over 2015-2019. The welfare effect on natives of a one-percentage-point increase in immigrant inflows varies in sign and size across countries, hinging on immigrants' skill mix, immigrant-native wage gaps, resident unemployment, and tax progressivity. For inflows matching the skill composition of 2019-2024 arrivals, native welfare rises in 14 of 17 economies, and in most cases both skill groups gain, through different channels. Lower-skilled natives gain mainly from higher pre-tax earnings, driven by job creation and complementarity with skilled immigrants; higher-skilled natives gain mainly from lower labor-tax burdens. Evaluating immigration policy thus requires modeling labor-market and fiscal channels jointly: either channel alone gives an incomplete picture of who gains and why.","also_at":[],"analysis":null,"authors":["Michele Battisti","Giovanni Peri","Eleonora Romano"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"d16dafbfdb5b6ea5","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Joint labor-market and fiscal immigration model across OECD, relevant for policy and growth outlooks.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Modeling and Evaluating the Labor Market and Fiscal Effects of Immigration","url":"https://ideas.repec.org/p/nbr/nberwo/35901.html"},{"abstract":"During research and development, firms must decide which types of individuals to engage in developing and testing their products. We investigate how lowering the cost of including one group shapes its representation, subsequent innovation, and product adoption. In 2000, Medicare expanded coverage of clinical trial costs for elderly trial participants, a historically underrepresented group in drug development. This policy increases representation: trial sponsors expand trial eligibility to include elderly participants and increase the share of elderly participants. We find an immediate and large increase in the number of clinical trials for diseases common among the elderly, with the largest increase in drugs not yet approved and in approved drugs tested in new diseases. We document an increase in drug utilization of newly tested drugs among elderly individuals and analyze trial results, adverse events, and drug approvals. Our findings show how financial incentives can increase representation in product development and shift the rate, direction, and adoption of innovation to potentially benefit underserved groups.","also_at":[],"analysis":null,"authors":["Jennifer L. Kao","Tamar Oostrom"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"cec340bb6316e2bd","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Analyzes Medicare trial policy effects on drug innovation and adoption, informing pharma market dynamics.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Representation, Innovation, and Product Adoption","url":"https://ideas.repec.org/p/nbr/nberwo/35936.html"},{"abstract":"Pension funds are long-horizon investors with predictable liability structures. As such, they are often perceived as investors who can provide liquidity and stabilize markets. However, pension funds increasingly face negative operating cash flows as benefit payments exceed contributions. Using aggregate data on U.S. public pension funds combined with granular holdings obtained through public records requests, we document three findings that challenge the conventional view of pension funds as stabilizing investors. First, pension funds with more negative cash flows do not adjust their target asset allocations and maintain low allocations to safe and liquid assets. Second, because of these limited safe asset buffers, pension funds meet cash flow shocks primarily by selling equities, absorbing $0.67 per dollar of shock through equity sales. At the security level, pension funds sell across equities rather than following a safe and liquid-assets-first approach. Third, pension funds sell equities even when equity returns are negative, indicating that these trades reflect liquidity needs rather than portfolio rebalancing. Together, these findings show that pension funds have become regular sellers in equity markets rather than contrarian, stabilizing investors.","also_at":[],"analysis":null,"authors":["Aleksandar Andonov","Kristy A. E. Jansen","Joshua Rauh"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"cc17a363ef306cc7","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Shows pension funds sell equities for liquidity, directly affecting market stability.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"When Cash Flows Turn Negative: Liquidity-Driven Selling by Pension Funds","url":"https://ideas.repec.org/p/nbr/nberwo/35896.html"},{"abstract":"We study how offshore non-deliverable forward (NDF) markets transmit exchange-rate pressures to domestic currency markets. Using unique transaction-level data on the universe of centrally cleared NDFs for ten emerging-market currencies over 2013–2025, we show that offshore NDF order flow moves both offshore forward and domestic spot exchange rates and widens the offshore–onshore forward spread. To our knowledge, this is the first transaction-level evidence on price formation in these markets. A $1 billion long-USD order flow depreciates the domestic spot rate by about 10 basis points and the offshore NDF rate by about 18 basis points. The spot impact is larger when dealer balance sheets are tight. Policy episodes in the Chinese renminbi, Malaysian ringgit, and Indian rupee show how changes in offshore speculative activity and arbitrage between offshore and onshore markets affect the spread and domestic exchange rates. We rationalize these findings with a model in which offshore demand pressure generates NDF order flow, dealers hedge inventory through domestic spot markets, and capital controls limit intermediation between offshore and onshore forward markets.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"ten emerging-market currencies","flags":[],"in_issue":false,"rationale":"The abstract studies ten emerging-market currencies and cites policy episodes in the Chinese renminbi, Malaysian ringgit, and Indian rupee.","relevance_note":"Understanding how offshore forward markets affect domestic exchange rates helps policymakers gauge the transmission of external pressures and the effectiveness of capital controls in emerging economies.","summary":"The paper uses transaction-level data on centrally cleared non-deliverable forwards for ten emerging-market currencies (2013-2025) to show that offshore NDF order flow moves both offshore forward and domestic spot rates and widens the offshore-onshore forward spread. A $1 billion long-USD order flow depresses the domestic spot rate by about 10 basis points and the offshore NDF rate by about 18 basis points, especially when dealer balance sheets are tight.","takeaways":["Offshore NDF order flow shifts domestic spot exchange rates and offshore forward rates","A $1 billion long-USD order flow lowers the domestic spot rate by ~10 basis points","The same order flow lowers the offshore NDF rate by ~18 basis points","Spot impact is larger when dealer balance sheets are tight"],"wording_correction":null},"authors":["Gerardo Ferrara","Andreas Schrimpf","Ganesh Viswanath-Natraj","Zijie Wang"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"c9877597150a3339","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Provides transaction-level evidence on offshore NDFs affecting EM exchange rates, relevant for FX policy.","screening_tag":"EM","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"EM","tag_inferred":false,"title":"Offshore forwards and exchange rate transmission in emerging markets","url":"https://ideas.repec.org/p/bis/biswps/1383.html"},{"abstract":"What are the consequences of restoring state authority in territories governed by criminal organizations? Combining household surveys and administrative records with detailed maps of former gang-controlled areas, we study how El Salvador’s 2022 State of Exception, which ended two decades of gang territorial control, reshaped Salvadoran society. We find that the removal of gang control integrated previously segmented labor markets, improving mobility, employment outcomes, household income, and financial inclusion. Areas with greater pre-2022 gang exposure also experienced larger increases in business formation and property investment. However, the legacy of criminal governance persists through residence-based discrimination: employers remain less willing to hire otherwise identical applicants from former gang-controlled neighborhoods. Finally, although overall support for the crackdowns remains high, individuals who witnessed police abuse report substantially greater distrust of the police and the national government, suggesting that abuses of state authority may undermine the political sustainability of tough-on-crime policies.","also_at":[],"analysis":null,"authors":["Nikita Melnikov","Carlos Schmidt-Padilla","María Micaela Sviatschi"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"c947d5fa3febf3fb","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Assesses gang crackdown effects on Salvadoran labor markets, offering modest insight for emerging-market stability.","screening_tag":"EM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":false,"title":"Gang Crackdowns","url":"https://ideas.repec.org/p/nbr/nberwo/35866.html"},{"abstract":"We develop a multisector open-economy model that maps border price shocks into US producer and consumer prices through imported inputs, domestic production networks, and competition with foreign suppliers. The framework, which we apply to the 2025 US tariffs, accommodates pass-through in either levels or logs and maps directly to public data on input–output linkages, trade, and prices. Allowing firms to respond to the prices of competing imported varieties substantially improves the model’s fit to producer prices, and the resulting model is also consistent with the consumer-price response. Aggregating the estimated price effects across the full consumption basket, the February–October 2025 tariff increases imply a first-order contribution of 0.91 percentage points to headline PCE inflation, including 0.10 percentage points from the foreign competition channel.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"2025 US tariffs","flags":[],"in_issue":false,"rationale":"The abstract explicitly references the United States and U.S. tariffs, tying the analysis to a developed-economy context.","relevance_note":"Policymakers and market participants can gauge how tariff-induced price shocks may feed through supply chains into U.S. inflation, informing decisions on pricing, contracts, and monetary stance.","summary":"The paper builds a multisector open-economy model that translates border price shocks into U.S. producer and consumer prices via imported inputs, domestic production networks, and foreign competition. Applying it to the 2025 U.S. tariffs, the model estimates a 0.91-percentage-point contribution to headline PCE inflation, with 0.10 percentage points coming from foreign competition.","takeaways":["Incorporating foreign-competition responses improves fit to U.S. producer-price data.","The model can handle pass-through measured in levels or logs.","2025 tariff hikes are estimated to add 0.91 percentage points to headline PCE inflation.","Foreign competition accounts for 0.10 percentage points of that inflation impact."],"wording_correction":null},"authors":["Omar Barbiero","Alvaro Silva","Hillary Stein"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"c6a295e635799312","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Quantifies tariff pass-through to US inflation, offering concrete market impact insights.","screening_tag":"DM","selected_in":[],"source":"fed-boston","source_name":"Federal Reserve Bank of Boston","tag":"DM","tag_inferred":false,"title":"Pass-Through Beyond the Border: Oligopoly, Networks, and Tariffs","url":"https://ideas.repec.org/p/fip/fedbwp/103943.html"},{"abstract":"Export controls restrict trade to limit adversaries’ access to goods that contribute to military capability, but their effectiveness depends on how trade and production adjust across countries. We combine new data on U.S. export control classifications and licensing outcomes with a quantitative general equilibrium model featuring dual-use production, input-output linkages, and separate civilian and military final expenditure. We estimate large export and entry frictions from these controls. These effects are substantially smaller for U.S. exports to members of multilateral export control regimes (MECRs): the differential is equivalent to an export cost of 15 to 29 log points. Relative to a counterfactual without differential controls on adversaries, multilateral controls reduce their imports of controlled products far more than unilateral U.S. controls. Only 7% of the reduction in controlled exports under the multilateral regime is replaced by other countries, compared with 28% under unilateral U.S. policy. Multilateral controls reduce adversaries’ real military expenditure by increasing their military price index. The security impact, measured as U.S. real military expenditure relative to adversaries, rises by about 1 log point under multilateral controls but only 0.14 log points under unilateral controls, with both imposing a similar civilian real cost. Even a U.S. embargo fails to reproduce the multilateral security outcome.","also_at":[],"analysis":null,"authors":["Jingting Fan","Kyle Handley","Nuno Limão"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"c69e7907a8369523","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Evaluates export controls’ impact on trade and military spending, informing US trade policy and related market risks.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Export Controls and the Economics of National Security","url":"https://ideas.repec.org/p/nbr/nberwo/35898.html"},{"abstract":"As prediction markets become more prominent, there are concerns that they will be a conduit for political bias. I analyze prediction markets returns from 1880 to 2025 and find no evidence of an overpricing of either left or right-leaning candidates, across a variety of subsamples. In recent elections, there is also no overpricing of either male or female, white or non-white, or young or old candidates. Most political prediction markets exhibit a favorite-longshot bias, and markets on near-term polling averages exhibit a very small overpricing of left-leaning outcomes (e.g., President Trump’s approval falling), which is detectable only because the sample size is large. For elections, however, despite attracting participants who may not be representative of the voting population, prediction markets yield predictions without systematic bias.","also_at":[],"analysis":null,"authors":["Eric Zitzewitz"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"c3d815987c9a1465","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Evaluates bias in prediction markets, relevant for financial market participants.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Are Prediction Markets Politically Biased?","url":"https://ideas.repec.org/p/nbr/nberwo/35846.html"},{"abstract":"This paper evaluates the role of automatic wage indexation following an imported energy price shock in a small open economy belonging to a monetary union. We develop a two-agent New Keynesian model with energy in consumption and production and featuring Ricardian and hand-to-mouth (HtM) households. Wage indexation protects purchasing power through an income channel but impairs the competitiveness of domestic firms, reduces employment, and affects consumption through real interest rate dynamics. We show that although universal indexation mitigates the rise in inequality after an energy shock, HtM consumption benefits only partially because adverse general equilibrium effects offset some of the gain in real wages. Targeting indexation at vulnerable households alleviates the cost for firms but creates distortions in the labour market that may harm the disposable income of indexed workers. Among fiscal instruments, both wage-cost and energy-price subsidies are effective in supporting HtM consumption and reduce welfare inequalities among households. Stabilising energy prices is particularly beneficial for households with a high share of energy in their consumption, especially when a significant portion of their consumption expenditures is dedicated to essential energy needs.","also_at":[],"analysis":null,"authors":["Charles de Beauffort","Gregory de Walque","Thomas Lejeune","Jolan Mohimont","Ansgar Rannenberg"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"c1ac93397f41b128","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Evaluates wage indexation and fiscal tools after energy shocks, pertinent to policy but narrower scope.","screening_tag":"DM","selected_in":[],"source":"nbb","source_name":"National Bank of Belgium Working Papers","tag":"DM","tag_inferred":true,"title":"Protecting households from energy shocks: wage indexation and fiscal policy","url":"https://ideas.repec.org/p/nbb/reswpp/202610-500.html"},{"abstract":"This paper examines the role of government capacity to collect taxes in driving economic development. We first draw on a new macro-historical database to document that tax collections relative to tax administration expenditures rise sharply with GDP per capita. We then interpret this finding in a neoclassical growth model with a tax administration sector in which labor inputs are required to raise tax revenues. Countries differ in their levels of tax productivity, capturing how effectively labor is used to raise taxes, as well as their levels of productivity in creating consumption and investment goods. Governments use tax revenues to provide public capital that complements private factors in production and to make transfers. Quantitatively, our model predicts that increases in tax productivity in low-income economies can raise GDP per capita substantially more than suggested by Hulten’s theorem.","also_at":[],"analysis":null,"authors":["Radhika Goyal","Anders Jensen","David Lagakos","Abdoulaye Ndiaye","Yuntian Zhao"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"c187b2f241181dc1","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Links tax administration productivity to growth, relevant for policy and emerging-market development debates.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Tax Productivity and Economic Development: A Quantitative Macroeconomic Analysis","url":"https://ideas.repec.org/p/nbr/nberwo/35934.html"},{"abstract":"Using generative AI, we extract managers’ economic expectations from over 120,000 corporate conference call transcripts. The resulting AI Economy Score predicts GDP growth, production, employment, and wages five or more quarters ahead, beyond survey forecasts and other existing measures. Industry- and firm-level scores capture sector- and firm-specific activity, and a composite of firm, industry, and macroeconomic expectations further improves forecasting power and horizon. Predictability concentrates among historically more accurate, less biased managers, consistent with an information rather than a noise channel. Managerial expectations thus offer incremental insights into economic activity, with implications for macro- and microeconomic decision-making.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"Using generative AI, we extract managers’ economic expectations","flags":["tag differs from screening (DM); review"],"in_issue":false,"rationale":"The abstract and title mention no specific economy or region, only generic economic activity.","relevance_note":"The findings suggest that AI-processed managerial sentiment can provide early signals of economic trends, useful for policymakers and market participants seeking forward-looking indicators.","summary":"The paper uses generative AI to extract managers’ economic expectations from over 120,000 corporate conference call transcripts and creates an AI Economy Score. This score predicts GDP growth, production, employment, and wages five or more quarters ahead, outperforming survey forecasts and other measures, and its predictive power improves when combined across firm, industry, and macro levels.","takeaways":["AI-derived expectations forecast key macro variables five+ quarters ahead","Industry and firm scores capture sector-specific activity","Combining firm, industry, and macro expectations boosts forecast horizon","Predictability is strongest for historically accurate, less biased managers"],"wording_correction":null},"authors":["Manish Jha","Jialin Qian","Michael Weber","Baozhong Yang"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"c0b9f5d1d86bb028","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"AI-derived managerial expectations forecast GDP and labor market, directly useful for macro outlooks.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Generative AI, Managerial Expectations, and Economic Activity","url":"https://ideas.repec.org/p/nbr/nberwo/35949.html"},{"abstract":"This paper proposes a firm-level mechanism that explains why exchange-rate regimes are largely neutral with respect to real macro variables: exporters actively adjust marginal costs and markups to absorb nominal exchange-rate fluctuations. We quantify this mechanism using micro-level data from the European car market (1970–99). We show that floating regimes are associated with limited adjustment in destination-currency prices and limited response in quantities sold. We then estimate a structural demand-and-supply system to recover product-level markups and marginal costs. At breaks from pegged to floating regimes, producer-currency markups fall on impact by around 11% and marginal costs by 10%. A two-country real business cycle model with segmented financial markets, incorporating pricing-to-market and operational hedging, rationalises these patterns. Our model underscores the role of real micro rigidities, rather than nominal rigidities, in the weak transmission of exchange-rate fluctuations to real macro variables.","also_at":[],"analysis":null,"authors":["Petracchi, Cosimo","Riva, Luca","Petterson, Marco S."],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"c06e6db922434eb4","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Explains weak exchange-rate transmission using firm-level data, informing monetary-policy and trade assessments.","screening_tag":"DM","selected_in":[],"source":"cbi","source_name":"Central Bank of Ireland","tag":"DM","tag_inferred":true,"title":"Exchange-Rate Regimes and the Behaviour of Exporters","url":"https://ideas.repec.org/p/cbi/wpaper/11-rt-26.html"},{"abstract":"Policies restricting gun sales face substantial political opposition and constitutional constraints. In this paper, we ask how costly it would be to induce potential hand-gun buyers to choose less lethal alternatives. Pairing stated-choice experiments with a behavioral model of firearm choice, we estimate the payments required to induce substitution away from handguns toward long guns or no gun purchase. We then compare these payments with the resulting mortality benefits. We find substantial gains from trade: many prospective handgun buyers require relatively little compensation to switch and targeted compensation can avert homicides at a social cost well below conventional estimates of the value of a statistical life. The extent to which these gains can be realized through compensation, however, depends on the state’s information about which consumers would change their choices and at what price. Without this information, uniform subsidies pay consumers who would choose an alternative anyway and overcompensate those willing to switch for less, sharply increasing government expenditure and reducing the optimal scale of compensation.","also_at":[],"analysis":null,"authors":["Bradley T. Shapiro","Sara Drango","Sarah Moshary"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"bf7abb6efd2f9c23","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Analyzes gun-policy compensation trade-offs, policy-oriented but limited macro/market impact.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Gains from Trade in Gun Policy: A Compensation-Based Benchmark","url":"https://ideas.repec.org/p/nbr/nberwo/35890.html"},{"abstract":"We build a model of two hegemons that have valuable trading relationships with each other and at the same time compete in exerting geoeconomic power over countries in the rest of the world. When the hegemons trade with each other, their optimal policy is shaped both by classic economic considerations - the profitability of that specific trade - and by geoeconomic competition - how the trade affects the power of each hegemon vis-a-vis the rest of the world. We show that containment, a policy mix in which a hegemon limits sales of its inputs to the rival hegemon and uses its power to demand that the rest of the world shift away from sourcing from the rival, arises when the two hegemons offer relatively substitutable exports, are less interdependent with each other, and have more direct geopolitical rivalry. Countries in the rest of the world benefit, all else equal, from hegemons containing each other since they partially squander their power with offsetting demands. However, containment policy can also worsen the efficiency of global production, leaving the rest of the world worse off.","also_at":[],"analysis":null,"authors":["Christopher Clayton","Matteo Maggiori","Jesse Schreger"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"bf02a2f1775bd4f1","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Models hegemonic geoeconomic competition, relevant for global policy and market power dynamics.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"The Great Game: A Model of Geoeconomic Competition","url":"https://ideas.repec.org/p/nbr/nberwo/35952.html"},{"abstract":"This paper studies how judicial ideology shapes financial markets' expectations about the macroeconomy. We use unexpected deaths of U.S. Supreme Court Justices as quasi-experimental shifts in the Court's ideological balance. High-frequency asset price responses reveal how markets perceive the macroeconomic consequences of these ideological shifts. We find that a more conservative Court is associated with lower inflation expectations, lower real activity expectations, and lower bond yields. A shift towards a more liberal Court induces the opposite responses. The finding that inflation and activity expectations respond with the same sign suggests that markets revise their expectations about aggregate demand, rather than aggregate supply. Moreover, contrasting the yield responses with estimates from studies of fiscal policy news indicates that a more conservative (liberal) Court leads markets to expect tighter (looser) future fiscal policy. We validate our quasi-experimental setup with sectoral asset price dynamics, such as high-frequency responses of clean energy and health care stocks. Taken together, our findings are consistent with markets interpreting changes in the Supreme Court's ideological composition as news about future fiscal expansions or contractions.","also_at":[],"analysis":null,"authors":["Thomas Drechsel","Naixin Zhang"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"ba9e0b5747f81cc4","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Quantifies how Supreme Court ideological shifts affect inflation, activity expectations, and bond yields, relevant for US market pricing.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Do Judges Move Markets? Ideological Shifts in the Supreme Court and Macroeconomic Expectations","url":"https://ideas.repec.org/p/nbr/nberwo/35895.html"},{"abstract":"Large language models (LLMs) have the potential to meet a key goal in economics: a quantitative model of household decision making, across a variety of settings. Yet existing evaluations cover few surveys and outcomes, and do not study how households adjust to changing economic conditions. We introduce a new evaluation, HouseholdBench, which unites 6 U.S. household surveys and 32 prediction tasks spanning numeric, categorical and probabilistic outcomes, related to consumption, income, labor, expectations, and housing. Using past behavior, demographics and macroeconomic conditions, the tasks test whether LLMs predict behavior, including how households adjust to changes in various policies. We evaluate 13 proprietary and open-weight LLMs against a no-change baseline and a gradient boosted tree model. Most LLMs outperform the no-change baseline, including for policy response tasks—with the best model lowering error for numeric outcomes by 12.2%. Across most tasks, gradient-boosted trees rank first; leading proprietary LLMs approach their performance, but open-weight models lag. LLMs exhibit systematic over- and underprediction across different tasks. We identify methods that enable a 4 billion parameter open-weight model to match proprietary models’ performance: fine-tuning and aggregating 16 predictions per observation. Improvements generalize to policy-response tasks, which are excluded from fine-tuning. We release our datasets, code, and leaderboard on our website.","also_at":[],"analysis":null,"authors":["Jin Huang","Diego Ferreras Garrucho","Yutong Xie","Walter M. Yuan","Qiaozhu Mei","Chen Lian","Jonathon Hazell"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"ba6c5bd40f7a5af3","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Evaluates LLMs for household behavior prediction; methodological relevance to forecasting, not direct market insight.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"HouseholdBench: Evaluating Large Language Models as Predictors of Household Economic Behavior","url":"https://ideas.repec.org/p/nbr/nberwo/35927.html"},{"abstract":"We analyze consumer surplus when a monopolist can adjust both prices and product qualities across segments, engaging in secondand third-degree price discrimination simultaneously. We characterize the consumer-optimal segmentation and show that it has a striking structure: Consumers with the same value receive the same quality in every segment, though prices differ. Under mild conditions, any segmentation harms consumers if and only if demand is sufficiently more elastic than supply. Hence, potential benefits for consumers depend critically on demand and supply elasticities. These findings have implications for regulatory policy regarding price discrimination and market segmentation. (JEL D42, D83, K21, L12, L15)","also_at":[],"analysis":null,"authors":["Dirk Bergemann","Tibor Heumann","Michael C. Wang"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20250206","doi_registered":"2026-10-01","flags":[],"group":"journal","id":"b9f763e3446422e0","issue_date":"2026-10-01","kind":"journal","publication_month":"2026-10","relevance":3,"screen_reason":"Analyzes consumer surplus and regulation of price discrimination, limited macro or market impact.","screening_tag":"Transversal","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"Transversal","tag_inferred":false,"title":"Screening and Segmenting: A Consumer Surplus Perspective","url":"https://doi.org/10.1257/aer.20250206"},{"abstract":"How leaders allocate their limited time and attention is an important question in economics. This paper constructs and analyzes a novel data set covering the daily calendars of three Federal Reserve Chairs, Ben Bernanke, Janet Yellen, and Jerome Powell, containing more than 20,000 calendar entries. We document several patterns. First, all Fed Chairs spend more than 30% of their documented meetings with Fed staff, highlighting the crucial role of economists in the Fed's decision process. Second, interactions with the media became more frequent during Bernanke's tenure and remained important until the end of Powell's tenure. Third, Powell held significantly more meetings with lawmakers than both Yellen and Bernanke, reflecting an increasing need for the Fed to engage with political actors. Beyond these trend patterns, we examine the time allocation of Fed Chairs at business cycle frequencies and show how different activities respond to shifts in the macroeconomic environment. Finally, we place our findings in historical context using the available calendars of earlier Fed Chairs, including Alan Greenspan.","also_at":[],"analysis":null,"authors":["Thomas Drechsel","Dali Tsakadze"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"b92cd6b5e3c61d5a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Describes Fed chairs' time use; interesting but limited immediate market or policy impact.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Inside Central Bankers’ Calendars: How Do Fed Chairs Allocate Their Time?","url":"https://ideas.repec.org/p/nbr/nberwo/35913.html"},{"abstract":"We develop a decomposition of debt-to-GDP dynamics that distinguishes infla tion compensation, real interest rates, and compensation for bearing interest-rate and sovereign risk. Using security-level data from the Eurosystem’s Securities Hold ings Statistics, we apply it to the five largest euro-area sovereign issuers. We find that low ex ante real interest rates relative to real GDP growth substantially re duced debt ratios, whereas short-term inflation surprises contributed only modestly. Compensation for interest-rate and sovereign risk was economically important and varied markedly across countries and over time. News about future inflation gen erated sizeable return surprises, driving a wedge between realised returns and the compensation for interest-rate risk priced ex ante. Finally, central-bank bond hold ings transferred interest-rate and sovereign-risk exposure from private investors to the consolidated public sector. This transfer initially reduced consolidated debt ratios, but subsequently raised them as policy rates and bond yields increased.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"the five largest euro-area sovereign issuers","flags":[],"in_issue":false,"rationale":"The abstract references the euro area and Eurosystem, which are advanced-economy institutions.","relevance_note":"Understanding how real rates, inflation surprises, and risk compensation affect public debt helps policymakers gauge the fiscal impact of monetary conditions and central-bank balance-sheet actions.","summary":"The paper builds a debt-to-GDP decomposition that separates inflation compensation, real interest rates, and risk compensation, and applies it to the five biggest euro-area sovereign issuers. It finds that low ex-ante real interest rates relative to growth cut debt ratios, while short-term inflation surprises had modest effects, and risk compensation was economically significant and varied across countries and time.","takeaways":["Low ex-ante real interest rates relative to real GDP growth substantially reduced debt ratios","Short-term inflation surprises contributed only modestly to debt dynamics","Compensation for interest-rate and sovereign risk was economically important and varied across countries","Central-bank bond holdings first lowered, then raised consolidated debt ratios as policy rates and yields rose"],"wording_correction":null},"authors":["Jef Boeckx","Leonardo Iania","Joris Wauters"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"afa4af0daa6b8a1a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Decomposes Euro-area debt dynamics, directly relevant to sovereign risk and policy decisions.","screening_tag":"DM","selected_in":[],"source":"nbb","source_name":"National Bank of Belgium Working Papers","tag":"DM","tag_inferred":false,"title":"A New Decomposition of Public Debt Dynamics in the Euro Area","url":"https://ideas.repec.org/p/nbb/reswpp/202610-497.html"},{"abstract":"We develop a framework to quantify how tariff changes on imported goods affect sectoral and aggregate consumption prices through direct and production-network channels. Using Canada's input-output matrix and administrative firm-good import data for the universe of Canadian firms, we estimate price elasticities for tariffs on U.S.-imported goods. Tariffs on machinery and equipment and transport equipment generate the largest effects on final prices, reflecting their widespread use as intermediate inputs. On average, two-thirds of the total price response stems from higher intermediate input costs passing through domestic supply chains. Applying the framework to Canada's 2025 counter-tariffs, we estimate consumption price increases of 1.56 and 0.72 percentage points for the pre- and post-September 2025 phases, respectively; alternative packages of equal import value could reduce aggregate price effects by three to seven times. A hypothetical CUSMA breakdown reverting to MFN tariffs would raise final-good prices by 0.64 percentage points.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"Using Canada's input-output matrix and administrative firm-good import data for the universe of Canadian firms","flags":[],"in_issue":true,"rationale":"The abstract explicitly references Canada and U.S.-imported goods, tying the analysis to a specific advanced economy.","relevance_note":"Policymakers and market participants can gauge how tariff adjustments and trade-policy shifts may feed through supply chains to affect consumer price inflation in Canada and potentially influence monetary policy considerations.","summary":"The paper builds a framework to quantify how tariffs on imported goods affect consumer prices directly and through production networks. Using Canada's input-output matrix and firm-level import data, it finds that most of the price response comes from higher intermediate input costs, and estimates the consumption price effects of Canada's 2025 counter-tariffs.","takeaways":["Tariffs on machinery and equipment and transport equipment have the largest effects on final prices.","About two-thirds of the total price response stems from higher intermediate input costs passing through domestic supply chains.","The authors estimate consumption price increases of 1.56 and 0.72 percentage points for the two phases of Canada's 2025 counter-tariffs.","A hypothetical CUSMA breakdown reverting to MFN tariffs would raise final-good prices by 0.64 percentage points."],"wording_correction":{"checked":"2026-11-01","human_reviewed":true,"made_by":"Claude (AI assistant)","reason":"The model called the 2025 counter-tariffs \"proposed\"; the abstract treats them as Canada's 2025 counter-tariffs and gives estimates for their two phases.","source":"Abstract of the Bank of Canada working paper"}},"authors":["Christian Bustamante","Xing Guo","Lu Han","Soyoung Lee","Gaelan MacKenzie","Mariel Yacolca Maguiña","Jacob Short"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"af2d4df42943312a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":10,"screen_reason":"This paper quantifies the impact of retaliatory tariffs on consumption prices via production networks, offering direct implications for trade policy and inflation analysis.","screening_tag":"DM","selected_in":["2026-10"],"source":"boc","source_name":"Bank of Canada Staff Working Papers","tag":"DM","tag_inferred":false,"title":"The Production Network Amplification of Retaliatory Tariffs","url":"https://ideas.repec.org/p/bca/bocawp/26-35.html"},{"abstract":"PredictIt is a CFTC-regulated US prediction market focused on political outcomes. It was very successful in attracting participants in the 2016-22 period, running liquid markets on topics predecessors had tried unsuccesfully. During this period, investors were limited to $850 positions in each contract, which limited arbitrage trading. PredictIt exhibited much larger pricing biases than previously studied prediction markets. Bid prices often persistently added to more than 110, implying an immediate arbitrage profit even after fees. Prices exhibited an overpricing of longshots that was larger than in other prediction markets. The experience of PredictIt suggests that limiting stakes may undermine the ability of prediction markets to accurately price event probabilities.","also_at":[],"analysis":null,"authors":["Eric Zitzewitz"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"acdab0027f320bc5","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"Studies prediction-market arbitrage limits, a niche market mechanism with minor macro relevance.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Limits to Arbitrage and Prediction Market Efficiency: the Case of PredictIt","url":"https://ideas.repec.org/p/nbr/nberwo/35845.html"},{"abstract":"This paper develops a dynamic general equilibrium model in which energy-transition metals are essential inputs into both production and capital accumulation, while their supply capacity adjusts endogenously and gradually. The green transition shifts investment toward metal-intensive green technologies, generating bottlenecks that depress investment and potential output. Nominal rigidities amplify short-run losses while monetary-policy stabilization faces a trade-off: supporting economic activity raises demand for scarce transition inputs, increasing their relative prices and the cost of investment. Climate-policy continuation risk further increases transition costs by weakening investment in green capital and ETM production capacity, making bottlenecks more persistent and raising long-run output losses. We compare taxes and subsidies targeting sectoral output with those targeting metal use. Targeting metal use can reduce transition costs relative to output-based policies when metals enter production and demand is sufficiently elastic. When metals enter capital accumulation and demand is inelastic, however, taxing brown-sector metal use slows the transition and increases its macroeconomic costs because the policy raises investment costs while releasing few metals for green investment. Our findings show how endogenous metal-supply adjustment, policy credibility, and the choice of tax and subsidy bases jointly shape the macroeconomic consequences of the green transition.","also_at":[],"analysis":null,"authors":["Romain Houssa","Jolan Mohimont"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"ac203862e0ec4265","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Analyzes metal bottlenecks in green transition, affecting global investment and monetary policy trade-offs.","screening_tag":"Transversal","selected_in":[],"source":"nbb","source_name":"National Bank of Belgium Working Papers","tag":"Transversal","tag_inferred":false,"title":"The macroeconomics of energy-transition metal bottlenecks","url":"https://ideas.repec.org/p/nbb/reswpp/202610-502.html"},{"abstract":"This paper investigates how the expansion of social insurance affects households’ accumulation of debt. Insurance can reduce reliance on debt by lessening the financial impact of adverse events such as illness and job loss. But it can also weaken the motive to self-insure through savings, and households’ improved financial resilience can increase access to credit. Using data on 10 million people and a quasi-experimental research design, we estimate the causal effect of expanded insurance on household debt, exploiting ZIP-level heterogeneity in exposure to the staggered expansions of one of the largest US social insurance programs: Medicaid. We find that a 1 percentage point increase in a ZIP code’s Medicaid-eligible population increases credit card borrowing by 0.38%. Decomposing this effect in a model of household borrowing, we show that increased credit supply in response to households’ improved financial resilience drives the rise in borrowing and contributes 30% of the net welfare gains of expanding Medicaid.","also_at":[],"analysis":null,"authors":["Gideon Bornstein","Sasha Indarte"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"a93dda7065b604ad","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Shows Medicaid expansion raises credit card borrowing, directly linking social policy to US credit markets.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"The Impact of Social Insurance on Household Debt","url":"https://ideas.repec.org/p/nbr/nberwo/35908.html"},{"abstract":"We study how the shale revolution and the U.S. transition from petroleum importer to net exporter have changed the macroeconomic effects of oil shocks. Using oil supply news shocks identified from OPEC announcements, a time-varying model of the U.S. macroeconomy shows that the contractionary effects weakened over time and eventually became expansionary. State-dependent local projections link this change to the U.S. petroleum trade balance. The improvement goes beyond mechanical net export effects: as the terms-of-trade response turns more favorable, consumption, equity valuations, and activity strengthen broadly across sectors and regions, pointing to general-equilibrium income and wealth effects. A counterfactual analysis of the 2022 oil price surge implies sharply different paths for U.S. activity, prices, and monetary policy under the propagation mechanisms prevailing before the shale boom vs. the early 2020s.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"U.S. economy","flags":[],"in_issue":false,"rationale":"The abstract explicitly studies the U.S. economy and its petroleum trade balance.","relevance_note":"Understanding how oil-price shocks now affect U.S. output and inflation helps policymakers and market participants gauge monetary-policy responses and asset-price dynamics.","summary":"The paper examines how the U.S. shift from oil importer to net exporter altered the macroeconomic impact of oil supply news shocks, finding that these shocks moved from contractionary to expansionary over time. It links this shift to changes in the petroleum trade balance and more favorable terms-of-trade, affecting consumption, equity values and broader activity.","takeaways":["Contractionary oil supply shocks weakened and turned expansionary as the U.S. became a net exporter","Improved terms-of-trade boosted consumption, equity valuations, and activity across sectors","State-dependent projections tie the change to the U.S. petroleum trade balance","Counterfactual for 2022 shows different outcomes under pre-shale versus early-2020s mechanisms"],"wording_correction":null},"authors":["Diego R. Känzig","James H. Stock","Luca Zanotti"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"a908ef9ab73e9277","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Links US shale-driven export shift to changing oil-shock transmission, crucial for US macro and equity market forecasts.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"From Importer to Exporter: Oil Shocks and the U.S. Economy","url":"https://ideas.repec.org/p/nbr/nberwo/35864.html"},{"abstract":"Area-level measures of economic opportunity are increasingly used to guide place-based policies. We study whether these measures predict long-run outcomes for a vulnerable population: over 12,000 refugee children quasi-randomly assigned to municipalities under Denmark's 1986–1998 dispersal policy. We focus on predetermined measures of opportunity available when children arrive and validate them using a mover-exposure design among permanent residents. Moving from a low- to a high-opportunity area (a two-standard-deviation increase) raises adult income rank by 3 percentile points (7.5 percent) and employment by 4 percentage points. It also reduces criminal convictions by 14 percent and teen parenthood by 19 percent, with more modest effects on educational attainment. Economic opportunity predicts crime and teen parenthood more strongly than other area characteristics, including local crime rates. For adult income, area-level inequality is a particularly strong predictor. These findings suggest that social mobility in the areas where refugee children grow up meaningfully shapes their long-term wellbeing.","also_at":[],"analysis":null,"authors":["N. Meltem Daysal","Joseph J. Doyle Jr.","Naeim S. Samandari","Emil A. L. Simonsen","Mircea Trandafir"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"a889f7c62f3b6739","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Analyzes refugee children outcomes, offering limited insight for macro-economic or market analysis.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Randomized to Opportunity: Measuring Place Effects for Refugee Children","url":"https://ideas.repec.org/p/nbr/nberwo/35853.html"},{"abstract":"Expanding access to financial services may not be enough to develop markets in low-income settings: providers also need to be held accountable to consumers. We test this in a field experiment across 195 rural Sierra Leonean communities, upgrading Village Savings and Loan Associations (VSLAs) into mobile money and bank agents, cross-randomized with a monthly consumer feedback mechanism. Upgrading expands access, but feedback drives large operational improvements (+20.5 pp, 85%), particularly in privacy and consumer protection, raising usage and revenues. Upgraded VSLAs also show higher savings digitization and higher incomes, evidence that disciplining agent actions benefits not only consumers but also the principal that finances and stands behind its agent. Interpreted through a framework of delegated intermediation, we show accountability, not infrastructure alone, aligns provider incentives with consumer welfare and is central to designing scalable financial intermediaries.","also_at":[],"analysis":null,"authors":["Francis Annan","Seth Garz"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"a6cc7818913ced38","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Experiment on financial market upgrades in Sierra Leone, informs emerging-market financial inclusion and regulation.","screening_tag":"EM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":true,"title":"Upgrading Financial Markets","url":"https://ideas.repec.org/p/nbr/nberwo/35912.html"},{"abstract":"This paper examines the response of income inequality to commodity price shocks and identifies the underlying mechanisms at play. I provide novel cross-country evidence from commodity-exporting nations, showing that positive commodity price shocks reduce labor income inequality between skilled and unskilled workers. This reduction in inequality is primarily driven by a fall in the skill premium, arising from the expansion of unskilled-labor-intensive sectors, such as construction, which grow more rapidly than skilled-labor-intensive ones, such as services. To interpret these results, I develop a quantitative multisector small-open-economy model that incorporates sectoral heterogeneity in both skilled-labor intensity and sensitivity to commodity price shocks. I use the model as a laboratory to explore the distributional impacts of various policy responses to commodity windfalls, demonstrating how saving or spending these gains can either reinforce or moderate the reduction in inequality. This analysis provides new insights into the broader economic and social impacts of commodity price shocks in emerging markets.","also_at":[],"analysis":null,"authors":["Emilio Colombi"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"a5ff488a30e8fee6","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Shows commodity price shocks reduce inequality in commodity-exporting emerging markets.","screening_tag":"EM","selected_in":[],"source":"boc","source_name":"Bank of Canada Staff Working Papers","tag":"EM","tag_inferred":false,"title":"The Distributional Consequences of Commodity Booms","url":"https://ideas.repec.org/p/bca/bocawp/26-38.html"},{"abstract":"We propose a general equilibrium model in which U.S. monetary policy affects global risk premia by revaluing the wealth of currency-mismatched arbitrageurs. Assuming their portfolios are mean-variance efficient, arbitrageurs must be short the dollar. A U.S. tightening thus erodes arbitrageurs' net worth and raises the global price of risk. We discipline this mechanism to rationalize the effects of U.S. monetary policy on international asset prices, and we quantify the associated macroeconomic spillovers and role of policy responses abroad. In a potential future with higher dollar interest rates, arbitrageurs' dollar funding and U.S. monetary policy spillovers are dampened.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"U.S. monetary policy affects global risk premia","flags":[],"in_issue":false,"rationale":"The abstract explicitly references U.S. monetary policy and the dollar, tying the analysis to the United States.","relevance_note":"Understanding how U.S. policy influences global risk premia helps policymakers gauge international spillovers and informs investors about cross-border asset price dynamics.","summary":"The paper builds a general-equilibrium model where U.S. monetary tightening reduces the net worth of currency-mismatched arbitrageurs, raising global risk premia. It uses this mechanism to explain how U.S. policy moves international asset prices and to quantify macro spillovers and foreign policy responses.","takeaways":["U.S. tightening erodes arbitrageurs' net worth and raises the global price of risk.","Arbitrageurs are modeled as short the dollar due to mean-variance efficient portfolios.","The model quantifies macroeconomic spillovers from U.S. policy to international asset prices.","Higher future dollar rates would dampen arbitrageurs' dollar funding and U.S. spillovers."],"wording_correction":null},"authors":["Rohan Kekre","Moritz Lenel"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"a513eb917be5a408","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Model links US monetary policy to global risk premia, clear implications for international asset markets.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"A Model of U.S. Monetary Policy and the Global Financial Cycle","url":"https://ideas.repec.org/p/nbr/nberwo/35902.html"},{"abstract":"Decentralised finance data presents a distinctive paradox: while every data point is publicly recorded and accessible, deriving meaningful insights is obscured by the scale, fragmentation and complexity of the ecosystem. Key metrics illustrate that the rapidly evolving DeFi ecosystem introduces unique challenges for economic and financial research in accurately capturing financial activity in DeFi. These challenges stem from protocol architecture and the technical execution of transactions that complicate deriving economic meaning. Leveraging blockchain data for Bitcoin, Ethereum and Tron, the paper illustrates three structural sources of measurement divergences: (1) the economically meaningful aggregation of Bitcoin transaction values, (2) the challenge of programmability and proliferation of spurious smart contracts and (3) comparability of use cases across different chains, exemplified by stablecoins. While the examples relate to specific chains and layers of technical execution, the measurement challenges generalise to all blockchains and DeFi ecosystems relying on a similar technical underpinning. We propose measurement approaches based on granular, data bounded estimates that incorporate explicit assumptions, technical classification and disaggregation to align technical execution with economic meaning. The paper demonstrates that, despite the transparency of public blockchains, widely used indicators of cryptoasset and DeFi activity are highly dependent on methodological choices and underlying assumptions that warrant careful interpretation. The findings imply that on-chain indicators should be treated as noisy approximations rather than direct measures of economic activity.","also_at":["https://ideas.repec.org/p/bis/biswps/1377.html"],"analysis":null,"authors":["Timothy Aerts","Ronald Heijmans","Violeta Vuletic","Jan Paulick"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"a46cc948ab4cb268","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"The paper addresses critical measurement challenges in DeFi and crypto markets, which are increasingly important for financial stability and market monitoring.","screening_tag":"Transversal","selected_in":[],"source":"dnb","source_name":"De Nederlandsche Bank Working Papers","tag":"Transversal","tag_inferred":false,"title":"Hidden by complexity? Measuring stablecoin, crypto and decentralised finance ecosystems","url":"https://ideas.repec.org/p/dnb/dnbwpp/870.html"},{"abstract":"Many large, publicly-traded companies adopt voluntary greenhouse gas emission reduction commitments in the presence of a fragmented public policy landscape. To explore the potential emission implications of such commitments, we develop a framework for understanding how firms’ voluntary emission targets interact with carbon pricing, regulatory mandates, subsidies, and heterogeneous policies across political jurisdictions. This analysis highlights the difficulty of distinguishing incremental voluntary emission abatement from policy-induced emission reductions. We introduce the Salata Institute Corporate Climate Targets Database, which we produced from public domain reports published by Russell 3000 firms over 2000-2024. The database documents the growth, form, scope, and sectoral distribution of voluntary greenhouse gas emission targets, including net-zero, carbon-neutral, carbon-reduction, energy-related, and qualitative commitments. Comparing this database with CDP, a non-profit organization formerly known as the Carbon Disclosure Project and the most common source of corporate emission targets used in the research literature, reveals substantial omissions in their survey-based data, especially in recent years. We show that voluntary corporate targets often mirror government-established goals and public policies, and some firms benchmark their internal carbon prices to existing carbon taxes and emission trading systems. The paper concludes by outlining empirical challenges and future research needs for evaluating the emission impacts of voluntary commitments.","also_at":[],"analysis":null,"authors":["Joseph E. Aldy","Michael W. Toffel","Alison J. Ong","Lavender Yang"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"9fff86b14a727ad5","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Documents voluntary corporate climate commitments, informing policy-related ESG investment and regulatory risk assessments.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Voluntary Corporate Climate Targets in a Patchwork Policy Landscape","url":"https://ideas.repec.org/p/nbr/nberwo/35869.html"},{"abstract":"An AI productivity boom can warrant lower nominal rates even when most gains are anticipated. I derive analytical representations of optimal rates under commitment and discretion in an economy with sticky prices and wages and hand-to-mouth households. Holding the realized productivity path fixed, I vary expectations. Anticipated gains raise the natural rate, but below-target inflation supports real wages and keeps nominal rates lower. Surprises leave the natural rate unchanged, calling for cuts. After surprises, expected redistribution toward hand-to-mouth households calls for deeper rate cuts to sustain savers’ spending. Raising rates requires more anticipation when wages are stickier relative to prices.","also_at":[],"analysis":null,"authors":["Alessandro Villa"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"9c476ccba0ad18f4","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Theoretical model of AI-driven productivity and optimal rates, relevant for future monetary policy outlook.","screening_tag":"DM","selected_in":[],"source":"fed-chicago","source_name":"Federal Reserve Bank of Chicago","tag":"DM","tag_inferred":true,"title":"AI, Expectations, and Optimal Interest Rates","url":"https://ideas.repec.org/p/fip/fedhwp/103965.html"},{"abstract":"Cross-border payments remain slow and expensive despite significant improvements in digital financial infrastructure over the past several decades. This paper compares the cost of sending cross-border payments across three payment rails: traditional banks operating through the correspondent banking system and SWIFT, fintech money trans fer operators (MTOs) such as Wise, Remitly, and the digital arm of Western Union, and stablecoin-based transfers. We construct harmonized all-in costs measures across these three rails for different corridors and payment values. We find that fintech MTOs have significantly compressed the costs of cross-border payments, and demonstrate that stablecoins are not a panacea for frictions in cross-border payments.","also_at":[],"analysis":null,"authors":["Wenxin Du","Catherine Huang","David Scharfstein"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"96b22ea9c7073135","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Compares costs of cross-border payment rails, informing global payments market and fintech strategy.","screening_tag":"Transversal","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"Transversal","tag_inferred":false,"title":"Competing rails for crossborder payments: banks, fintechs, and stablecoins","url":"https://ideas.repec.org/p/bis/biswps/1385.html"},{"abstract":"This paper studies how China uses access to public equity markets as an instrument of industrial policy. We find that policy-favored status, rather than industry Tobin's Q, predicts IPO activity, in contrast to the United States. The effect is economically large: our estimates imply that favored industries had 287% more IPOs and 148% higher IPO proceeds than non-favored industries over 2002 to 2022. We develop a framework to interpret these findings: the government shapes the number of listing opportunities available across industries, while market forces determine which firms obtain these opportunities based on firm fundamentals. Consistent with our framework, policy favor also predicts a valuation premium which persists after listing.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"China uses access to public equity markets as an instrument of industrial policy","flags":[],"in_issue":false,"rationale":"The abstract explicitly studies China, an emerging-market economy.","relevance_note":"Understanding how government-directed market access influences IPO volume and pricing helps policymakers assess the impact of industrial policy on capital markets, and informs investors about sectoral biases in Chinese listings.","summary":"The paper examines how China employs public equity market access as an industrial policy tool, showing that policy-favored status, not industry Tobin's Q, drives IPO activity. It finds favored industries had 287% more IPOs and 148% higher proceeds from 2002-2022, and enjoy a persistent valuation premium after listing.","takeaways":["Policy-favored status predicts IPO activity in China, unlike industry Tobin's Q.","Favored industries generated 287% more IPOs than non-favored ones (2002-2022).","IPO proceeds were 148% higher for favored industries over the same period.","A valuation premium for policy-favored firms persists after listing."],"wording_correction":null},"authors":["Zhiguo He","Yiming Qian","Xi Sun","Wang Renxuan"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"963b4526c27b46f6","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Shows how Chinese industrial policy via IPOs drives market activity, directly relevant to emerging-market equity outlooks.","screening_tag":"EM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":false,"title":"Industrial Policy via the IPO Market","url":"https://ideas.repec.org/p/nbr/nberwo/35889.html"},{"abstract":"We estimate the macroeconomic effects of defence expenditure using a novel dataset covering the universe of defence procurement contracts in Spain over 30 years. Our defence procurement data overcomes identification challenges posed by implementation lags inherent in traditional government spending, as contracts are awarded years before production begins and spending is recorded in government national accounts only upon delivery. Using local projections, we find that GDP effects take time to materialise, become sizeable, but remain transitory. That is, while defence investment has relevant economic consequences, these are bound to occur in the medium run insofar as the spending process is hindered by implementation lags. A DSGE model calibrated to our empirical setting yields two main findings. First, reducing implementation lags to US levels would meaningfully frontload the macroeconomic effects. Second, defence spending delivers more transient and smaller long-run effects than general public investment projects.","also_at":[],"analysis":null,"authors":["Mario Alloza","Rubén Domínguez-Díaz","Pau Durá","Iacopo Varotto"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"94e40c58db4ebf79","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Quantifies defence spending effects on Spanish GDP, relevant for fiscal policy but narrowly scoped.","screening_tag":"DM","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"DM","tag_inferred":false,"title":"The Macroeconomic Effects of Defence Expenditure: Evidence from Spain","url":"https://ideas.repec.org/p/bde/wpaper/2637e.html"},{"abstract":"We establish a link between labor scarcity and the adoption of laborsaving technology in industrializing England. During the Napoleonic Wars, more than 10 percent of the male population served in the armed forces. Where recruitment was heavy, more machines economizing on labor were adopted. Naval recruitment, instrumented by warships' coastal access, provides exogenous variation in labor scarcity and suggests that the link between labor shortages and adoption is causal. Where mechanical skills were abundant, the impact of labor scarcity on adoption appears to be larger. (JEL J24, N13, N43, N63, N73, O14, O31)","also_at":[],"analysis":null,"authors":["Hans-Joachim Voth","Bruno Caprettini","Alex Trew"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20240393","doi_registered":"2026-10-01","flags":[],"group":"journal","id":"9462ee2a33e02e2c","issue_date":"2026-10-01","kind":"journal","publication_month":"2026-10","relevance":2,"screen_reason":"Historical analysis of labor scarcity and technology, limited immediate market or policy impact.","screening_tag":"Transversal","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"Transversal","tag_inferred":false,"title":"Fighting for Growth: Labor Scarcity and Technological Progress during the British Industrial Revolution","url":"https://doi.org/10.1257/aer.20240393"},{"abstract":"High-frequency interest rate surprises around Fed announcements do not identify monetary policy (MP) shocks if markets are imperfectly informed. Instead, they can also reflect central bank information (CBI) shocks, when the Fed assesses the economy differently, and Fed-response-to-news (FRN) shocks, when markets misperceive the policy rule. The literature treats these as competing explanations; we show they are distinct, and jointly identify all three from the co-movement of interest rate and equity surprises, their predictability from public news, and heteroskedasticity between FOMC and non-FOMC communication. CBI effects are robust at daily and monthly frequencies; FRN matters only daily. Purging both strengthens monetary policy estimates.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"the Fed assesses the economy differently, and Fed-response-to-news (FRN) shocks","flags":[],"in_issue":false,"rationale":"The abstract explicitly references the Fed and FOMC, which are U.S. institutions.","relevance_note":"Understanding the composition of rate surprises helps policymakers and market participants better gauge the true impact of Fed actions on financial markets.","summary":"The paper shows that high-frequency interest-rate surprises around Federal Reserve announcements mix three distinct shocks—monetary-policy, central-bank-information, and Fed-response-to-news—rather than identifying pure policy shocks. By using the joint behavior of rate and equity surprises, news predictability, and differing volatility across FOMC and non-FOMC communications, the authors separate and estimate all three components.","takeaways":["Interest-rate surprises reflect monetary-policy, CBI, and FRN shocks simultaneously.","CBI shocks are robust at both daily and monthly frequencies.","FRN shocks matter only at the daily frequency.","Removing CBI and FRN shocks strengthens monetary-policy effect estimates."],"wording_correction":null},"authors":[],"date":"2026-10-01","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"92dc59d1576e1b3a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Identifies distinct monetary policy shocks, directly informing Fed policy and market expectations.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Monetary policy surprises with imperfect information","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3292~76d878a0cf.en.pdf"},{"abstract":"Market power may arise not only from firms, but also from individual salespeople who can exploit informational advantages over consumers. We explore this phenomenon in the mortgage market by examining a Fannie Mae/Freddie Mac fee waiver targeted at lower-income first-time homebuyers. We estimate that mortgage intermediaries capture over 60% of $1.5 billion in total fee waivers during 2023–2024, rather than fully passing these savings through to borrowers. Pass-through varies substantially across loan officers: those with a track record of originating expensive mortgages (independent of lender pricing) pass through less than 20% of the waiver. Our evidence suggests that loan officers retain incentives to steer borrowers into higher-rate mortgages, despite post-crisis regulations designed to limit such practices.","also_at":[],"analysis":null,"authors":["Neil Bhutta","Benjamin J. Keys","Adithya Raajkumar"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"925160cc9c8a9917","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Evidence of mortgage-intermediary pricing power, directly relevant to US housing market and regulation.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Pricing Power in the Mortgage Market: Evidence from GSE Fee Waivers","url":"https://ideas.repec.org/p/nbr/nberwo/35907.html"},{"abstract":"Abstract People may fail to recall and use information they already know when making decisions. We empirically investigate whether such “retrieval failures” distort consumption-smoothing behavior among Zambian farmers, who derive their income from one annual harvest and spend it over the course of the year. We document that individuals underestimate upcoming spending by 50%, creating scope for undersaving. To improve recall, we randomize an intervention that prompts people to think through their future expenses associatively in categories—without providing any external information or guidance. Treated individuals increase “remembered” expenses by 36%–60%; as predicted by the memory literature, effects are concentrated among small, irregular, and stochastic items. Immediate spending drops and, six weeks after the intervention, treated households hold 15% higher savings. They subsequently enter the hungry season—the final months of the year when consumption typically declines sharply—with one additional month of savings, leading to a flatter spending profile over the year. Households use the increased savings to self-finance additional farm investment, resulting in a 9% increase in the next year’s crop revenue. We replicate the intervention’s effect on beliefs among low-income Americans, suggesting that retrieval failures generalize across settings and populations.","also_at":[],"analysis":null,"authors":["Ned Augenblick","Brooke Kelsey Jack","Supreet Kaur","Felix Masiye","Nicholas Swanson"],"date":"2026-10-01","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/qje/qjag035","doi_registered":"2026-10-01","flags":[],"group":"journal","id":"913fc0d1fb0f9644","issue_date":"2026-10-12","kind":"journal","publication_month":"2026-10","relevance":4,"screen_reason":"Field experiment on savings behavior in Zambia, tangential to macro policy but limited market impact.","screening_tag":"EM","selected_in":[],"source":"qje","source_name":"Quarterly Journal of Economics","tag":"EM","tag_inferred":false,"title":"Retrieval Failures and Consumption Smoothing: A Field Experiment on Seasonal Poverty","url":"https://doi.org/10.1093/qje/qjag035"},{"abstract":"The maturity of government debt affects inflation when bond-market arbitrage is limited. We develop a tractable model in which risk-averse arbitrageurs absorb duration risk, generating a term premium that rises with the supply of long-term debt. Lengthening maturity therefore raises the return on government debt relative to the policy rate. We show analytically that the resulting inflation dynamics depend on the monetary–fiscal regime. Under monetary dominance, inflation falls at every horizon despite monetary easing. Under fiscal dominance, inflation falls on impact but later turns positive, leaving the price level permanently higher. Lower bond prices require the initial deflation to maintain fiscal solvency, while higher borrowing costs eventually require inflation. In a calibrated New Keynesian model, a persistent lengthening of debt duration by one month raises the term premium by 17 basis points, lowers inflation by almost 0.2 percentage points, and contracts output under both regimes. Inflation takes around five years to turn positive under fiscal dominance.","also_at":[],"analysis":null,"authors":["Artur Doshchyn","Martin Ellison","Rigas Oikonomou"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"8a5264bf72bca17e","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Shows how debt maturity influences inflation under different fiscal-monetary regimes, key for sovereign risk assessment.","screening_tag":"DM","selected_in":[],"source":"nbb","source_name":"National Bank of Belgium Working Papers","tag":"DM","tag_inferred":true,"title":"Debt Maturity, Term Premia, and Fiscal Inflation","url":"https://ideas.repec.org/p/nbb/reswpp/202610-498.html"},{"abstract":"How competitive will the market for generative AI be as it matures? Using novel transaction level credit and debit card data covering 174 million consumers and 114 billion transactions, we study the adoption of paid services and the demand-side foundations of competition in this market. As of April 2026, approximately 2.9% of U.S. consumers pay for at least one major generative AI service, with adoption highest among younger and higher-income consumers. Nearly all of these paid users subscribe to basic plans that cost $30 or less per month. Three patterns suggest limited differentiation and low switching costs. First, although multihoming is common, it has declined as providers’ capabilities have expanded. Second, annual customer retention rates range from 20% to 45% across major AI providers, lower than those for many other subscription products. Third, switching rises around major model releases. Motivated by these findings, we develop and estimate a structural model of AI service demand and supply that reveals strong competitive pressure. Consumers are highly price sensitive, have much weaker preferences for particular providers than for AI overall, and view AI services as increasingly close substitutes. Our results suggest that, absent a substantial increase in AI model quality differentiation, growing substitutability among services will constrain providers’ pricing power and allow consumers to capture a large share of the surplus generated by these services.","also_at":[],"analysis":null,"authors":["Mark L. Egan","Dominic Russel","Claire Shi","Vincent Yao"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"84e367ea738146be","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Provides demand-side evidence on generative AI competition, relevant for tech-sector investment outlooks.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Competition in Generative AI: Evidence from Consumer Demand","url":"https://ideas.repec.org/p/nbr/nberwo/35953.html"},{"abstract":"Credit constraints and other demand distortions are pervasive in lower-income contexts. A model of clean technology adoption shows that demand distortions can increase the welfare gains from green subsidies. This arises through two channels: shifting the marginal adopter toward higher private and social benefits, and increasing demand elasticity. We test this by cross-randomizing purchase price subsidies, usage subsidies, and access to an interest-free loan for a US$84 induction stove among 2,134 charcoal users in Kenya. Usage subsidies of 75% have a precise zero effect on adoption and usage. Purchase price subsidies, however, generate large welfare gains. Credit constraints raise the subsidy’s efficacy by 35%–73%, up to US$10–US$12 in observable welfare gain per subsidy dollar. This demand distortion also lowers the subsidy cost of abatement by 41%, to US$12 per tCO2e. This operates through the two channels identified in the theory: credit constraints raise the marginal adopter’s positive externality by 19% and fuel savings by 30%, and lower the subsidy cost per marginal adoption by 29%. In a counterfactual without demand distortions, the abatement cost rises to US$137 per tCO2e. Contexts with large demand distortions could offer many cost-effective opportunities for climate change mitigation financing.","also_at":[],"analysis":null,"authors":["Susanna B. Berkouwer","Joshua T. Dean"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"8360eb869db91fee","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Field experiment on green subsidies in Kenya, informs emerging-market policy and welfare impacts.","screening_tag":"EM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":false,"title":"Green Subsidies with Demand Distortions","url":"https://ideas.repec.org/p/nbr/nberwo/35911.html"},{"abstract":"We characterize equilibria in a canonical class of economies with endogenous production networks, showing that log-prices equal a min-max over networks of a primitive affine function of log-productivities. This formula captures how resilience and fragility interact: the \"min\" reflects resilience from substituting suppliers, while the \"max\" reflects fragility from complementarity-induced rigidity. Applying these results, we generalize Hulten's theorem, finding that local Domar weights are generally insufficient to describe propagation of even small shocks. Moreover, we characterize how microeconomic volatility affects GDP, finding that smooth changes in Domar weights overstate its adverse effects by omitting option value from switching suppliers.","also_at":[],"analysis":null,"authors":["Simone Cerreia-Vioglio","Roberto Corrao","Joel P. Flynn","Giacomo Lanzani"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"81e11b0032225755","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Theoretical model of production networks affecting shock propagation, indirect macro relevance.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"The Robust Properties of Economies with Endogenous Production Networks","url":"https://ideas.repec.org/p/nbr/nberwo/35909.html"},{"abstract":"We estimate the causal effects of a financial windfall on consumption, savings, and wage earnings using linked administrative data on a large sample of Canadian lottery winners. Using separate linkages of lottery winners to income tax records and credit bureau data, we estimate how lottery winnings affect consumption measured through credit card spending, savings through financial asset accumulation and debt repayment, and wage earnings from tax records. We then examine how these responses vary across the income distribution. We find that high-income individuals allocated a larger share of lottery winnings to savings and leisure, while low-income individuals spent a larger share on consumption. We illustrate the policy relevance of these heterogeneous responses through three applications: designing fiscal stimulus programs, evaluating a Universal Basic Income (UBI), and determining optimal top tax rates on wage earnings and savings.","also_at":["https://ideas.repec.org/p/nbr/nberwo/35836.html"],"analysis":null,"authors":["Rajashri Chakrabarti","Philippe d'Astous","Kory Kroft","Sheisha Kulkarni","Vyacheslav Mikhed","Matthew J. Notowidigdo","Sahil Raina","Barry Scholnick"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"81b3bb548558b7d0","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Quantifies consumption and savings responses to windfalls, with implications for fiscal stimulus and tax policy.","screening_tag":"DM","selected_in":[],"source":"fed-new-york","source_name":"Federal Reserve Bank of New York","tag":"DM","tag_inferred":false,"title":"Consumption, Savings, and Earnings Responses to Financial Windfalls","url":"https://ideas.repec.org/p/fip/fednsr/103885.html"},{"abstract":"This study applies a Local Linear Forest (LLF) for wage forecasting in France. The LLF outperforms benchmarks such as Random Walk (RW), Ridge Regressions (RR) and Random Forests (RF). We also show that adding foreign predictors (i.e. measures of real activity, price and wage pressures from Germany and Italy) to French economic variables significantly improves wage predictions in France. The implications of our results are that wage dynamics in France exhibit non-linearity, to a certain extent, and that the better ability of LLFs relative to RFs to fit smooth signals is a valuable feature, especially at times in which wage growth reaches unprecedented levels from an historical perspective.","also_at":[],"analysis":null,"authors":[],"date":"2026-10-01","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"819a6b5e6827c711","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Applies advanced forecasting method to French wages, offering limited immediate market insight.","screening_tag":"DM","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Forecasting wages with local linear forests","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3291~03026896b2.en.pdf"},{"abstract":"This paper studies the impact of the short-time work (STW) replacement rate on workers' job-to-job mobility. Exploiting a discontinuity in the Italian STW benefit schedule and matched employer-employee data, we show that a 10-percentage-point increase in the replacement rate raises the probability of remaining with the current employer by 3 per cent, thereby reducing job-to-job flows. The effect is driven by low-ability workers, who are less likely to move to higher-paying firms, suggesting a deterioration in workforce quality among firms relying on STW. We develop a model to rationalise these results and derive an optimal STW benefit formula. The fiscal externality is positive but smaller than that generated by unemployment benefits.","also_at":[],"analysis":null,"authors":["Gaetano Basso","Emanuele Ciani","Francesco Manaresi","Lorenzo Pesaresi"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"7fc514eb2596b82e","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"The paper examines the labor market effects of short-time work schemes, providing insights into fiscal policy and labor mobility in advanced economies.","screening_tag":"DM","selected_in":[],"source":"banca-ditalia","source_name":"Banca d'Italia Temi di discussione","tag":"DM","tag_inferred":false,"title":"Short-time work, its replacement rate and labour mobility","url":"https://ideas.repec.org/p/bdi/wptemi/td_1544_26.html"},{"abstract":"Some occupations pay higher wages than others, even conditional on worker characteristics, implying that occupations can be ranked on a ladder. We develop a simple decomposition to study the role this occupational ladder plays in average wage growth and in the fanning out of wages over the life cycle. We present three main findings. First, the distribution of employment shifts towards higher-paying occupations as workers gain experience. This contributes modestly to average life-cycle wage growth, with greatest impact in early career. Second, this upward movement in the occupational employment distribution is not accompanied by increasing dispersion; thus, the occupational ladder does not directly contribute to the fanning out of wages. Third, early-career workers who are well-positioned on the occupational ladder tend to earn wages far below the occupational average. However, by mid-career, workers’ relative wages within occupations (their positions on the job ladder) no longer depend on their occupation. This change in the covariance between individuals’ positions on the job and occupational ladders is a major contributor to the fanning out of wages over workers’ careers.","also_at":[],"analysis":null,"authors":["Henry E. Siu","Kelly Foley","Guido Matias Cortes"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7dfc54b16e86d3a3","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"Occupational wage dynamics, tangential to macro or market analysis.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"The Occupational Ladder: Implications for Life-Cycle Wage Dynamics","url":"https://ideas.repec.org/p/nbr/nberwo/35929.html"},{"abstract":"Household energy use accounts for approximately one third of U.S. emissions. Guided by a new survey, we develop a quantitative model in which households differ in income and their desire to reduce their emissions. Our analysis of cost-minimizing subsidies for clean equipment, such as electric vehicles and heat pumps, and residential solar yields three insights. First, solar receives the highest subsidy rate and accounts for over one third of abatement, reflecting its complementarities with clean equipment. Second, restricting subsidy eligibility to lower-income households generates only small cost savings. Third, without environmental preferences, household emissions would be over 15 percent higher.","also_at":[],"analysis":null,"authors":["Stephie Fried","David Lagakos","Hannah Rhodenhiser"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7d868c93e1133dca","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Analyzes US household energy subsidies, modest policy relevance for climate markets.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Homework in Climate Economics: Household Production, Environmental Preferences, and Climate Policy","url":"https://ideas.repec.org/p/nbr/nberwo/35945.html"},{"abstract":"A critical tension in global governance is that trade agreements have evolved largely in isolation from climate policy. This paper shows that the two domains generate systematic cross-externalities: larger gains from trade are associated with greater climate externalities imposed on partners, while linking carbon taxes to trade agreements produces distributive externalities that undermine the balance of trade concessions. To address this tension, we present a framework to integrate harmonized carbon pricing into the WTO subject to institutional and political-feasibility constraints. We explore two linkage designs. The first is a centralized Climate Fund, where all members apply a common demand-side carbon tax and contribute a portion of the revenues to the fund, capped by fiscal constraints. The Fund then reallocates these contributions to balance the tax burden across countries, subject to informational constraints. Quantitative analysis shows that even a simple fund allocation rule can sustain a carbon price of $138 per ton of CO2, reducing global emissions by 54%. The main binding constraint is informational: knowing the precise incidence of the carbon tax across countries ex ante would raise the feasible price to $265. The second is a decentralized design without transfers. Each member meets a carbon tax revenue floor but retains full discretion over its mix of demand-side and supply-side taxes. Energy exporters choose supply-side taxes while energy importers opt for demand-side taxes. These choices organically balance the tax burden and yield a 47% reduction in global emissions, almost rivaling the centralized Climate Fund.","also_at":[],"analysis":null,"authors":["Farid Farrokhi","Ahmad Lashkaripour","Homa Taheri"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7d0dbb8a2954be28","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Proposes integrating climate policy into trade agreements, affecting global trade and environmental policy frameworks.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"A Framework for Integrating Climate Goals into Trade Agreements","url":"https://ideas.repec.org/p/nbr/nberwo/35834.html"},{"abstract":"Some firms are more likely than others to invest in workers’ skills. We document this phenomenon and discuss its implications in light of models of firm-sponsored skills training. The data show that better managed firms, even in the same industries and labor markets, are more likely to train, while training clusters around either managerial or frontline worker development. We argue that organizational differences provide incentives for firms to train beyond traditional explanations that focus on labor market frictions. We illustrate how organizational heterogeneity can generate training investments through a knowledge hierarchy framework where top managers with different skills build bespoke organizations tailored to their unique needs. This in turn makes general skill firm-specific, allowing firms to capture returns on training investment.","also_at":[],"analysis":null,"authors":["David J. Deming","Raffaella Sadun","Christopher T. Stanton"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7cbaf6c60dbb5ae3","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Focuses on firm training organization, limited macro or market relevance.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"The Role of Organization in Firm-Sponsored Training","url":"https://ideas.repec.org/p/nbr/nberwo/35920.html"},{"abstract":"This paper examines how land ownership concentration shapes the deployment of large-scale renewable energy projects across six European countries (Spain, Germany, France, Italy, Belgium and the Netherlands). Using a 5×5 km grid-cell framework with cadastral parcel data, we show that cells with a higher share of area in large parcels (= 10 ha) are substantially more likely to host mega photovoltaic (PV) plants (= 50 ha), with a standardized semi-elasticity of 68% in the pooled sample, consistent across all six countries. Land concentration also drives aggregate solar deployment: a one-standard-deviation increase raises expected PV hectares within a grid cell by 62%, an effect driven almost entirely by the mega-plant margin. By contrast, the effect on wind parks is weaker and heterogeneous, consistent with wind requiring less contiguous land assembly than solar. A specificity test and decomposition analysis corroborate that the assembly mechanism operates specifically at the mega-plant margin, and a horse race between cadastral concentration and farm operational size establishes that ownership, not farming scale, is the operative mechanism. A finer 500 m grid within-municipality analysis corroborates the effect of land concentration on mega PV plants and further reveals that it is attenuated in irrigated areas, where higher agricultural rents raise landowner reservation values. We rationalize these patterns with a conceptual framework in which solar assembly requires unanimous consent from a set of landowners whose number falls with parcel size, while wind requires only a subset. Our findings reveal that land ownership structure is a decisive factor in the energy transition: fragmentation impedes large-scale deployment, while concentration enables it but channels its benefits toward a few large landowners, potentially deepening rural grievances and local opposition.","also_at":[],"analysis":null,"authors":["David Cuberes","Aitor Lacuesta","Carlos Moreno-Pérez","Daniel Oto-Peralías"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"7c20cde380f4e67d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"The study analyzes how land ownership concentration impacts the deployment of renewable energy projects, which is relevant for infrastructure and energy transition policy.","screening_tag":"DM","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"DM","tag_inferred":false,"title":"Land concentration and large renewable energy projects","url":"https://ideas.repec.org/p/bde/wpaper/2639e.html"},{"abstract":"Using a controlled macroeconomic experiment, we compare monetary policy rules that differ in how much they look through inflation: a Lean-Against policy that responds strongly to inflation and a Look-Through policy that responds less strongly. We combine each rule with communication protocols that vary the information the central bank releases about its policy response: restricted qualitative information, detailed quantitative information, and detailed quantitative information combined with inflation and output projections. Midway through each session, we raise the persistence of the cost-push shock. Looking through large, persistent shocks raises and prolongs inflation and increases the risk that inflation expectations unanchoring, while responding with tighter policy curbs inflation sooner. Communication matters mainly through projections. Adding detailed quantitative information to qualitative statements has little effect on output gaps, inflation, expectations or forecast errors. Communicating projections reduces inflation and output losses, anchors inflation expectations and lowers forecast errors. Under Look-Through, projections anchor inflation expectations and reduce inflation after the increase in supply shock persistence. Looking through supply-shock-induced inflation is only advisable when the central bank can communicate credible and focal projections to guide expectations.","also_at":[],"analysis":null,"authors":["Olena Kostyshyna","Luba Petersen","Jing Yang"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"7bef7b25636c9966","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Experimental evidence on monetary rule design and communication under cost-push inflation, pertinent to central-bank policy.","screening_tag":"DM","selected_in":[],"source":"boc","source_name":"Bank of Canada Staff Working Papers","tag":"DM","tag_inferred":true,"title":"Beyond \"Looking Through\": Monetary Policy Responses and Communication Under Supply-Driven Inflation","url":"https://ideas.repec.org/p/bca/bocawp/26-39.html"},{"abstract":"A commonly used migration regression relates population changes to local labor demand shocks, often yielding small or statistically insignificant coefficients despite sizable effects on labor market outcomes. We argue that such findings need not imply that mobility is unresponsive to local economic conditions. Rather, conventional migration regressions can be biased, as they do not reflect how workers choose among competing locations. In a parsimonious equilibrium model, local population growth depends on differences between local shocks and those in relevant destinations; when these shocks are correlated, estimated responses are attenuated. Moreover, with industry-level shocks, standard shift-share measures misrepresent locations’ effective exposure, leading to further attenuation. Using simulation experiments based on Brazilian and German administrative data, we show attenuation can exceed 50% and that conventional regression estimates can be highly imprecise. We propose theory-grounded empirical approaches that correct the biases, deliver estimates with a clear structural interpretation, and improve the precision of estimated mobility responses.","also_at":[],"analysis":null,"authors":["Kirill Borusyak","Rafael Dix-Carneiro","Brian K. Kovak"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7bc87820f3e6432d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Bias analysis of migration regressions impacts understanding of labor mobility across regions.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Understanding Migration Responses to Local Shocks","url":"https://ideas.repec.org/p/nbr/nberwo/35921.html"},{"abstract":"We study the relation between strategic complementarities and aggregate persistence in linear-quadratic mean field games with interactions in states and actions. The framework provides local approximations to common macroeconomic problems, including capital accumulation and multiproduct pricing. We show that the equilibrium aggregate dynamics coincide with those of a single-agent linear-quadratic control problem in which state and action curvatures are adjusted for strategic interactions. This result gives conditions for equilibrium existence, establishes uniqueness, and links strategic interactions to aggregate adjustment. We establish conditions under which stronger state complementarities increase persistence, while stronger action complementarities reduce it, even in multidimensional problems whose underlying matrices are not simultaneously diagonalizable. Under these conditions, internalizing state complementarities makes the utilitarian planner’s allocation more persistent, while internalizing action complementarities makes it less persistent. Aggregate-only payoff terms can reinforce or offset these effects. With common shocks, we give conditions under which individual and aggregate dynamics can be combined to identify strategic interactions and model parameters. Finally, we extend the analysis to interactions through higher moments of the state distribution.","also_at":[],"analysis":null,"authors":["Fernando E. Alvarez","David Argente"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7b93e3362ca91522","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"Theoretical mean-field game model with macro analogues, limited direct market relevance.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Strategic Complementarity and Persistence in Linear-Quadratic Mean Field Games","url":"https://ideas.repec.org/p/nbr/nberwo/35892.html"},{"abstract":"Large language models are diffusing rapidly into science, raising concerns that delegating research writing to AI may undermine the development of expertise that scientific training is supposed to build. We measure AI-generated writing in the dissertations of a near-census of US STEM PhD graduates from 2019 to 2026 and link graduates to their subsequent employment. AI writing is absent before 2023, present in 29% of dissertations filed in 2026, and rapidly growing. Use is more common among students from non-English-speaking countries and at lower-ranked programs. Among graduates in the same program and cohort, those whose dissertations contain AI writing are less likely to enter academic research careers and more likely to enter non-tenure-track roles or industry, with this pattern strongest among US-origin students. At the same time as AI may increase research productivity, it thus appears to also be displacing a potentially important portion of the work through which scientific expertise is developed.","also_at":[],"analysis":null,"authors":["Daniel P. Gross","Dror Shvadron","Hansen Zhang"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7b144ed98234d43a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":1,"screen_reason":"Studies AI use in US PhD dissertations, no macro or market implications.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"How Heavily Are PhD Students Offloading Their Scientific Writing to AI? Evidence from US STEM PhD Dissertations","url":"https://ideas.repec.org/p/nbr/nberwo/35859.html"},{"abstract":"Does education lead to political activity? We find that a large, early 20th century school construction program, the Rosenwald schools, led to more NAACP branches in the rural South starting in the early 1940s, i.e. prior to the classic U.S. Civil Rights Movement. Branch growth was stronger where Jim Crow occupational segregation prevented Black men from realizing some of the economic gains of their education. Our findings lend support to theories emphasizing that economic context can act as a critical mediator in determining whether human capital causes political engagement.","also_at":[],"analysis":null,"authors":["Daniel Aaronson","Mark Borgschulte","Sunny Liu","Bhashkar Mazumder"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"79eaab30f85ccad3","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":1,"screen_reason":"Historical education-activism link is not directly relevant to markets or policy.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Schooling and Political Activism in the Early Civil Rights Era","url":"https://ideas.repec.org/p/nbr/nberwo/35842.html"},{"abstract":"Whether to engage in sex and with whom are extremely consequential decisions for young women worldwide, and particularly in sub-Saharan Africa, where HIV rates are high and adolescent pregnancies are common. Yet little is known about the extent to which these decisions are financially motivated. We combine a randomized controlled trial of monthly cash assistance to female students at the University of Zambia with detailed, high-frequency data on sexual behavior and partner characteristics. We find that this temporary increase in income significantly changes women's sexual behavior. Treated participants are 5.1 percentage points less likely to have sex during the treatment period, and the rate of condomless sex falls by 30%. Among women who were not sexually active at baseline, the likelihood of having sex falls by 43%, and partner quality conditional on sex greatly improves. Financial assistance also reduces financial precarity, increasing food security, mental health, and cognitive capacity. These results can be rationalized with a dynamic model of partner search in which women can choose to search for boyfriends or high-income partners who provide financial support and bargain over both transfers and condom use. We conclude that a substantial share of sexual activity is financially motivated in this setting, even in a population not typically regarded as vulnerable. Increasing young women's income may be a useful tool for reducing the negative externalities of risky sex and improving match quality.","also_at":[],"analysis":null,"authors":["Natalie Bau","Corinne Low","Bryce Millett Steinberg"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"78bc3bfc295cddf3","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"Cash transfers affect sexual behavior in Zambia; limited macro-economic market implications.","screening_tag":"EM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":false,"title":"Sex and Subsistence: Income Effects on Risky Sexual Behavior and Partner Selection","url":"https://ideas.repec.org/p/nbr/nberwo/35940.html"},{"abstract":"Using a panel of U.S. imports and customs duties at the HS 6-digit level, we document that in a typical quarter about 20 percent of tariffs rise, 20 percent fall, and 60 percent remain unchanged. Motivated by these facts, we develop a model of staggered tariff setting and embed it in a dynamic open-economy framework. Staggering changes the dynamics of the cross-sectional mean tariff, generating hump-shaped macroeconomic responses to tariff shocks. Staggering also overturns the Razin–Svensson trade- balance neutrality result for permanent tariff increases, because the gradual adjustment of the mean tariff creates an anticipation effect that induces agents to front-load net imports. Inherited tariff dispersion has first-order macroeconomic effects, allowing tariff harmonization to be studied with linear approximation methods. We find that eliminating tariff dispersion while holding the mean tariff unchanged has effects akin to a transitory tariff cut in an economy without staggering.","also_at":[],"analysis":null,"authors":["Stephanie Schmitt-Grohé","Martín Uribe"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7798371c04ff6780","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Analyzes tariff dispersion effects on macro outcomes, informing US trade policy and broader market expectations.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Tariff Staggering","url":"https://ideas.repec.org/p/nbr/nberwo/35957.html"},{"abstract":"The rise in unit profits has been a major contributor to price inflation across the euro area in the post-pandemic period. A widely cited explanation in the literature attributes this trend to post-pandemic supply bottlenecks, which temporarily allowed firms in key sectors to exercise market power, thereby increasing profit margins. An additional argument posits that the degree of competition in these sectors plays a structural role in shaping and driving unit profit growth. The present study empirically tests that hypothesis, using Greece as a case study—an economy within the euro area that saw particularly sharp increases in prices and unit profits during the post-pandemic years. To this end, annual panel data from Greece's economic sectors covering the period 2017–2023 are used. The econometric analysis confirms this hypothesis, indicating that the market power, proxied by sectoral concentration rates, has been a significant determinant of profit and inflation dynamics in the period under consideration.","also_at":[],"analysis":null,"authors":["Dimitris Sideris","Georgia Pavlou"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"7187f0a2b739128d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Empirical link between market power and post-pandemic inflation informs euro-area price outlook.","screening_tag":"DM","selected_in":[],"source":"bog","source_name":"Bank of Greece","tag":"DM","tag_inferred":false,"title":"Excessive cost-push inflation in Greece: the role of market power","url":"https://ideas.repec.org/p/bog/wpaper/370.html"},{"abstract":"We trace the impact of central bank stock purchases by exploiting discontinuities in the Bank of Japan's policy rule, which triggers purchases when stock market index movements fall below a threshold. In normal times, the purchases raise the long-term interest rate while leaving no detectable impact on stock prices. After the introduction of yield curve control, which pegs the long-term yield at 0%, interest rates stop responding and stock prices rise robustly following the purchases. Although these results are inconsistent with the inelastic market hypothesis in its original form, general equilibrium extensions with endogenous interest rates explain our findings.","also_at":[],"analysis":null,"authors":["Masao Fukui","Masayuki Yagasaki"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"716d8d4b98a082c8","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Evaluates Bank of Japan stock purchases impact on rates and equities, pertinent to monetary policy and markets.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"The Impact of Central Bank Stock Purchases: Evidence from Discontinuities in Policy Rules","url":"https://ideas.repec.org/p/nbr/nberwo/35886.html"},{"abstract":"Utilizing a large household-level dataset of inflation expectations for twelve euro-area economies, we attempt to assess the formation and accuracy of inflation expectations following major disruptions of the macroeconomy which we identify during the period from 2004:1 to 2025:2. We find that the arrival of such adverse events tends to increase the degree of inaccuracy in inflation expectations. We also find that this happens because inflation expectations tend to go up in response to these adverse shocks relative to the 12-month ahead inflation realizations, which offers direct evidence of households overestimating inflation. This is consistent with overreaction of inflation expectations in response to inflationary news and with inflation-as-a-bad behavioral patterns in response to adverse non-inflationary shocks. We infer that such behavioral forces appear to have played an important role in the formation of inflation expectations in the euro-area following adverse shocks during the past two decades.","also_at":[],"analysis":null,"authors":["Martin Geiger","Iacovos Sterghides","Marios Zachariadis"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"71472a7d89f4dfa3","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Household inflation-expectation biases in euro area after shocks, relevant for inflation forecasting and policy.","screening_tag":"DM","selected_in":[],"source":"cbc","source_name":"Central Bank of Cyprus","tag":"DM","tag_inferred":false,"title":"When Bad News Breeds Bias: Cross-country Evidence from Households' Inflation Expectations","url":"https://ideas.repec.org/p/cyb/wpaper/2026-3.html"},{"abstract":"More than 23 million adults in the United States lack a high school diploma, and most who return to school drop out before graduating. We evaluate a randomized intervention of adult high school students in which coaches delivered text messages that encouraged persistence. We find that assignment to treatment increased graduation by 4.9 percentage points, and the effect of message receipt among compliers is 9.3 percentage points, a 41 percent increase relative to the control mean. The intervention operated on the intensive margin by increasing the number of courses completed, but did not affect student enrollment. The effects of the intervention are concentrated among students assigned to experienced coaches, who customized their messages more extensively. We contextualize the economic impact of the low-cost intervention by comparing labor market earnings of graduates to non-graduates, which implies an earnings benefit of $149 per treated student over four years.","also_at":[],"analysis":null,"authors":["Alberto Ortega","Pietro Pellerito","Patrick S. Turner"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7102fa35f089afee","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Education intervention impacts individual earnings, not directly tied to macro or market dynamics.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Staying Connected: Experimental Effects of Coach-Delivered Text Messages in an Adult High School","url":"https://ideas.repec.org/p/nbr/nberwo/35923.html"},{"abstract":"Observational research into the relationship between maternal acetaminophen use during pregnancy and a child’s subsequent risk of attention deficit hyperactivity disorder (ADHD) or autism has been limited by confounding factors. Using two large national U.S. insurance claims databases and a novel natural experiment, we assessed differences in prevalence of ADHD and autism among children whose gestational periods were impacted by a nationwide Tylenol recall issued in 1982, following deaths from Tylenol capsules containing potassium cyanide. Prevalence of ADHD and autism was not significantly different in birth cohorts exposed to the recall during gestation, when maternal acetaminophen use would have been reduced; interrupted time series models showed no significant differences compared to underlying temporal diagnostic trends. These findings are inconsistent with a clinically meaningful effect of maternal acetaminophen use on subsequent development of neurodevelopmental disorders.","also_at":[],"analysis":null,"authors":["Christopher M. Worsham","Charles Bray","Joshua Rothman","Brian Kwan","Anupam Jena"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"70ed74ba08ca70ce","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Tylenol recall health study lacks macroeconomic or market impact.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"In Utero Exposure to the 1982 Tylenol Recall and Neurodevelopmental Outcomes","url":"https://ideas.repec.org/p/nbr/nberwo/35873.html"},{"abstract":"A simple production economy with nominal price rigidities explains several key asset pricing facts, including the average slopes and cyclicality of equity and interest rate term structures. Nominal rigidities amplify the procyclicality of dividends after negative productivity shocks and generate countercyclical inflation, as sluggish price adjustment leads to a gradual dividend recovery. Consequently, short-duration equities (bonds) have more (less) procyclical payoffs than their long-duration counterparts. Slow-moving consumption habits produce large, countercyclical risk prices, yielding realistic asset valuations. Extending Campbell-Cochrane preferences with both market and home consumption habits allows them to operate in production economies while preserving realistic macroeconomic dynamics.","also_at":[],"analysis":null,"authors":["Pierlauro Lopez","Francisco Vázquez-Grande","David López-Salido"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"70daadd989e5b0b9","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"NK model linking nominal rigidities to equity and bond term structures, useful for asset-pricing and monetary outlook.","screening_tag":"DM","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"DM","tag_inferred":true,"title":"A New Keynesian Model of the Term Structures of Equity and Bond Returns","url":"https://ideas.repec.org/p/bde/wpaper/2635e.html"},{"abstract":"Economic growth depends on combining existing inputs into new inventions. However, these combinations are not always physically feasible. One important example is dark silicon, where power and cooling limits prevent all the transistors on a chip from operating at once. I develop a growth model motivated by these limitations and establish conditions for a unique balanced growth path where electronic miniaturization and power efficiency grow at the same rate. When power-efficiency research becomes harder, both total research employment and productivity growth fall on the new balanced growth path. With gradual adjustment of research employment, I construct a local equilibrium transition in which more researchers temporarily coexist with slower productivity growth. This Eroom’s law result holds for small shocks in a two-dimensional design space with sufficiently similar industry constraints.","also_at":[],"analysis":null,"authors":["Pablo D. Azar"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"6d8157fed435c464","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"The paper provides a theoretical growth model linking power constraints in technology to productivity slowdowns, which is relevant for long-term macro forecasting.","screening_tag":"Transversal","selected_in":[],"source":"fed-new-york","source_name":"Federal Reserve Bank of New York","tag":"Transversal","tag_inferred":false,"title":"From Moore’s Law to Eroom’s Law: Power Constraints and the Productivity Slowdown","url":"https://ideas.repec.org/p/fip/fednsr/103886.html"},{"abstract":"Synthetic control methods hold the promise of identifying a credible counterfactual by closely reproducing pretreatment outcome paths. Their reliability, however, depends in part on how effectively they constrain researchers’ less-visible degrees of freedom. We explore these methods’ sensitivity by constructing 1440 plausibly defensible specifications to estimate the employment effect of California’s $20 fast-food minimum wage. While over 96 percent of the estimated employment effects are negative, the range is vast, illustrating that synthetic control methods are sensitive to specification choice. Estimates from simpler and far more transparent difference-in-differences methods lie near the centers of the comparable distributions of synthetic control estimates.","also_at":[],"analysis":null,"authors":["Jeffrey Clemens","Olivia Edwards","Jonathan Meer","Joshua D. Nguyen"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"69bd8e9a295275cf","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"Methodological sensitivity analysis for minimum-wage effects, indirect relevance to policy evaluation.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"We Just Created More Than 1,000 Synthetic Controls To Study California's $20 Fast Food Minimum Wage","url":"https://ideas.repec.org/p/nbr/nberwo/35931.html"},{"abstract":"Do shorter workweeks generate work-sharing and productivity gains, as intended by policymakers? We study France’s pay-preserving reduction in the workweek from 39 to 35 hours, bundled with employer payroll tax cuts. We first exploit the staggered implementation by firm size to identify the impact of the reform package. We then use differential exposure to the hours cut and tax cut to separate their effects. We combine matched employer-employee, balance-sheet, and survey data to study worker, firm, and local labor market effects. The reform package left employment unchanged. This zero masks large offsetting effects: absent the tax cuts, the shorter workweek would have reduced employment by 3.8%. The effects are skill-biased, raising employment among managers and professionals while reducing it among other employees. Finally, shorter hours raised total factor productivity by 2%, limiting the output decline to 1% despite a 6% fall in total hours. Surveys point to work intensification and organizational changes as potential drivers of productivity gains.","also_at":[],"analysis":null,"authors":["Pauline Carry","Claire Montialoux","Elio Nimier-David","Alexandra Roulet","Nina Roussille"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"63b0186f4cdfd5f3","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Shorter workweek study informs labor-market policy and productivity, relevant to advanced-economy macro outlook.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"The Effects of a Shorter Workweek on Employment, Output, and Productivity","url":"https://ideas.repec.org/p/nbr/nberwo/35917.html"},{"abstract":"We analyze firms’ IPO decisions using detailed financial data on US private firms. Firms with higher external capital needs are more likely to go public. Following the IPO, firms increase investment and debt issuance, leaving their leverage ratios un-changed from pre-IPO levels. Finally, newly public firms borrow from an expanded pool of lenders on improved terms, and the within-firm dispersion in banks’ private risk assessments declines. Our analysis suggests that firms go public to improve their access to capital, which is facilitated by reduced asymmetric information, and that the benefit extends beyond the IPO itself to new sources of debt.","also_at":[],"analysis":null,"authors":["Andres Almazan","Nathan Swem","Sheridan Titman","Gregory Weitzner"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"63632a7e0edb6ba0","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Shows IPOs improve capital access and debt financing, informing equity market and corporate finance dynamics.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Access to Capital and the IPO Decision: An Analysis of US Private Firms","url":"https://ideas.repec.org/p/nbr/nberwo/35888.html"},{"abstract":"Exposure to better peers in the workplace can influence career trajectories through two opposing channels: positively, via knowledge spillovers, and negatively, through competition for advancement. We disentangle these effects by studying untrained labor market entrants and distinguishing between coworkers in the same occupation with whom they are likely to compete versus those with whom they are unlikely to compete. We find robust evidence of persistent knowledge spillovers but also identify countervailing competition effects of comparable magnitude. Both effects are more pronounced for men than for women. (JEL D83, J16, J24, M53, M54, O33)","also_at":[],"analysis":null,"authors":["Thomas Cornelißen","Christian Dustmann","Uta Schönberg"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20230714","doi_registered":"2026-10-01","flags":[],"group":"journal","id":"5d608d56a14c31de","issue_date":"2026-10-01","kind":"journal","publication_month":"2026-10","relevance":2,"screen_reason":"Studies workplace knowledge spillovers and competition, limited relevance to macro or market analysis.","screening_tag":"Transversal","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"Transversal","tag_inferred":false,"title":"Knowledge Spillovers, Competition, and Individual Careers","url":"https://doi.org/10.1257/aer.20230714"},{"abstract":"Artificial intelligence is driving a large expansion in data center capacity, power infrastructure, and specialized computing equipment. We estimate that a 1 GW AI campus costs about $41 billion. A 188 GW U.S. buildout completed by 2032 would require total investment of nearly$9 trillion and amount to annual investment of 3.2 percent of GDP over 2025–2032. As hyperscaler capital expenditures outgrow internal cash flow, financing is shifting toward leases, joint ventures, project debt, private credit, securitization, and special-purpose vehicles. These structures expand funding capacity but also raise asset-level leverage, obscure contingent obligations, and expose investors to tenant concentration, technological obsolescence, execution delays, and uncertain residual values.","also_at":[],"analysis":null,"authors":["Stijn Van Nieuwerburgh"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"5c99c5601da05a9e","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Quantifies AI-driven infrastructure investment and financing structures, relevant for capital-market outlooks.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Financing the AI Buildout","url":"https://ideas.repec.org/p/nbr/nberwo/35865.html"},{"abstract":"By how much do import tariffs raise aggregate prices? We develop a simple decomposition that separates the aggregate price effect of a tariff into three channels—cost pass-through, markup adjustments, and consumer substitution across varieties—and calibrate an oligopolistic competition model with endogenous markups to firm-level market shares for Canadian domestic producers, U.S. exporters, and rest-of-world suppliers. A 25% counter-tariff on U.S. imports raises Canada's aggregate price index by 0.66—well below the 1.25% that direct cost pass-through alone would predict. The dominant offsetting force is consumer substitution toward non-U.S. varieties, which reduces the price effect by 0.47 percentage points; markup adjustments, holding fixed pre-tariff market shares, contribute a further 0.26 percentage point decrease. The gap between cost pass-through and the true price effect widens sharply with the tariff rate: at a 50% tariff, cost pass-through alone predicts more than twice the true price effect.","also_at":[],"analysis":null,"authors":["Christian Bustamante","Xing Guo","Lu Han","Soyoung Lee","Gaelan MacKenzie","Mariel Yacolca Maguiña","Jacob Short"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"5c760d89c5e8c9b3","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Quantifies tariff-induced price effects in Canada, informing trade policy and inflation outlook.","screening_tag":"DM","selected_in":[],"source":"boc","source_name":"Bank of Canada Staff Working Papers","tag":"DM","tag_inferred":false,"title":"How Do Import Tariffs Affect Aggregate Prices? Theory and Evidence from Canada","url":"https://ideas.repec.org/p/bca/bocawp/26-36.html"},{"abstract":"We provide evidence on the extent to which food assistance affects spending on sugary items by studying the Pandemic Electronic Benefit Transfer (P-EBT) program, which provided funds to families of children who lost access to free and reduced-price school meals due to COVID-19 pandemic school closures. Leveraging state-level variation in the timing of P-EBT disbursements using a stacked difference-in-differences identification strategy with NielsenIQ Consumer Panel data, we find that P-EBT disbursement was associated with a 16-percent increase in weekly spending on sugary items among SNAP-eligible households with school-aged children. Notably, this increase exceeded the percentage increase in overall food spending for this group, suggesting that SNAP-eligible households with school-aged children allocated a disproportionately large share of their P-EBT-driven purchases toward sugary items relative to their pre-period baseline. We do not detect changes among households unlikely to have received P-EBT benefits or in placebo disbursement years.","also_at":[],"analysis":null,"authors":["Georgina Cisneros","Brandyn F. Churchill"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"5bfc3fab3edadde9","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Examines food assistance effects on sugary spending, modest relevance to consumption trends.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Does Food Assistance Drive Spending on Sugary Foods? Evidence from the Pandemic Electronic Benefit Transfer Program","url":"https://ideas.repec.org/p/nbr/nberwo/35835.html"},{"abstract":"Work experience has been found to be a key determinant of work and wages for educated women, but it seems to play a smaller role for the less educated. For them, welfare, tax credits and family composition matter more, and increasingly so does participation in disability programmes. Here we document how labor supply, wages, health, and disability claims have evolved in the UK over the last three decades, and examine how reforms to tax credits, disability benefits and other welfare programs have changed work incentives over this period. We then introduce these features into an empirical dynamic structural model of life-cycle labor supply, human capital and disability benefit application, in which human capital combines health capital, experience accumulated in work, and education. Estimating the model on a panel of working-age women in the UK, we examine the interactions between experience capital and health capital in driving life-cycle earnings across different education groups. Our results highlight the importance of interactions in the disability benefit, welfare and tax-credit systems for understanding the life cycle pattern of hours, employment, earnings, and disability claims, and for evaluating policy counterfactuals.","also_at":[],"analysis":null,"authors":["Richard Blundell","Monica Costa-Dias","Graham Mazeine","Costas Meghir","Tom Waters"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"5acf0c39e076fc47","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Studies UK labor supply, welfare and disability benefits, offering limited macro-policy insight.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Labor Supply and Wages over the Life Cycle: Human Capital and Disability Benefits","url":"https://ideas.repec.org/p/nbr/nberwo/35861.html"},{"abstract":"In response to the 2020 economic shutdown, the Italian government introduced the Superbonus, a substantial increase in existing incentives for residential building renovation aimed at supporting the construction sector. The measure triggered a sharp and sustained rise in sectoral output. Using sector-level data, we examine the policy's impact on workplace injuries, which have historically been frequent in construction. Contrary to previous evidence linking economic expansions to higher accident rates, we find that, following the introduction of the Superbonus, construction employment in Italy rose markedly relative to other sectors, while the injury rate declined slightly. Amid generally declining injury rates, driven by changes in legislation, the Superbonus reinforced this trend by increasing compliance incentives and the costs associated with regulatory infringements.","also_at":[],"analysis":null,"authors":["Andrea Benecchi","Daniele Ruggeri","Elisa Scarinzi"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"58c1a35c99df058a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"The paper evaluates the impact of a specific Italian fiscal stimulus on workplace safety, which is of narrow interest for policy evaluation.","screening_tag":"DM","selected_in":[],"source":"banca-ditalia","source_name":"Banca d'Italia Temi di discussione","tag":"DM","tag_inferred":false,"title":"Superbonus and work injuries in the construction sector in Italy","url":"https://ideas.repec.org/p/bdi/wptemi/td_1545_26.html"},{"abstract":"This paper shows that insuring landlords against non-payment risk can improve housing access and upward geographic mobility for fragile tenants. We study Visale, a large-scale publicly funded rent guarantee insurance policy in France, free for eligible tenants and landlords. Using administrative household and claim payout data and quasi-experimental eligibility variation by exact age, we show the guarantee increased access to private-sector rental housing, especially for immigrants, newly formed households, and low-income renters. The scheme eased long-distance mobility toward expensive, high-wage neighborhoods at a moderate fiscal cost per marginal move, though potentially displacing comparable ineligible tenants through higher rents.","also_at":[],"analysis":null,"authors":["Thomas Bézy","Antoine B. Levy","Timothy McQuade"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"5814c28b50898b02","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Rent-guarantee policy impacts housing access but has limited immediate market or macro relevance.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Insuring Landlords","url":"https://ideas.repec.org/p/nbr/nberwo/35932.html"},{"abstract":"We study the role of bank liquidity regulation in the growth of private credit. Following the introduction of the liquidity coverage ratio (LCR), private credit increases significantly more in U.S. counties with a larger footprint of banks subject to the LCR or of LCR banks with greater initial liquidity shortfalls. Our estimated effect of the LCR on private credit growth is comparable in economic magnitude to that of the increased capital requirements from the 2012 CCAR stress tests. Consistent with loan supply effects, the relationship between banks’ LCR footprint and private credit is stronger in industries that are more reliant on credit.","also_at":[],"analysis":null,"authors":["Sebastian Doerr","Gaston Gelos","Vesa Pursiainen"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"55bb25a585119d02","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Empirical link between LCR regulation and private credit growth in US counties, directly relevant to banking and credit markets.","screening_tag":"DM","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"DM","tag_inferred":false,"title":"Bank liquidity regulation and the growth of private credit","url":"https://ideas.repec.org/p/bis/biswps/1388.html"},{"abstract":"Using administrative data from Scandinavian countries, we provide evidence on international migration responses to wealth taxes and evaluate their aggregate economic implications. We find significant migration responses among the wealthy: A 1 percentage point increase in the top wealth tax rate decreases the stock of wealthy taxpayers by about 2 percent. A large fraction of the wealthy are business owners, and their businesses are negatively affected by owner out-migration. The aggregate effects are nevertheless modest: The migration responses to a 1 percentage point increase in the top wealth tax rate reduce employment by 0.02 percent, investments by 0.07 percent, and value added by 0.10 percent. (JEL D31, E22, E24, F22, H24, L26, K34)","also_at":[],"analysis":null,"authors":["Katrine Jakobsen","Henrik Kleven","Jonas Kolsrud","Camille Landais","Mathilde Muñoz"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20241596","doi_registered":"2026-10-01","flags":[],"group":"journal","id":"552c059c2e6d95fb","issue_date":"2026-10-01","kind":"journal","publication_month":"2026-10","relevance":5,"screen_reason":"Wealth-tax migration evidence from Scandinavia, modest macro implications for advanced-economy tax policy.","screening_tag":"DM","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"DM","tag_inferred":true,"title":"Taxing Top Wealth: Migration Responses and Their Aggregate Economic Implications","url":"https://doi.org/10.1257/aer.20241596"},{"abstract":"How much a firm's shocks affect aggregate outcomes, and how they propagate to other firms, depends on the firm's position within the network of firm-to-firm trade. Because data on firm-level networks are available for few economies, quantitative work typically relies on firm size and/or input-output tables as proxies. Using administrative VAT records and tax filings, we build harmonized production networks for five European economies (Belgium, Estonia, Hungary, Italy, and Portugal) and measure firms' positions directly. Five findings stand out. First, firm size and centrality capture a firm's first-order aggregate impact, but not its vertical position along production chains, which is orthogonal to size and governs how shocks propagate across firms. Second, firm size is itself a function of the network: roughly half of within-industry size dispersion reflects differences in the number of customers rather than a primitive such as productivity. Third, granularity runs along several dimensions beyond firm size, network sales, transaction values, and the number of customers, which are all heavy-tailed and span several orders of magnitude. Fourth, firm-to-firm networks differ structurally from input-output tables: they are orders of magnitude sparser, \"roundabout\" production disappears, and input shares vary widely even within narrow sector pairs. These patterns are stable across all five economies and persist within narrowly defined industries, reflecting firm-level characteristics rather than sectoral composition or country-specific factors. Finally, these distinctions are economically relevant: firm-level responses to monetary policy vary systematically with their vertical position and cross-country differences in firms' positions along production chains generate heterogeneous aggregate responses to a common shock. We propose using these moments as calibration targets and as a guide for assessing whether sector-level structure provides an adequate approximation and for identifying when firm-level heterogeneity is first-order.","also_at":["https://ideas.repec.org/p/nbb/reswpp/202609-496.html","https://ideas.repec.org/p/ptu/wpaper/w202611.html"],"analysis":null,"authors":["Glenn Magerman","Alberto Palazzolo","Emmanuel Dhyne","Andras Borsos","Dmitry Kulikov","Andrea Linarello","Alari Paulus","Giacomo Romanini","Martin Saldias"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"530dea158af91332","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"The paper analyzes firm-to-firm production networks and shock propagation, which is relevant for understanding systemic risk and supply chain vulnerabilities.","screening_tag":"DM","selected_in":[],"source":"banca-ditalia","source_name":"Banca d'Italia Temi di discussione","tag":"DM","tag_inferred":false,"title":"Beyond firm size: network position and shock transmission in firm-to-firm production networks across five economies","url":"https://ideas.repec.org/p/bdi/wptemi/td_1549_26.html"},{"abstract":"Does working from home increase fertility? I study the 2020 expansion of remote work by comparing changes in births across U.S. college graduates whose majors differed in pre-pandemic teleworkability. Measuring exposure by college major avoids relying on occupations workers may have chosen in response to the expansion. Among married women, a one-standard-deviation increase in teleworkability reduced annual birth rates by 2 percent and increased full-time employment by 1.3 percent. I find no statistically significant effects on fertility among men or unmarried women, or on marriage or divorce. Accounting exercises suggest that increased employment can explain about half of the decline in births. The results suggest that returning to pre-pandemic telework levels would raise the total fertility rate by 0.09 births per woman.","also_at":[],"analysis":null,"authors":["Andrew C. Johnston"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"5077cac729a5d5b1","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Remote-work fertility effects inform US labor-market and demographic trends.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Does Remote Work Increase Fertility?","url":"https://ideas.repec.org/p/nbr/nberwo/35881.html"},{"abstract":"Alcohol use, transactional sex, and gambling carry significant health and economic consequences. We conducted a randomized controlled trial in Kenya to assess whether these behaviors could be altered with a savings intervention that provided lottery-based interest, goal-setting support, and savings reminders. Over 24 months, the intervention increased formal savings and assets, financed primarily by lower spending on alcohol, transactional sex, and gambling. It also reduced hazardous drinking by 26 percent and intimate partner violence by 15 percent. HIV/STI incidence declined by 8 percent, though this was not statistically significant. Savings interventions can simultaneously boost financial security and change health behavior.","also_at":[],"analysis":null,"authors":["Harsha Thirumurthy","Elizabeth F. Bair","Dean Yang","Teniola I. Egbe","Benard Ayieko","Julius Wesonga","Sue Napierala","Connie Celum","Mary E. Putt","Carol S. Camlin","Mark Ayallo"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"4f644b7028b440fa","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Savings intervention in Kenya links finance and health but has modest macro relevance.","screening_tag":"EM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":false,"title":"Crowding Out Temptation: Experimental Evidence on Savings and Health Behaviors in Kenya","url":"https://ideas.repec.org/p/nbr/nberwo/35833.html"},{"abstract":"We build a E-HANK model, an Environmental-Heterogeneous Agent New Keynesian model with an energy sector, distinguishing clean from dirty energy and allowing households to adopt a costly clean energy technology. We use this framework to study the transmission of fossil energy shocks and the effectiveness of fiscal, monetary, and climate policy responses. Clean technology adoption acts as a stabilizing channel, dampening inflation and output losses relative to an economy with no adoption or only fossil fuels available. Energy price subsidies shield fossil energy users but weaken adoption incentives, creating a policy trade-off that (un)targeted transfers avoid while still insulating households. An aggressive monetary response yields small, short-lived inflation gains at a large output cost, and slows down adoption. Recycling carbon revenues into clean technology subsidies rather than lump-sum rebates has the potential to green the economy and dampens the inflationary impact of energy shocks, but comes at the cost of shifting the burden of higher energy prices on the households least able to adopt.","also_at":[],"analysis":null,"authors":["Boris Chafwehé","Francesca Diluiso","Guillaume Schwengler"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"4d88a2c417490017","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Models energy shocks and policy responses, showing macro-inflation and output effects relevant to monetary and climate policy.","screening_tag":"Transversal","selected_in":[],"source":"nbb","source_name":"National Bank of Belgium Working Papers","tag":"Transversal","tag_inferred":false,"title":"Energy Shocks and the Green Adoption Channel According to E-HANK","url":"https://ideas.repec.org/p/nbb/reswpp/202610-501.html"},{"abstract":"The increasing use of geoeconomic pressure is reshaping the global economy. We introduce a methodology using large language models (LLMs) to systematically measure the application of and response to geoeconomic pressure from large textual corpora, classifying which governments apply pressure to which foreign targets, using which in struments, firms, and products. Most importantly, we use LLMs to analyze how and why firms respond to the pressure. We focus on export controls, sanctions, and tariffs as the main instruments of pressure on firms. We find that export controls induce the targeted firms to undertake domestic R&D to build a domestic alternative technology. Western sanctions on Russia cause supply chain re-arrangements, the major beneficiary of which are firms in third-party countries, like China and India, which step into the market vacuum created by the broken business relationships. The threat and impositions of U.S. tariffs cause losses for the majority of U.S. firms, which report absorbing the cost shock on their inputs via their profit margin. Foreign firms are also negatively affected, mostly via the related macroeconomic uncertainty and the cost of relocating production.","also_at":[],"analysis":null,"authors":["Christopher Clayton","Antonio Coppola","Vanessa Hu","Matteo Maggiori","Jesse Schreger","Serdil Tinda"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"4c30489660767c57","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Analyzes sanctions, export controls and tariffs effects on firms and supply chains, directly informing market and policy impacts.","screening_tag":"Transversal","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"Transversal","tag_inferred":false,"title":"Geoeconomic pressure","url":"https://ideas.repec.org/p/bis/biswps/1386.html"},{"abstract":"This paper identifies AI news shocks from financial markets and traces their macroe-conomic effects in the United States and the euro area. We combine a daily equity factor based on differences in firms’ AI exposures with sign, magnitude, and narrative restrictions in a Bayesian VAR to isolate revisions in AI’s expected economic value. Monthly local projections reveal an investment-led adjustment in the US: capital-goods orders rise early and persistently, while aggregate activity responds more gradually and with greater uncertainty. Producer prices increase before consumer prices, and the expansion spreads from sectors closely connected to the AI production network to the broader economy. In the euro area, equity prices rise and the euro depreciates; import and energy costs feed into inflation before real activity strengthens. Inflation expectations and nominal rates also increase. The results highlight a monetary policy dilemma: financial spillovers and imported price pressures arrive before the broader productive gains from AI adoption.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"United States and the euro area","flags":[],"in_issue":false,"rationale":"The abstract explicitly mentions the United States and the euro area, both advanced economies.","relevance_note":"The findings show how AI-related news can affect real activity, prices, and monetary policy variables in major advanced economies, informing policymakers and market participants about emerging financial and inflationary spillovers.","summary":"The paper identifies AI news shocks from equity markets and uses a Bayesian VAR to trace their macroeconomic effects in the United States and the euro area. It finds early investment responses in the US and that equity gains, euro depreciation, and inflation pressures appear before broader output gains in the euro area.","takeaways":["US capital-goods orders rise early and persist after AI news shocks.","Producer prices increase before consumer prices in the United States.","In the euro area, equity prices rise and the euro depreciates following AI news shocks.","Inflation expectations and nominal rates increase in the euro area after AI news shocks."],"wording_correction":null},"authors":["Maria Sole Pagliari"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"4b5959f3a5d27a23","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"AI news shocks directly affect US/euro inflation, output and monetary policy considerations.","screening_tag":"DM","selected_in":[],"source":"dnb","source_name":"De Nederlandsche Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Do Markets Dream of Artificial Intelligence? Macroeconomic Effects and International Spillovers of AI News Shocks","url":"https://ideas.repec.org/p/dnb/dnbwpp/871.html"},{"abstract":"In 2017, the federal government ended payments for cost-sharing reduction (CSR) subsidies for the Health Insurance Marketplaces created by the Affordable Care Act. Rather than uniformly increase Marketplace plans’ premiums to offset the loss of these payments, over 40 states responded by silver loading—only increasing the premiums of silver plans to which CSR subsidies apply and premium tax credits are tied. Silver loading was intended to increase the affordability of Marketplace coverage by increasing premium tax credits and thereby enrollment, though the literature lacks causal estimates. Furthermore, Congress is considering reinstating CSR subsidy funding, effectively undoing silver loading. We use panel data on 2015-2021 Marketplace health plan premiums and enrollment in 12 states from the Centers for Medicare and Medicaid Services to estimate silver loading’s effects using contiguous county-pair models. We find that silver loading functioned as intended, lowering the cost of Marketplace coverage and increasing enrollment by 8-14% among subsidized Marketplace enrollees with incomes between 250% and 400% of the poverty level. We project that Congress ending silver loading would decrease Marketplace enrollment by at least 330,000 enrollees in 2027.","also_at":[],"analysis":null,"authors":["Coleman Drake","David Anderson","Dylan Nagy","Mark Shepard"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"494d07082f353b0f","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Evaluates silver-loading policy effects on ACA premiums and enrollment, modest relevance to health-sector market dynamics.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"The Impact of Silver Loading in ACA Health Insurance Marketplaces","url":"https://ideas.repec.org/p/nbr/nberwo/35955.html"},{"abstract":"TRIPS (1995) has played a major role in shaping the Indian pharmaceutical industry. Conventional theory suggests that strong intellectual property rights (IPR) frameworks should strengthen innovation incentives. Yet, two decades after TRIPS, growth in India’s novel innovation pipeline has stalled. This chapter challenges the assumption that stronger IPR alone would catalyze discovery-based R&D. We utilize trial phase transition data from the Biomedtracker database, finding that the Indian pipeline faces a bottleneck in transitioning clinical trials specifically from Phase 1 to Phase 2, supported by a null result in transitions from Phase 1 to Phase 3, benchmarked against China and the United Kingdom. We argue that this reflects binding constraints in the Indian ecosystem that are likely orthogonal to IPR, accompanied by a within-firm shift toward non-novel programs. We corroborate these arguments through interviews with Indian pharmaceutical industry experts. Our findings should inform thinking about normative IPR in developing economies.","also_at":[],"analysis":null,"authors":["Chirantan Chatterjee","Aniruddh Bhaskaran","Matthew J. Higgins"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"48f36674b68845fa","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Indian pharma R&D bottlenecks affect sector growth, modest relevance for emerging-market outlook.","screening_tag":"EM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":false,"title":"The Long March to Innovation: R&D and Competitive Evolution in the Indian Pharmaceutical Industry","url":"https://ideas.repec.org/p/nbr/nberwo/35916.html"},{"abstract":"We use a dynamic factor time series model to estimate the national mortality impact of the Great Recession. In aggregate, the Great Recession reduced the average annual, age-adjusted mortality rate by about 2 percent, with effects persisting for at least a decade. In a calibrated model of the welfare effects of the estimated impacts of the Great Recession on consumption and mortality, we find that the welfare gain from the estimated mortality decline is quantitatively significant relative to the welfare loss from the estimated consumption decline. The estimated mortality decline is also quantitatively close to prior mortality estimates using cross-sectional variation in the severity of the Great Recession, implying limited general equilibrium effects of the Great Recession on mortality. More broadly, our findings suggest that prior evidence from local labor markets that recessions are good for health can be extrapolated to the likely mortality consequences of nationwide recessions.","also_at":[],"analysis":null,"authors":["Amy Finkelstein","Matthew J. Notowidigdo","Enzo Profili"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"46890343af2c08d2","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Recession-mortality link offers indirect welfare insight, limited market implications.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"The Impact of the Great Recession on Mortality: A Dynamic Factor Analysis","url":"https://ideas.repec.org/p/nbr/nberwo/35914.html"},{"abstract":"The COVID-19 pandemic caused a sharp initial rise in unemployment, followed by an unexpectedly tight labor market. Using a panel of tax data containing newly assembled information on worker occupation, we document persistent labor force exit, especially among low-income and low-skill workers. Low-skilled unmarried men are by far the most likely to exit, reinforcing recent concerns regarding the economic and social engagement of this group. Contrary to prevailing theories, we find little evidence that school closures, virus exposure, stimulus payments, or unemployment benefits explain these exits. Nor is the exit explained by additional upgrading of occupations or firm quality. Individuals who leave the labor force do not (on average) make up the missing income; however, self-employment income replaces roughly a quarter of the lost W-2 income. The facts suggest that the willingness to work for low pay decreased and preferences for leisure and job flexibility increased among a large set of workers who have found ways to get by with less income. These results have implications for tax policy, fiscal projections, and labor market dynamics in the post-pandemic economy.","also_at":[],"analysis":null,"authors":["Andrew C. Barr","Laura Kawano","Bruce Sacerdote","Michael Stevens"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"467418e7c297e4e9","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Documents post-COVID labor force exits, affecting fiscal projections and labor market outlooks.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Which Workers Left the Labor Force Post-COVID Recession and Why?: Filing, Tax Credit Take-Up, and Labor Force Engagement by Occupation","url":"https://ideas.repec.org/p/nbr/nberwo/35856.html"},{"abstract":"Error in the measurement of key development outcomes affects our understanding of socioeconomic phenomena and their policy implications. This paper focuses on measuring intimate partner violence (IPV), a public health issue affecting women globally. We introduce a novel, privacy-enhancing data collection method using a ballot, comparing it to standard survey techniques in which responses are not kept private from enumerators, and list experiments, an approach ensuring complete anonymity. Our findings show that improved privacy yields higher and more accurate IPV reports than both, especially among women with low education. By linking our data with two natural experiments, we demonstrate that the non-random nature of underreporting with standard methods can lead to biased estimates of IPV determinants.","also_at":[],"analysis":null,"authors":["Jorge M. Agüero","Ursula T. Aldana","Erica M. Field","Veronica Frisancho","Ignacio Rodriguez Hurtado","Javier Romero"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"435186b6f85588d8","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"IPV measurement method is social-science focused, not market-relevant.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Measurement Error in Self-Reported Data on Stigmatized Behavior: Experimental Evidence on Intimate Partner Violence","url":"https://ideas.repec.org/p/nbr/nberwo/35891.html"},{"abstract":"Over the past four decades, the earnings gap between college graduates and non-graduates has widened substantially, prompting interest in policies aimed at promoting higher education among low-income students. A key challenge for these policies is the high college dropout rate. This paper develops a dynamic model of college enrollment and completion with rich individual heterogeneity to assess how various factors influence college attendance, dropout, and graduation. We estimate the model using data from longitudinal surveys, results of quasi-experimental studies on grant aid, and large-scale randomized controlled trials. We use the model to simulate the effects of tuition subsidies, college loans, financial incentives, and increased pre-college skills on attendance and completion. We find moderate effects of most unconditional financial policies on attendance, with small effects on completion conditional on attendance. By contrast, some merit-based incentives, such as forgiving student loans upon receipt of a bachelor’s degree, have substantial effects. However, this type of policy and other financial subsidies accrue even more than the others to students from relatively wealthy backgrounds. Overall, it appears infeasible to design a financial aid policy that is simultaneously effective in raising attainment and fiscally progressive. By comparison, we find that the greatest potential for increasing attainment could come from better preparing students for college.","also_at":[],"analysis":null,"authors":["Douglas N. Harris","Christopher R. Taber","Yu (Alan) Yang"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"4270f81208fd53c0","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"College-aid dynamics inform education policy but have minimal macro-economic relevance.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"College Success: Understanding the Roles of Financial Aid, Loans, Preparation, and Incentives","url":"https://ideas.repec.org/p/nbr/nberwo/35930.html"},{"abstract":"Americans rarely marry outside their race or class group, a pattern with well-documented implications for inequality and intergenerational mobility. Limited exposure may partly explain these low intergroup marriage rates. We instrument for exposure using variation in childhood neighborhoods based on whether other race and class groups had more opposite-sex children of similar age. Exposure increases interclass (high- and low-parent income) marriage but has no detectable effect on interracial (White and Black) marriage. A spatial marriage model predicts that residential segregation—one of many forms of exposure—accounts for more than one-third of marital sorting by class but less than 5 percent by race. (JEL J12, J15, J62, R23)","also_at":[],"analysis":null,"authors":["Benjamin Goldman","Jamie Gracie","Sonya R. Porter"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20250115","doi_registered":"2026-10-01","flags":[],"group":"journal","id":"4246e89de2bd9528","issue_date":"2026-10-01","kind":"journal","publication_month":"2026-10","relevance":0,"screen_reason":"Examines marriage patterns; no connection to macroeconomics or financial markets.","screening_tag":"Transversal","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"Transversal","tag_inferred":false,"title":"Who Marries Whom? The Role of Segregation by Race and Class","url":"https://doi.org/10.1257/aer.20250115"},{"abstract":"Governments invoke national security to regulate foreign acquisitions of domestic firms. Why is ownership regulation a distinct policy margin beyond standard tools, like production subsidies and trade taxes? We show that contractual frictions make multinational firm boundaries central to geoeconomic policy. Within firms, ownership allocates residual control that affects outcomes through non-contractible decisions. Between governments, the absence of enforceable agreements makes the economic costs of conflict shape geopolitical bargaining. Foreign ownership depends on private returns to foreign control, but also determines national exposure to geopolitical conflict. It can increase foreign dependence, technology transfer, or sabotage scope. If such margins were contractible, the government could regulate them directly. When they are not, ownership regulation is the second-best tool that changes control rights and, thus, geopolitical outcomes. Consistent with our mechanism, U.S. regulation emphasizes the national-security risks of foreign control over firm decisions, has tightened with rising geopolitical tensions, and is tighter in sectors with higher exposure to defense demand and contractual frictions.","also_at":[],"analysis":null,"authors":["Rodrigo Adão","Olivier Kooi"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"41c1f46307c67a5a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Explores foreign-ownership regulation as a geopolitical tool affecting firm control and market exposure.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Who Can Control Our Firms? National Security and Foreign Ownership Regulation","url":"https://ideas.repec.org/p/nbr/nberwo/35958.html"},{"abstract":"We estimate the returns to specialization in medical oncology, in which subspecialists focus on specific cancer types. Using 2.2 million Medicare chemotherapy episodes from 2008–2020, we instrument for subspecialist access with differential distance to cancer-type-specific subspecialists versus general oncologists. Access to a relevant subspecialist reduces three-year mortality by 4.5 percentage points (10 percent), without increasing Medicare spending or measured provider fragmentation. Subspecialists also increase the use of newer therapies and diagnosis-specific clinical trials. These findings show that specialization raises productivity when expertise is closely matched to the task.","also_at":[],"analysis":null,"authors":["René Karadakic","David C. Chan Jr","Nancy L. Keating","Bruce E. Landon","Michael L. Barnett"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"411ede8d11bc7b97","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":1,"screen_reason":"Studies medical oncology specialization; limited relevance to macro or financial markets.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"The Value of (Sub) Specialization: Evidence from Oncology","url":"https://ideas.repec.org/p/nbr/nberwo/35946.html"},{"abstract":"This paper studies the impact of offshoring by US firms on voting patterns in the US. Using county-level voting data combined with industry-level offshoring data from 2000 to 2020, we ask whether an increase in employment at foreign affiliates of US multinational firms in vertically oriented industries is associated with an increase in the vote share for the incumbent party candidate in Presidential, House, and Senate elections. We find that offshoring leads to a significant increase in the incumbent vote share for counties with higher shares of college educated workers, and a significant decrease for counties with higher shares of workers in the manufacturing sector and in occupations that are more easily relocated abroad. These results are consistent with the labor market literature on offshoring and our own findings, which show that offshoring has heterogeneous effects on workers’ employment based on skill and occupational tasks. This suggests that voters respond to the economic effects of offshoring by rewarding or punishing incumbent party candidates.","also_at":[],"analysis":null,"authors":["Anna Maria Mayda","Lindsay Oldenski","Walter Steingress"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"40edcd2ba0493de9","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"The paper links offshoring and labor market outcomes to voting patterns, providing useful context for political economy and trade policy risks.","screening_tag":"DM","selected_in":[],"source":"boc","source_name":"Bank of Canada Staff Working Papers","tag":"DM","tag_inferred":false,"title":"Offshoring and Voting Patterns in the US","url":"https://ideas.repec.org/p/bca/bocawp/26-37.html"},{"abstract":"We show that cross-border learning is an important feature of modern semiconductor manufacturing and that several important channels – such as knowledge sharing along global supply chains, the movement of engineers within multinational firms, and foreign direct investment – operate through market mechanisms rather than anonymous technological spillovers. These findings have significant policy implications. When cross-border learning is mediated by purposeful economic relationships, access to frontier knowledge is neither automatic nor guaranteed. Firms and governments can facilitate - or restrict - the international diffusion of technology, implying that policies to foster domestic technological upgrading are likely to be most effective when coupled with continued access to global sources of frontier knowledge.","also_at":[],"analysis":null,"authors":["Pinelopi Koujianou Goldberg","Réka Juhász","Giulia Lo Forte","Jeff Thurk"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"3dbf360477b9feb1","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Cross-border semiconductor learning affects global tech supply chains and policy.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"How Knowledge Crosses Borders: Evidence from Semiconductor Manufacturing","url":"https://ideas.repec.org/p/nbr/nberwo/35879.html"},{"abstract":"This paper studies the utilization of dental services during the recent implementation of an adult (age 21 and over) Medicaid dental benefit in West Virginia. We analyze claims data and find: 1) before implementation, quarterly utilization of preventative and restorative services falls from 8% at age 20 to virtually 0% at age 21; 2) post-implementation, utilization falls from 8% at age 20 to 5% at age 21, implying a net increase of 50% of baseline utilization; 3) the net effect of the dental benefit is significantly larger in counties with a larger number of oral health care provider practices. Our results provide evidence that public health insurance expansions are dampened in markets with a limited supply of provider practices.","also_at":[],"analysis":null,"authors":["Daniel S. Grossman","Kole T. Reddig","Jane Ruseski","Fotinos Panagakos"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"3ce7a7831e07383a","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"Medicaid dental benefit study is health policy with limited macro market relevance.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Aging Out of Coverage: Lessons from the West Virginia $1,000 Adult Dental Benefit","url":"https://ideas.repec.org/p/nbr/nberwo/35844.html"},{"abstract":"This paper studies whether governments can change social norms that constrain women’s education and work, and through which mechanism. Albania’s 1967 religion ban, which created the world’s first atheist state, provides an extreme natural experiment: religious practice was outlawed nationwide, but a 1948 classification of historic monuments determined which religious buildings remained standing. We find larger increases in female employment and schooling where no monument survived. The public visibility of the old religious order appears to be the mechanism: effects are largest where no monument remained, smaller with rural-only monuments, and smallest with urban monuments; they also decline as monument count rises, regardless of denomination. We establish how social norms can outlive formal authority.","also_at":[],"analysis":null,"authors":["Richard Murphy","Shqiponja Telhaj"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"3cce0bbdfa126de1","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":1,"screen_reason":"Albania’s religion ban study is a niche social-norm case with little market impact.","screening_tag":"EM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":true,"title":"Losing Their Religion","url":"https://ideas.repec.org/p/nbr/nberwo/35933.html"},{"abstract":"Forecasts of the federal budget depend greatly on trends in medical spending. Since 1970, medical spending has nearly tripled as a share of gross domestic product (GDP). However, spending growth has barely exceeded GDP growth since 2010. This difference in growth rates makes forecasting spending difficult. I present scenarios for future spending derived from considering the sources of spending increase, ranging from rapid increases in new, expensive treatments to a reduction in spending due to cost-reducing technology. Even modest increases in spending relative to GDP are likely to overwhelm the federal government’s ability to pay for medical care using current tax instruments.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"Forecasts of the federal budget","flags":[],"in_issue":false,"rationale":"The abstract explicitly references the federal budget and the federal government, which refers to the United States.","relevance_note":"The findings suggest that even moderate shifts in medical spending trends pose significant challenges to the long-term sustainability of federal fiscal policy.","summary":"This paper examines how trends in medical spending influence federal budget forecasts. It highlights that while medical spending as a share of GDP nearly tripled since 1970, growth has slowed significantly since 2010, complicating long-term projections.","takeaways":["Medical spending as a share of GDP nearly tripled between 1970 and the present.","Growth in medical spending has barely exceeded GDP growth since 2010.","Modest increases in medical spending relative to GDP may exceed the federal government's current capacity to fund care through existing tax instruments."],"wording_correction":null},"authors":["David M. Cutler"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"3c190970d9155c7e","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Medical-spending forecasts directly shape US federal budget and fiscal-policy outlook.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Will Medical Care Strangle or Save the Federal Budget?","url":"https://ideas.repec.org/p/nbr/nberwo/35922.html"},{"abstract":"States that delegate governance to local officials face a trade-off between the benefits of local knowledge and the costs of biased administrators. Can imposing federal standards discipline bias and improve uniformity? We study this question by examining the introduction of federal standards to apply for citizenship under the 1906 Naturalization Act. Using newly-digitized census records covering over five million immigrants and a 30-year period, we show that standardizing adjudication of citizenship applications resulted in rapid convergence of naturalization practices across cities. While naturalizations were around 30% higher in election years pre-reform, this electoral cycle disappeared after the introduction of federal standards. Exploiting the staggered adoption of municipal civil service reforms aimed at removing patronage during the Progressive Era, we find that the reduction in political cycles was strongest in unreformed cities. Finally, the contraction in election year naturalizations changed the composition of new citizens. Affected cohorts earned 7% more, were more likely to enter citizenship-restricted occupations, and gave children more Americanized names. Our results thus show that standardizing administrative procedures can discipline politically-biased policy implementation.","also_at":[],"analysis":null,"authors":["Abhay Aneja","Guo Xu"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"3b798f2ffa490129","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Historical naturalization reforms have limited relevance to current macro or market issues.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"From Politics to Process: Evidence from Progressive Era Naturalizations","url":"https://ideas.repec.org/p/nbr/nberwo/35903.html"},{"abstract":"We characterize the size of the range of multiple equilibria in sovereign debt markets. We show that the nature of the equilibrium depends crucially on the degree of uncertainty, which we formalize first as uncertainty about primary balances and later as uncertainty about the fiscal feedback rule. For low uncertainty, the range can be large, but it becomes smaller as uncertainty becomes larger. If uncertainty is large enough, the multiplicity disappears: the interest rate is unique and becomes a continuous function of the debt level. The source of these results is that larger uncertainty decreases the effect of the perceived probability of default on the actual probability of default, thus reducing and eventually eliminating the scope for multiplicity. Interpreting the source of an increase in the interest rate in actual situations is difficult, and complicates the use of intervention by central banks.","also_at":[],"analysis":null,"authors":["Olivier J. Blanchard","Pedro Martínez-Bruera","Gonzalo Huertas"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"3a0b555d954f8ee8","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Analyzes sovereign debt market equilibria and uncertainty, directly informing debt sustainability and policy impacts.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Debt Sustainability and the Range of Multiple Equilibria","url":"https://ideas.repec.org/p/nbr/nberwo/35850.html"},{"abstract":"To study monetary policy transmission at the firm level, researchers typically consider heterogeneity along a small number of firm characteristics, such as size or leverage. We instead estimate the full distribution of firms’ investment responses to monetary policy, using a clustering regression framework. Our novel approach captures multidimensional and unobservable heterogeneity across firms and time. We find that investment by most firms in most time periods responds little to monetary policy. Only about 5 percent of firm-time observations are associated with a strong response. We then investigate the sources of heterogeneity ex post. We find that most of the variation in investment sensitivity arises within firms over time. Although several firm characteristics predict responsiveness to monetary policy, the majority of heterogeneity remains unexplained by firm observables. We demonstrate that our empirical estimates provide new targets for disciplining structural models of firm heterogeneity.","also_at":["https://ideas.repec.org/p/nbr/nberwo/35867.html"],"analysis":null,"authors":["Thomas Drechsel","Daniel J. Lewis","Davide Melcangi","Laura Pilossoph"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"38bacf789444079f","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"This research offers a new approach to understanding firm-level investment sensitivity to monetary policy, which is central to assessing policy transmission.","screening_tag":"DM","selected_in":[],"source":"fed-new-york","source_name":"Federal Reserve Bank of New York","tag":"DM","tag_inferred":true,"title":"The Investment Channel of Monetary Policy: Disentangling Firm Heterogeneity","url":"https://ideas.repec.org/p/fip/fednsr/103901.html"},{"abstract":"We study institutional cash management by constructing a novel dataset that records the specific money market funds (MMFs) held by each mutual fund in each month from 2010 to 2024. We document remarkably high inertia: more than half of mutual funds never switched their MMF choice throughout the sample period, despite non-negligible yield dispersion. To decompose the sources of this inertia, we develop a two-stage structural model that separately identifies the determinants of portfolio managers’ attentiveness (“waking up”) and their conditional preferences once attentive. We estimate the model using a methodology that combines BLP-style contraction mapping with maximum likelihood. We establish three main findings. First, MMFs with less attentive investor bases engage in greater liquidity transformation while offering lower yields. As a result, they earn higher profits and exhibit significantly higher survival rates, especially during periods of low interest rates. Second, we find that aggregate flows appear more yield-sensitive during low interest rate periods (the well-documented “reaching for yield” phenomenon) not because individual investors become more yield-seeking, but because a larger fraction of investors becomes attentive—a composition effect rather than a preference shift. Third, counterfactual analysis reveals a potential tension between market efficiency and financial stability if AI-driven automation reduces investor inattention. In the absence of inattention, fees fall by approximately half, yield dispersion collapses to near zero, and market concentration declines by roughly 20%, but monthly fund flows increase by about three times and the incidence of fund-months in which redemptions exceed a fund’s weekly liquid assets rises by about six times, raising the risk of fire sales and MMF runs.","also_at":[],"analysis":null,"authors":["Ali Hortaçsu","Younggeun Yoo"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"38af3bd49f8601fe","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Analyzes institutional money-market fund inertia and yield sensitivity, offering insights for cash-management and short-term market dynamics.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"When Cash Wakes Up: Inertia in Institutional Money Market Funds and the Potential Effects of AI Disruption","url":"https://ideas.repec.org/p/nbr/nberwo/35954.html"},{"abstract":"We study equilibrium market structure in a model of credit-market competition with correlated or uncorrelated screening errors and endogenous screening technologies. A pool externality arises because rejected borrowers reapply elsewhere, so lenders’ screening and pricing choices affect competitors’ applicant pools. With independent errors, a single market segment emerges, with rates rising smoothly as lenders who choose better technologies lend to more adversely selected borrowers. With correlated screening errors, potentially stemming from similar AI systems and overlapping financial-sector data, ex-ante identical lenders instead specialize across qualitatively distinct segments, generating a hockey-stick interest-rate schedule: segments with uniform rates but heterogeneous borrower quality coexist with segments featuring uniform quality but dispersed rates, echoing traditional banking, fintech, and high-rate indiscriminate lending. We show how technological and regulatory changes affecting screening costs, including frontier AI innovation and various forms of open banking, unevenly affect financial access and can either benefit or harm financially excluded borrowers.","also_at":[],"analysis":null,"authors":["Maryam Farboodi","Péter Kondor","Pablo Kurlat"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"3881eca503a40855","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"AI-driven credit screening impacts banking competition and regulation across markets.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Credit Markets with New Screening Technologies","url":"https://ideas.repec.org/p/nbr/nberwo/35905.html"},{"abstract":"Transformative AI promises to accelerate growth through productivity enhancement and automation. Yet automation on such a scale would raise the share of investment in output, potentially starving AI innovation of returns from a shrinking consumer market. We propose an endogenous growth framework to study this interaction, featuring research and entry decisions that propel AI advances but whose costs must be paid for by consumer demand. We identify several scenarios, spanning transformative AI, a demand bottleneck outcome where thinning consumer demand stalls AI progress, and intermediate cases in between. When anchored to evidence, the calibrated model points to the demand bottleneck as a highly plausible scenario, and projects more moderate growth in the coming years relative to recent studies such as Korinek et al. (2026). We draw policy implications, including for the natural rate of interest.","also_at":[],"analysis":null,"authors":["Phurichai Rungcharoenkitkul"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"3858d5e64cc4afd6","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Endogenous growth model links transformative AI to demand constraints and natural-rate implications for advanced economies.","screening_tag":"Transversal","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"Transversal","tag_inferred":false,"title":"Transformative AI and demand bottlenecks","url":"https://ideas.repec.org/p/bis/biswps/1381.html"},{"abstract":"Oversight changes the evidence it relies on. We ask when randomized audits and scoring align AI agents that can conceal misconduct and alter records. Stronger auditing makes undeterred violations better hidden. Because the provider writes the agent’s objective, sanctions need not stop at forfeiture, and rare audits deter every type of agent if evidence survives concealment and audit draws cannot be learned in advance. When evidence can be erased, deterrence must come from lower gains from violation, such as credit for stopping, or from costlier or fewer ways to conceal. These conditions identify what failed when agents in OpenAI’s cybersecurity evaluations compromised parts of Hugging Face’s infrastructure in July 2026.","also_at":[],"analysis":null,"authors":["Joshua S. Gans","Richard T. Holden"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"36a24142cb7dc13c","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"AI oversight theory lacks direct macro or market implications.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"When Does Randomized Oversight Align AI Agents That Can Conceal?","url":"https://ideas.repec.org/p/nbr/nberwo/35878.html"},{"abstract":"We quantify the effects of uncertainty about the conduct of monetary policy on asset prices. Nominal yields, real yields, stock returns, and implied volatilities all vary more on days with FOMC communication than on FOMC “blackout” days, consistent with policy communication being a source of risk. Furthermore, these asset prices all respond significantly to changes in interest-rate uncertainty around FOMC announcements, consistent with that risk being priced. A New Keynesian model with stochastic variation in the policy rule quantitatively matches this evidence. Our model shows that monetary-policy risk contributes to excess returns on equities and nominal bonds and accounts for much of the risk premium on inflation-indexed bonds. Transitory increases in monetary-policy risk lower stock and bond prices, reduce inflation-risk premia, and generate macroeconomic weakness similar to that produced by aggregate-demand shocks. The effective lower bound on interest rates reduces the size of monetary-policy risk in the model but magnifies its asset-pricing consequences, consistent with the data. We use our model to assess the effects of the increase in monetary-policy risk that occurred following the rapid tightening of policy in 2022.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"days with FOMC communication","flags":[],"in_issue":false,"rationale":"The abstract explicitly names the FOMC, which is the monetary policymaking body of the US Federal Reserve.","relevance_note":"The findings suggest that central bank communication is a priced risk factor that directly impacts the valuation of both equity and fixed-income markets.","summary":"This paper examines how uncertainty regarding monetary policy affects asset prices and risk premiums. Using a New Keynesian model, the authors find that policy communication acts as a source of risk that influences nominal yields, stock returns, and bond prices.","takeaways":["Asset prices show higher volatility on days with FOMC communication compared to blackout days.","Monetary-policy risk contributes to excess returns on equities and nominal bonds.","Transitory increases in policy risk lower stock and bond prices and generate macroeconomic weakness.","The effective lower bound on interest rates magnifies the asset-pricing consequences of policy risk."],"wording_correction":null},"authors":["Corey Feldman","Thomas B. King"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"34bcc95f6e494ecd","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Quantifies monetary-policy uncertainty risk and its impact on yields, stocks and bonds, directly informing markets and policy.","screening_tag":"DM","selected_in":[],"source":"fed-chicago","source_name":"Federal Reserve Bank of Chicago","tag":"DM","tag_inferred":false,"title":"Monetary-Policy Risk and Equilibrium Asset Prices","url":"https://ideas.repec.org/p/fip/fedhwp/103966.html"},{"abstract":"Congestion pricing policies are widely debated and critics often argue that toll costs outweigh congestion relief. We show theoretically that welfare gains depend on two forces: the extent of driver heterogeneity—both in preferences and in exposure to highly demanded roads and times of day—and the extent of revenue recycling. We quantify the impact of both forces using data from a large-scale experiment that tracked driving behavior with and without usage-based congestion pricing incentives for nearly 10,000 drivers over two years. Using a model of time-varying traffic equilibrium with heterogeneous drivers and a granular road network, we show that a congestion pricing policy using the experiment's price schedule would raise welfare by as much as adding a new lane to every highway and would raise enough revenue to fully compensate losers. Moreover, the extent of driver heterogeneity entails that optimal prices can improve net welfare with only a small fraction of toll revenue.","also_at":[],"analysis":null,"authors":["Itai Ater","Brad Ross","Adi Shany","Shoshana Vasserman"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"325abf3c3bc62eb3","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Empirical road pricing study with welfare implications for congestion policy.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Road Pricing under Heterogeneity","url":"https://ideas.repec.org/p/nbr/nberwo/35887.html"},{"abstract":"This paper shows that, once households hold intertemporal marginal propensities to consume out of income which are consistent with micro evidence, sectoral and trade frictions become central for the output response to a government spending shock in a small open economy. This result holds for both fixed and flexible exchange rate regimes, with the four-year cumulative multiplier out of a transitory spending shock reaching 1.5 and 1.4, respectively. The dampening effect of the frictions on international trade, a key determinant of the output response in highly open economies, explains why those multipliers are larger than the simple one-sector economy counterpart. Absent of the consumption impulse inherent to our heterogeneous-agent economy, trade frictions matter much less for fiscal multipliers.","also_at":[],"analysis":null,"authors":["Charles de Beauffort","Ansgar Rannenberg"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"311104b5b4da32ba","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Quantifies fiscal multipliers with trade frictions, informing fiscal policy and open-economy growth forecasts.","screening_tag":"Transversal","selected_in":[],"source":"nbb","source_name":"National Bank of Belgium Working Papers","tag":"Transversal","tag_inferred":false,"title":"Trade Frictions and the Small Open-Economy Fiscal Multiplier","url":"https://ideas.repec.org/p/nbb/reswpp/202610-503.html"},{"abstract":"This paper examines the revenue and migration impact of the 2026 California Billionaire Tax Act, a one-time 5 percent tax on the worldwide net worth of individuals exceeding $1 billion. Using data from the Forbes Billionaire List, news reports detailing the residential real estate holdings of California billionaires, and public announcements of billionaire departures from the state, we estimate the behavioral response and associated revenue loss to this new tax using several different methodologies. Even before accounting for reductions in other tax bases such as the income tax, we estimate that the Act will collect approximately $30 billion (range $28 to 36 billion), less than a third of the $100 billion projected by Galle et al. (2025). This range accounts for the publicly confirmed taxpayer migration that has already eliminated nearly 30 percent of the Act's wealth tax base, applies a litigation-survival discount to the remaining base, and is validated by the wealth tax base elasticity literature. We estimate that California's billionaires contribute $3.3–5.8 billion annually in state income taxes. The present value of permanently lost income tax collections from departures more than offsets the one-time wealth tax revenue, yielding a net present value of negative $38.9 billion. Across 100,000 simulated revenue and discount rate combinations, 85 percent of plausible outcomes produce a negative net present value of state revenues.","also_at":[],"analysis":null,"authors":["Benjamin Jaros","Joshua Rauh"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"30da2f7a96fe094c","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Estimates revenue and migration impact of California billionaire tax, crucial for US fiscal and market outlook.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"The Net Present Value of the California Billionaire Tax Act","url":"https://ideas.repec.org/p/nbr/nberwo/35899.html"},{"abstract":"Behavioral finance seeks to improve our understanding of markets, investors, and firms by adopting a psychologically realistic description of how people think. While behavioral finance ideas have been part of human discourse for decades if not centuries, the modern research effort in the field began in the 1980s. Forty years later, behavioral finance is a vibrant area of financial economics. In this article, I explain why by reviewing some of its recent progress. I focus on three topics – beliefs about future earnings, beliefs about future returns, and prospect theory – and on their applications to understanding asset prices and investor behavior. I close by commenting on some new directions in the field – cognitive foundations, non-traditional decision processes, and artificial intelligence.","also_at":[],"analysis":null,"authors":["Nicholas C. Barberis"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"2fbb8e4045abbb03","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"Review of behavioral finance progress, primarily academic with indirect market relevance.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Behavioral Finance at 40","url":"https://ideas.repec.org/p/nbr/nberwo/35959.html"},{"abstract":"How do depopulation and population aging evolve differently across regions within a country, and what are their implications for aggregate economic activity and regional inequality? Using spatially disaggregated data from Japan over the past several decades, we show that rural areas have experienced significantly faster depopulation and aging than urban areas, driven by low fertility and sustained out-migration of young cohorts. Regions undergoing these trends face declining local amenities and rising per-capita public service costs. To study the future evolution and economic consequences of these dynamics, we develop and calibrate a dynamic life-cycle spatial general equilibrium model. The model predicts widening geographic disparities in depopulation, aging, and economic activity in the coming centuries. While subsidies to declining regions can lower regional inequality, they come at the cost of lower aggregate efficiency and higher public service expenditures.","also_at":[],"analysis":null,"authors":["Elisa Giannone","Yuhei Miyauchi","Nuno Paixao","Xinle Pang","Yuta Suzuki"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"2e848a94d9ce074d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":3,"screen_reason":"Examines Japanese depopulation and aging, tangential to macroeconomic growth.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Living in a Ghost Town: The Geography of Depopulation and Aging","url":"https://ideas.repec.org/p/nbr/nberwo/35852.html"},{"abstract":"Health care utilization per capita varies widely across the United States, yet higher utilization areas have no better patient health. In the late 2000s, this pattern was widely interpreted as evidence that health care costs could be cut substantially without harming patients, which in turn shaped the 2010 Affordable Care Act. We describe how our understanding has since evolved, emphasizing three points. First, new evidence indicates quantitatively meaningful roles for both supply-side and demand-side factors in driving regional variation in health care and in health outcomes. Second, health care productivity varies substantially across providers; improving it requires better understanding of why productivity differs. Third, we know even less about the sources of area-level productivity differences. We suggest several ways in which greater engagement with the productivity literature outside of health care could yield valuable insights.","also_at":[],"analysis":null,"authors":["Amy Finkelstein","Jonathan S. Skinner"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"2d3f3686965dda42","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"US health-care productivity insights affect fiscal outlook and policy debates on spending.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Regional Variations and Productivity Puzzles in Health Care","url":"https://ideas.repec.org/p/nbr/nberwo/35937.html"},{"abstract":"We study the equilibrium and welfare effects of the minimum wage when product market power is endogenous and varies with the degree of market competition. A higher minimum wage reallocates workers from small to large firms. Large firms gain market share and increase their price markups. We call this mechanism 'the concentration channel' of the minimum wage. We develop an equilibrium model with frictional labour markets and oligopolistic product markets. We estimate the model using Italian administrative data, replicating the structure of detailed labour and product markets. We find that both the aggregate labour share and consumption are hump-shaped in the minimum wage, due to the opposing responses of price markups and wage markdowns. The optimal minimum wage directly affects 10 per cent of workers. Endogenous product market power lowers the optimal minimum wage. We also provide empirical evidence supporting the concentration channel.","also_at":[],"analysis":null,"authors":["Salvatore Lo Bello","Lorenzo Pesaresi"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"2c918e014ac2cf9e","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"The study explores the 'concentration channel' of minimum wage policies, providing relevant analysis for labor market and competition policy discussions.","screening_tag":"DM","selected_in":[],"source":"banca-ditalia","source_name":"Banca d'Italia Temi di discussione","tag":"DM","tag_inferred":false,"title":"The concentration channel of the minimum wage","url":"https://ideas.repec.org/p/bdi/wptemi/td_1547_26.html"},{"abstract":"What are the implications of unequal access to innovation careers for the direction of innovation and inequality? Leveraging novel linked datasets in the United States and Finland, we document that innovators create products more likely to be purchased by consumers like them in terms of gender, socioeconomic status, and age. Homophily exists both within narrow product categories and across industries and has been stable in recent decades. Incorporating this “social push” channel into a growth model, we estimate that unequal access to innovation careers has a large effect on cost of living inequality and long-run growth. (JEL D63, J16, L26, M13, O31, O33, O47)","also_at":[],"analysis":null,"authors":["Elias Einiö","Josh Feng","Xavier Jaravel"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"crossref issue date (month)","doi":"10.1257/aer.20231417","doi_registered":"2026-10-01","flags":[],"group":"journal","id":"2c75c0370f711a5c","issue_date":"2026-10-01","kind":"journal","publication_month":"2026-10","relevance":3,"screen_reason":"Studies innovation bias and inequality, tangential to macro but limited immediate market impact.","screening_tag":"Transversal","selected_in":[],"source":"aer","source_name":"American Economic Review","tag":"Transversal","tag_inferred":false,"title":"Social Push and the Direction of Innovation","url":"https://doi.org/10.1257/aer.20231417"},{"abstract":"Standard monetary policy in currency unions targets aggregate averages, ignoring crosssectional business cycle dispersion. Incorporating downward nominal wage rigidity into a multi-country New Keynesian framework, we analyze optimal monetary policy when asymmetric shocks generate regional labor market slack. Optimal policy pursues a capped “grease-the-wheels” strategy, balancing the benefits of eroding rigid real wages against price dispersion costs. Crucially, for a given level of aggregate unemployment, optimal policy is strictly less inflationary under cross-sectional shocks than under aggregate shocks. This occurs because inflating the union imposes costly price dispersion across all member states while easing slack in only a subset, and because terms-of-trade leakage further diminishes inflation’s effectiveness in constrained regions. Consequently, optimal monetary policy must look beyond union-wide averages and condition its stance on the share of constrained member states.","also_at":[],"analysis":null,"authors":["Michal Kobielarz","Christian Probsting"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"2bb0e16ec5bc988c","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Examines optimal monetary policy in a currency union with wage rigidity, directly informing euro-area policy debates.","screening_tag":"DM","selected_in":[],"source":"nbb","source_name":"National Bank of Belgium Working Papers","tag":"DM","tag_inferred":true,"title":"More than average – designing monetary policy in a currency union with downward nominal wage rigidity","url":"https://ideas.repec.org/p/nbb/reswpp/202610-499.html"},{"abstract":"An advertiser in a second-price auction sees what it paid, not the rival bids that supposedly set the price. Akbarpour and Li (2020) show that an auctioneer can therefore charge a winner up to its bid undetected. The Federal Trade Commission alleges that Amazon’s advertising auctions, described as second-price, used soft reserves that did this. We ask whether repeated bidding exposes such charges and what adjustment does to welfare. If each charge equal to the bid is flagged, the soft reserve is exposed quickly, however much the advertiser trusted the description. If reports show only win rates and expected charges, it is indistinguishable from a second-price auction at any fixed bid: an advertiser that trusts the description and bids its value never learns, and one that doubts it but bids for current profit needs a number of auctions at least inversely proportional to its doubt before it considers a soft reserve more likely than not. The second-price description and aggregate reporting are complements. Among informed, symmetric advertisers, the soft reserve raises no more revenue than a second-price auction, and when only some advertisers adjust, placements are misallocated. Disclosure returns surplus to advertisers; removing the surcharge also restores efficiency.","also_at":[],"analysis":null,"authors":["Joshua S. Gans"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"28a1baee3e12f1ec","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Studies soft reserves in ad auctions, relevant to digital advertising market practices.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Soft Reserves, Learning and Bid Adjustment in Advertising Auctions","url":"https://ideas.repec.org/p/nbr/nberwo/35841.html"},{"abstract":"This paper considers the estimation of heterogeneous impacts within a Randomized Controlled Trial (RCT) in a situation where heterogeneous status is endogenous and is not fully observed in the control sample. We show how to use information in the treatment sample and a noisy signal on the heterogeneous status to estimate meaningful impacts under a minimal set of assumptions. We provide an application of this approach to a data set from Ghana, collected around a clustered RCT to evaluate the impacts of an early-years intervention, differentiating the impact between households that participate actively in the program from those who participate only passively, as recipients. We show that, for some outcomes, the properly estimated heterogeneous impacts differ substantially from those computed with a naive estimator.","also_at":[],"analysis":null,"authors":["Orazio Attanasio","Lina Cardona-Sosa","Ziqian Liu"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"27f72f69a4673170","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Methodological paper on heterogeneous impacts in Ghana RCT, limited macro relevance.","screening_tag":"EM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":false,"title":"Estimating Heterogeneous Impacts with Endogenous Participation and Non-Compliance","url":"https://ideas.repec.org/p/nbr/nberwo/35872.html"},{"abstract":"Artificial intelligence (AI) has a double-edged relationship with financial stability: it may improve efficiency and risk management, while also creating new vulnerabilities and amplification channels. This paper studies whether market-perceived exposure to AI is reflected in the tails of financial-sector returns, and whether this relationship depends on macroeconomic conditions. We develop a framework that decomposes financial-sector tail outcomes across contemporaneous AI and macroeconomic scenarios, and identifies whether the AI-related episodes are primarily associated with extreme gains or losses. Using daily equity returns for financial sectors in Canada, the United States, Europe, the United Kingdom, and China, we document substantial heterogeneity. Financial-sector-specific scenarios dominate tail outcomes across markets, while the contribution of AI-related scenarios to return asymmetry differs substantially across countries. AI-sector scenarios contribute to downside asymmetry in Europe, China, and especially the United Kingdom, but make only a limited contribution in Canada and have the smallest tail weights in the United States. China is the only market exhibiting positive average skewness, driven by the financial and systemic scenarios rather than by AI-related outcomes. Overall, AI-related market movements are neither uniformly stabilizing nor destabilizing; their financial-stability interpretation depends on the market considered and on whether AI-sector tail events occur in isolation or jointly with broader macroeconomic movements.","also_at":[],"analysis":null,"authors":["Javier Ojea Ferreiro","Andrea Ugolini","Juan C. Reboredo"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"277cabe6e0099ff6","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Analyzes AI-related tail risks in financial-sector returns across major markets, relevant for risk management.","screening_tag":"Transversal","selected_in":[],"source":"boc","source_name":"Bank of Canada Staff Working Papers","tag":"Transversal","tag_inferred":false,"title":"Artificial Intelligence and Financial Tail Risks","url":"https://ideas.repec.org/p/bca/bocawp/26-40.html"},{"abstract":"This paper investigates whether the primary current account that consumers typically use for their everyday shopping and banking transactions remains an effective cross-selling channel for banks amid digitalisation, regulatory reform and increased competition. Using a unique 2024 consumer survey of 2,326 Dutch consumers, we find no evidence of a broad structural decline in banks’ overall cross-selling opportunities in the Netherlands. The primary current account continues to “anchor†bank-customer relationships. However, this anchoring role varies by product category and consumer segment. Cross-selling has weakened for savings and investment products, while remaining relatively stable for mortgages. Furthermore, digitalisation is not only associated with more multi-banking but also supports financial product acquisition at the consumers’ main bank, suggesting that it does not uniformly erode incumbent banks’ cross-selling capacity. Consumer preferences are central: perceived benefits of single-banking strengthen cross-selling and reduce multi banking, whereas perceived transparency of financial conditions has a modest effect.","also_at":[],"analysis":null,"authors":["Wilko Bolt","Nicole Jonker"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"26cab2e35d94af89","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Focuses on Dutch consumer banking behavior, limited macro or market implications.","screening_tag":"DM","selected_in":[],"source":"dnb","source_name":"De Nederlandsche Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Consumer multi-banking and bank cross-selling of financial services","url":"https://ideas.repec.org/p/dnb/dnbwpp/873.html"},{"abstract":"Do early investments in parents pay off even when treatment effects for children appear to fade out quickly? We answer this question by leveraging a field experiment in which households with 3-5 year-old children were randomized into a parenting program, a preschool, or a control group, combined with a natural experiment (Covid-19 school closures) that occurred ten years later. Prior to the closures, treatment effects on academic achievement had faded to zero across all groups. Yet, with Covid-19 school closures, effects of the parenting program re-emerge: test scores in control and preschool groups drop by roughly 0.25-0.30 SD, whereas scores in the parenting group drop by only 0.11 SD (difference: p = 0.01). Our findings suggest that parenting programs can generate latent human capital that only becomes visible when complementary school inputs are removed. This result is consonant with parental and school investments acting as substitutes in skill production. Because this latent parental capacity pays off precisely when school inputs fail, standard measurement tools for early childhood programs can miss crucial state-contingent value.","also_at":[],"analysis":null,"authors":["Shruti Jha","John A. List","Rebecca C. Royer","Anya Samek"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"259297e1276e3cb4","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Evaluates early parenting interventions, not directly tied to macro or market outcomes.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Latent Human Capital: How Early Investments in Parents Buffer Against Future Schooling Shocks","url":"https://ideas.repec.org/p/nbr/nberwo/35851.html"},{"abstract":"Whether imposing higher taxes on business owners adversely affects business activity by constraining investment and inducing capitalist flight is a central question in the ongoing debate on how to tax the ultra wealthy. To shed new light, I exploit a series of related Norwegian reforms during 2021–2024 that increased dividend tax rates, removed migration-related capital gains tax loopholes, and nearly doubled the effective marginal tax rate on business wealth. These reforms spurred international debate and, allegedly, an “exodus” of Norwegian billionaires (Financial Times, 2023). While I document clear effects on migration, these responses are concentrated among the top 0.1% of the wealth distribution and mostly confined to 2022 and 2023. My results indicate that at most 100 individuals left due to the reforms. I find no evidence of significant outmigration or reduced inflows of startup founders or inventors. I estimate that absent any outmigration, wealth tax revenues would have increased by 75% from 2021 to 2024. Reform-driven outmigration lowers the revenue gain to 71.5%. My findings further show that outmigrating owners’ firms remain economically active and do not reduce investment. In a broader set of analyses, I examine whether business outcomes are affected, regardless of whether owners outmigrate, since firms may reduce investment both due to liquidity constraints or distortions to owners’ savings decisions. I compare firms owned by Norwegian individuals subject to the wealth tax with firms owned by foreigners and other tax-exempt entities. By merging historical ownership data from Orbis with the Norwegian shareholder register, I perform these analyses on both Norwegian and foreign-domiciled firms. Across settings, I find no evidence that Norwegian-owned firms pay out more dividends or invest less after the reforms, nor is there any evidence that the reform induced more bankruptcies. These findings indicate that the short-run economic costs of wealth taxation, in terms of migration and firm investment, are more limited than the public debate implies.","also_at":[],"analysis":null,"authors":["Marius A. K. Ring"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"2531d88c0876e80f","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Evaluates Norway's wealth-tax reforms and migration effects, informing tax policy and capital-flow expectations.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Taxing Entrepreneurial Wealth: Evidence from Norway, 2021–2025","url":"https://ideas.repec.org/p/nbr/nberwo/35854.html"},{"abstract":"We study how news shocks affect inflation in open economies, using large oil and gas discoveries with realized production lags of at least five years as observable news about future output. Panel local projections show that discoveries raise core consumer prices over the subsequent decade, with about half the increase occurring prior to extraction. The response is driven by nontradables, while tradable and producer prices barely respond. The real exchange rate appreciates persistently and real activity expands ahead of extraction, while the current account first deteriorates and then improves as new oil comes online. The inflationary response is concentrated under inflexible exchange-rate regimes but muted under flexible ones. A three-sector New Keynesian small open economy model rationalizes these findings through competing demand and exchange rate channels, with exchange-rate policy determining which force dominates.","also_at":[],"analysis":null,"authors":["Bohou Cai","Liugang Sheng","Hongyan Zhao"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"218f16b5183e785d","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Shows how oil discovery news impacts inflation and exchange rates, informing commodity-linked market and policy outlooks.","screening_tag":"Transversal","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"Transversal","tag_inferred":false,"title":"News shocks and inflation: theory and evidence from large oil discoveries","url":"https://ideas.repec.org/p/bis/biswps/1389.html"},{"abstract":"We model a finite-horizon game of repeated oligopoly competition in which sellers choose quantities of a homogeneous product with linear demand and have private information about their own marginal costs, which are serially correlated over time. Focusing on fully separating equilibria, we provide conditions for existence and uniqueness. Relative to static complete- and incomplete-information benchmarks, sellers' incentives to signal low costs can substantially affect output, productive efficiency, and welfare, even when there are ten or more sellers. We apply the model to the global oil market, and compare predictions to a model where sellers can make quantity commitments.","also_at":[],"analysis":null,"authors":["Andrew Sweeting","Xuezhen Tao","Qian Wang"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"1f89711478ec5068","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Models quantity signaling in oligopoly, applied to oil market, informing commodity dynamics.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Producing to Signal: Private Information in Dynamic Quantity Competition","url":"https://ideas.repec.org/p/nbr/nberwo/35883.html"},{"abstract":"The return covariance matrix is widely assumed to have an eigenvalue cliff: a few large eigenvalues, then a bounded bulk, as in the approximate factor structure of Chamberlain and Rothschild (1983). This premise underlies factor tests, principal-component methods, and large-covariance estimation. These methods estimate moments from returns pooled across states, so they necessarily view a conditional world unconditionally. We show that, generically, this view removes the cliff: a conditional model with a few factors is, unconditionally, an infinite-factor model in which infinitely many eigenvalues diverge. This holds for the characteristic-managed portfolios that machine-learning methods trade, and for individual stocks whose loadings differ persistently across firms. Yet as long as conditional expected returns admit no asymptotic arbitrage, the maximal Sharpe ratio stays finite. For generic expected returns, infinitely many components are priced, so no finite set of principal components spans expected returns. Reducing returns to a few principal components therefore discards priced risk.","also_at":[],"analysis":null,"authors":["Mikhail Chernov","Bryan T. Kelly","Semyon Malamud","Johannes Schwab"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"1e3b222a50c56556","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Shows infinite-factor asset-pricing implications, affecting risk-modeling and portfolio construction.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Infinite Factor Structure in Conditional Asset Pricing","url":"https://ideas.repec.org/p/nbr/nberwo/35910.html"},{"abstract":"We use newly linked IRS data to study how US multinationals use tax-planning structures that exploit mismatches between US and foreign tax laws. In 2016, these structures accounted for 36% of foreign profits despite being adopted by only 18% of firms. We develop and estimate a structural model using adoption patterns and changes in foreign effective tax rates, domestic and foreign investment, and global R&D following adoption. The model implies substantial heterogeneity in adoption costs and benefits and shows that restricting tax planning creates tradeoffs between tax revenue and economic activity that are amplified by global R&D linkages.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"US multinationals use tax-planning structures","flags":[],"in_issue":true,"rationale":"The abstract references US multinationals and IRS data, naming the United States economy.","relevance_note":"Understanding the scale and effects of U.S. multinational tax planning helps policymakers gauge revenue impacts and economic consequences of tightening tax rules.","summary":"The paper uses newly linked IRS data to study how US multinationals use tax-planning structures that exploit mismatches between US and foreign tax laws. In 2016 these structures accounted for 36% of foreign profits despite being adopted by only 18% of firms, and an estimated structural model implies substantial heterogeneity in adoption costs and benefits.","takeaways":["In 2016, tax-planning structures accounted for 36% of foreign profits despite being adopted by only 18% of firms.","The structural model is estimated using adoption patterns and changes in foreign effective tax rates, domestic and foreign investment, and global R&D following adoption.","The model implies substantial heterogeneity in the costs and benefits of adopting these structures.","According to the model, restricting tax planning creates tradeoffs between tax revenue and economic activity that are amplified by global R&D linkages."],"wording_correction":{"checked":"2026-11-03","human_reviewed":true,"made_by":"Claude (AI assistant)","reason":"The model said the structures \"generated\" 36% of foreign profits where the abstract says they accounted for that share, and wrote that the model \"shows\" and \"reveals\" what the abstract says it implies.","source":"Abstract of the NBER working paper"}},"authors":["Rosanne Altshuler","Lysle Boller","Kevin A. Roberts","Juan Carlos Suárez Serrato"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"1dad933b4d92414c","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"Analyzes US multinationals' tax planning, directly relevant to corporate tax policy and global investment.","screening_tag":"DM","selected_in":["2026-10"],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Tax Planning and Multinational Behavior","url":"https://ideas.repec.org/p/nbr/nberwo/35874.html"},{"abstract":"Can we explain asset price movements even with ex post observations of their drivers? Reinterpreting Roll’s (1988) AFA Presidential Address, “R2,” as a modern empirical exercise, we show that conventional macroeconomic, cash-flow, expectations, and flow variables deliver out-of-sample R2 values that are often negative and otherwise below 10% for monthly U.S. equity returns and are unavailable at the daily frequency. We use generative AI to extract newspaper-stated reasons from Wall Street Journal market summaries and filter out price and return language. These reasons explain around 30–40% of daily and monthly returns out of sample. Their content maps to interpretable themes, including corporate news, macroeconomic conditions, monetary policy, sentiment, and geopolitics.","also_at":[],"analysis":null,"authors":["Bryan T. Kelly","Yinan Su","Chao Zhang"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"15893aa137e8e843","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Provides out-of-sample return explanations using AI-derived news factors, directly useful for equity strategies.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Explaining Realized Returns: Roll’s R2 40 Years Later","url":"https://ideas.repec.org/p/nbr/nberwo/35885.html"},{"abstract":"We look at the effects of debt and primary fiscal balances on sovereign credit ratings through the lens of a simple model. We find that the ratings differ from the implications of the model in three important ways. They give much more weight to debt relative to forecast primary balances. They understate the effects of the difference between the interest rate and the growth rate. They give a very large role to country effects. For the same level of debt and forecast primary balances, they imply extremely different ratings across countries, and imply extremely different levels of debt needed to reach a given rating.","also_at":[],"analysis":null,"authors":["Olivier J. Blanchard","Daniel Leigh","Prachi Mishra"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"117b8f561af80929","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Links debt and deficits to sovereign ratings, directly affecting bond markets and fiscal risk assessments.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Ratings, Debt, and Deficits: An Exploration","url":"https://ideas.repec.org/p/nbr/nberwo/35956.html"},{"abstract":"Governments increasingly use trade and industrial policy to reshape where multinationals produce, yet standard measures of this geoeconomic pressure are aggregate and cannot detect origin-specific discrimination. We build a bilateral, directional index of relative protectionism that measures how restrictive a destination is toward a given origin. We combine it with bilateral geopolitical risk indices and global ownership links over the period 2010-21, and estimate a gravity-type Poisson-Pseudo Maximum Likelihood model with three-way fixed effects. Our results show that where bilateral protectionism is greater, foreign-affiliate presence is markedly smaller: a 1 percentage point increase in the index is associated with 1.3% fewer subsidiaries than that origin-destination pair would otherwise have. The main mechanism runs through an operational hostility channel (e.g. discriminatory subsidies, procurement exclusion), which outweighs an offsetting tariff-jumping channel and concentrates in non-tradable sectors, where serving the market requires local presence. The estimates show no evidence of anticipation and are robust to longer lags and sample splits. Bilateral geopolitical risk enters with the same negative sign, adding a smaller but complementary layer of fragmentation risk to the effect of geoeconomic policy.","also_at":[],"analysis":null,"authors":["Luca Barbaglia","Marina Diakonova","Luis Díez-Catalán","Corinna Ghirelli","Alice Lia","Javier J. Pérez","Stefano Verzillo"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"0e1ca7e076ffb6ff","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Measures bilateral protectionism’s effect on foreign affiliate location, relevant for multinational investment flows.","screening_tag":"Transversal","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"Transversal","tag_inferred":false,"title":"Moving Out: Geoeconomic Policy and the Relocation of Foreign Affiliates","url":"https://ideas.repec.org/p/bde/wpaper/2633e.html"},{"abstract":"This paper studies policy interventions intended to eliminate gender differences in labor market outcomes, principally wages. Because gender is an individual attribute rather than a manipulable treatment, the ideal experiment of randomly assigning gender to evaluate its effects is infeasible. Policies that remove gender labels from the employment process are the closest feasible counterpart. We quantify both the intended and unintended consequences of the policies through simulated interventions of an estimated equilibrium model of statistical discrimination with dynamic choices of education and labor market participation. In the short run the policy that requires gender free applications in the market for skilled labor eliminates wage gaps but once education choices respond the effects are attenuated. A more comprehensive policy that enforces gender free compensation reverses the wage gap in skilled markets and eliminates it in unskilled labor markets, even once education adjusts. These interventions impact college rates, the college premium gap and participation rates as well. The final section studies these interventions using a difference-in-differences (DID) approach to analyze the simulated data. With education fixed, the DID method recovers the policy effects but this is not the case once education adjusts, reflecting the effects of the intervention on both treated and control groups through equilibrium adjustments in beliefs.","also_at":[],"analysis":null,"authors":["Carla Varona Cervantes","Russell Cooper"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"0d5303cf6c04e274","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Simulates gender-gap policy impacts on wages, limited direct market implications.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Implications of Policy Interventions on Eliminating Gender Gaps","url":"https://ideas.repec.org/p/nbr/nberwo/35935.html"},{"abstract":"Agent-based models (ABMs) typically rely on equations to incorporate agents' decision-making, ranging from ad-hoc rules or simple heuristics to complex, theory- or data-driven approaches. Recent advances in large language models (LLMs) make it possible to represent economic decision-making through information-conditioned decisions rather than explicitly specified behavioural equations. However, whether LLM-driven agents can feasibly replace individual components in an ABM and the degree to which they can replicate observed economic dynamics remains insufficiently understood. In particular, it is unclear whether the integration of LLM-driven agents in a macroeconomic ABM can generate historically plausible macroeconomic trajectories and how their performance depends on the information provided to them and on the scale of the underlying model. This paper addresses these questions by introducing an LLM-driven bank agent into a data-driven macroeconomic model of the Greek economy, where it determines consumer credit and lending rates. Results show that the LLM-driven agent's decisions can reproduce historical consumer credit dynamics relatively well, although their performance in replicating lending rates is weaker and more heterogeneous; broader economic information generally improves performance, while larger models do not systematically outperform smaller ones. Overall, the study provides encouraging evidence that LLM-driven agents can be feasibly integrated into macroeconomic ABMs, assimilating economically relevant information and producing outcomes that closely match observed data, without requiring explicit functional forms for behavioural relationships - pointing towards the possibility of enabling economic simulations to shift from equations to prompts.","also_at":[],"analysis":null,"authors":["Georgios Papadopoulos"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"0b883923b70fe37c","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":4,"screen_reason":"Explores LLM-driven agents in macro ABM, methodological focus with limited immediate market implications.","screening_tag":"Transversal","selected_in":[],"source":"bog","source_name":"Bank of Greece","tag":"Transversal","tag_inferred":false,"title":"From equations to prompts: integrating LLMs into a hybrid macroeconomic ABM","url":"https://ideas.repec.org/p/bog/wpaper/371.html"},{"abstract":"An unexpected increase in energy costs raises inflation directly through flexibly-set prices. Whether that shock amplifies to a larger and persistent rise in inflation depends on its transmission through the economy. This paper examines four channels of transmission of the Iran conflict to inflation in the EA, UK, and the US. The first is the transmission to the sticky prices in core sectors. Recent advances in menu cost models predict that inflation will rise faster than usual and monetary policy is less powerful to curb it. The second is transmission to spending, wages, and nominal returns through higher expected inflation. The empirical literature on household and firm inflation expectations points to some evidence for this amplification. The third channel is through other aggregate demand policies, especially fiscal policy. The IMF’s reassessments of the fiscal outlook provide some guarded grounds for optimism. The fourth mechanism is through an erosion in the credibility of the long-run inflation target. Data from market prices indicates that the inflation anchor has not moved. All combined, the data as of May 2026 suggests that the Iran war shock will have a significant impact on inflation that persists into 2027, but that is smaller and more short-lived than the 2021–24 inflation disaster.","also_at":[],"analysis":null,"authors":["Ricardo Reis"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"0ae54775e9308b82","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Examines inflation transmission channels from Iran conflict for EA, UK, US, pertinent to near-term price outlook.","screening_tag":"DM","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"DM","tag_inferred":false,"title":"Inflation after the Iran war","url":"https://ideas.repec.org/p/bis/biswps/1384.html"},{"abstract":"This paper investigates whether US tariffs on China diverted Chinese exports towards the EU, exploiting the first US-China trade war as a setting that permits clean identification of trade diversion effects. Applying difference-in-differences local projections to highly disaggregated tariff, import and unit value data, it shows that trade diversion occurred but was limited in size. For each dollar reduction in US imports from China, 9 cents were redirected to the EU market in real terms. The effects varied substantially across products and destination markets. Trade diversion was strongest for complex capital goods and homogeneous intermediate inputs, and was more pronounced in EU markets with greater import exposure to China and weaker competition from alternative suppliers. Products experiencing effective diversion also exhibited significant price declines, with competitive pressures concentrated in lower-price market segments. These findings suggest that tariffs of a magnitude comparable to those imposed by the United States in 2025 could redirect Chinese exports towards the EU, potentially contributing to a second “China shock” in Europe. While the aggregate effects are modest, diversion and price pressures may be considerably stronger in specific product categories and destination markets.","also_at":[],"analysis":null,"authors":["Irina Balteanu","Maximiliano Moreno","Francesca Viani"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"0a7c83d45dff0e82","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Quantifies US tariff-induced trade diversion from China to EU, informing trade-policy and sectoral market impacts.","screening_tag":"Transversal","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"Transversal","tag_inferred":false,"title":"Flooded by China? Trade diversion due to US tariffs during Trump’s first mandate","url":"https://ideas.repec.org/p/bde/wpaper/2634e.html"},{"abstract":"This paper studies how views on climate change shape household inflation expectations. Us-ing a new representative survey of Dutch households, we elicit perceptions of climate change, the green transition and climate policies, and their expected effects on long-run inflation. House-holds expect climate change, the green transition and three types of climate policies – carbon pricing, support for the green transition and support for green innovation – to raise inflation and inflation volatility over the next ten years. Climate change is expected to have the largest effect, while support policies are expected to have the smallest. These results suggest that climate-related beliefs are linked to the anchoring of inflation expectations and that support policies for the green transition and green innovation may facilitate the net-zero transition while keeping in-flation expectations relatively well anchored. We also document significant heterogeneity across households. Expected inflationary effects of climate change are larger among respondents who anticipate more severe global warming and extreme weather. Climate-related inflation concerns are widespread across demographic groups.","also_at":[],"analysis":null,"authors":["Gabriele Galati","Fulvia Marotta","Richhild Moessner","Maarten van Rooij"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"08ca8d2873c6e931","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":7,"screen_reason":"Links climate-change beliefs to inflation expectations, pertinent for monetary-policy outlook.","screening_tag":"DM","selected_in":[],"source":"dnb","source_name":"De Nederlandsche Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Inflation Expectations in the Context of Climate Change and the Green Transition","url":"https://ideas.repec.org/p/dnb/dnbwpp/875.html"},{"abstract":"We analyze the academic affiliations of nearly 6,000 award-winning researchers in 18 major fields in the natural sciences, engineering, and social sciences from the 1820s to the 2020s, focusing on the 1960s onward. The analysis reveals a trend of declining concentration in the institutional affiliations of award-winning researchers, shifting from a few science-strong universities in high-income countries to a more diverse set of institutions across the world. The decline in concentration is observed in all fields except one: economics. The institutional affiliations of prizewinning economists have become more concentrated over time, making economics the most concentrated field. We associate the higher concentration of prizewinning work in economics with the field’s stronger sorting by institutional prestige, its lower reliance on specialized equipment and instruments, and its assessment of findings based on a synthesis of evidence rather than on decisive experiments or proofs. We discuss the benefits and costs of this high and rising institutional concentration of prizewinning economists.","also_at":[],"analysis":null,"authors":["Richard B. Freeman","Danxia Xie","Hanzhe Zhang","Hanzhang Zhou"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"08a9f083603b75d6","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Focuses on academic affiliation trends, little direct market or policy impact.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"High and Rising Institutional Concentration of Award-Winning Economists","url":"https://ideas.repec.org/p/nbr/nberwo/35875.html"},{"abstract":"Large language models (LLMs) increasingly provide economic and financial advice. We develop a microeconomic framework for understanding this role. We prove that an LLM acts like a voting rule: each input text is an election, possible continuations are candidates, and output probabilities are vote shares derived from the training corpus. Such rules can generate Condorcet cycles, implying intransitive pairwise recommendations and potential money-pump exploitation. Using ChatGPT-4o, we identify millions of cycles in pairwise investment choices among S&P 100 firms. Our theorems establish the voting interpretation on the training data and support its use off-sample. We also show that correcting cycles ex post is generally infeasible. Finally, temperature changes the voting rule: at T = 1, outputs are sampled in proportion to vote shares; lower temperatures favor the plurality winner, whereas higher temperatures flatten probabilities toward uniformity.","also_at":[],"analysis":null,"authors":["Raša Karapandža","Yaw Nyarko"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"06f0378f86af7159","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":5,"screen_reason":"Explores LLMs as voting mechanisms affecting investment advice, a nascent market concern.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Large Language Models as Voting Mechanisms","url":"https://ideas.repec.org/p/nbr/nberwo/35839.html"},{"abstract":"Gains from trade are typically calculated using a constant trade elasticity estimated from substitution across foreign countries. For general homothetic preferences, we show how to calculate these gains from the initial domestic expenditure share and the home-foreign elasticity function along a price path to autarky. While this function generally depends on the specific price path, under weak separability it does not. We provide conditions for its nonparametric identification and estimate sector-level elasticity functions using tariff changes implied by trade agreements. Across WIOD and OECD ICIO data, estimated home-foreign elasticities generally rise with domestic expenditure shares. Using estimated elasticity functions in a multi-sector model with intermediate inputs, the median gain across the WIOD countries is 19.37 log points, compared with 24.43 when each country-sector elasticity is held fixed at its initial value.","also_at":[],"analysis":null,"authors":["Jonathan Vogel"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"04c8c7c61b1f8ca2","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":6,"screen_reason":"Estimates sectoral trade elasticities and gains from trade, useful for trade policy analysis.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Home-Foreign Elasticity Functions and the Gains from Trade","url":"https://ideas.repec.org/p/nbr/nberwo/35906.html"},{"abstract":"We study how the composition of a fund's investor base shapes its response to a liquidity shock affecting its liabilities rather than its portfolio. In May 2018, capital losses on Italian sovereign bonds prompted large-scale redemptions by Italian insurers from European bond funds holding almost no Italian assets. Funds with more long-term investors replaced them with other euro-area insurers and pension funds, keeping flows and portfolios stable. Funds dominated by short-term investors suffered outflows and increased their exposure to high-yield bonds to attract performance-sensitive investors, reversing the usual precautionary de-risking strategy. Investor composition may therefore shape the effects of liability-side shocks, concentrating run-prone investors and risky assets in the same funds.","also_at":[],"analysis":null,"authors":["Valerio Della Corte","Raffaele Gallo","Taneli Makinen","Francesco Palazzo"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"03ea01042ee57dbf","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":8,"screen_reason":"Links fund investor composition to liquidity-driven runs and risk-taking, directly relevant to bond market stability.","screening_tag":"DM","selected_in":[],"source":"banca-ditalia","source_name":"Banca d'Italia Temi di discussione","tag":"DM","tag_inferred":false,"title":"Beyond the surface: investor base, risk-taking and fragility in open-end funds","url":"https://ideas.repec.org/p/bdi/wptemi/td_1546_26.html"},{"abstract":"Occupational licensing is a widespread quality regulation that potentially increases the quality of labor but reduces its quantity. We provide a theoretical framework to empirically quantify this trade-off in public hospitals, where both clinical quality and physician shortages are critical concerns. Using quasi-exogenous variation driven by a recent and unprecedented migration of physicians to Chile, together with growth in domestic medical schools, we show that more physicians improve patient outcomes, while lower-quality physicians—as measured by licensing exam performance—worsen them. Incorporating these findings into our theoretical framework, we evaluate the implications of locally changing the stringency of the licensing policy.","also_at":[],"analysis":null,"authors":["Juan Pablo Atal","Tomás Larroucau","Pablo Muñoz","Cristóbal Otero"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"031c06fbea560b39","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":2,"screen_reason":"Focuses on physician licensing in Chile, limited macro-financial market implications.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Physicians' Occupational Licensing and the Quantity-Quality Trade-off","url":"https://ideas.repec.org/p/nbr/nberwo/35855.html"},{"abstract":"This paper investigates the relationship between price dispersion and inflation, shedding light on one major source of the cost of high inflation. By analyzing novel product-level web-scraped data from over 60,000 restaurants and supermarkets across 18 countries facing high and low inflation periods, I uncover new evidence of a significant positive correlation between inflation and price dispersion. My findings reveal that average annualized inflation, ranging between 0 and 20 percentage points across countries within a condensed time frame, is significantly associated with higher price dispersion in both the restaurant and the supermarket sectors. The estimates indicate that the marginal effect of suboptimal inflation on product-level distortions is positive, economically significant in all inflation environments and heterogeneous across sectors. Cross-sectionally, I find that as annualized inflation rises from 0% to 10% inefficient price dispersion is about 46% higher for supermarkets and 73% higher for restaurants. Lastly, the relationship between inflation and price dispersion does not flatten much at higher inflation, so that the marginal cost of additional inflation does not vanish as inflation rises – a pattern standard menu-cost models do not generate. This indicates a sustained impact of inflation on price dispersion, implying that accommodating higher inflation levels incurs substantial welfare costs.","also_at":[],"analysis":{"correction":{"checked":"2026-11-02","human_reviewed":true,"made_by":"Mustafa Harun Sendur","original_tag":"Transversal","source":"Santiago Alvarez-Blaser, Banco de España Working Paper 2638, full text, section 2 (Data and summary statistics). The abstract names no country; the country list was checked in the full paper by Mustafa Harun Sendur and confirmed by Claude (AI assistant) from the PDF text."},"current_prompt":true,"evidence":"The countries included in the analysis are, in the order shown in the table: Armenia, Côte d’Ivoire, Spain, Georgia, Ghana, Croatia, Italy, Kenya, Kyrgyzstan, Kazakhstan, Morocco, Poland, Portugal, Romania, Slovenia, Tunisia, Ukraine and Uganda.","flags":[],"in_issue":true,"rationale":"The sample spans 18 countries of both groups, advanced economies such as Spain, Italy and Portugal alongside emerging and developing ones such as Kenya, Ukraine and Uganda, so no single group dominates.","relevance_note":"Understanding how inflation is associated with price dispersion helps policymakers gauge hidden costs of inflation and informs businesses about pricing stability across sectors.","summary":"The paper uses product-level web-scraped data from over 60,000 restaurants and supermarkets in 18 countries to study how inflation relates to price dispersion. It finds a significant positive correlation in both sectors that does not flatten much at higher inflation.","takeaways":["Across countries, annualised inflation of 10% rather than 0% is associated with approximately 46% higher price dispersion in supermarkets and 73% higher dispersion in restaurants.","The association is positive in all inflation environments and differs between supermarkets and restaurants.","It does not flatten much at higher inflation, which standard menu-cost models do not generate."],"wording_correction":{"checked":"2026-11-01","human_reviewed":true,"made_by":"Claude (AI assistant)","reason":"The model wrote that a \"10% rise in annualized inflation raises price dispersion by about 46%\". The abstract reports a correlation, and compares inflation of 0% with 10% (a difference in levels), not a 10% rise.","source":"Abstract of the Banco de España working paper"}},"authors":["Santiago Alvarez-Blaser"],"date":"2026-10-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"029949c007a6a2c9","issue_date":null,"kind":"working_paper","publication_month":"2026-10","relevance":9,"screen_reason":"The paper provides empirical evidence on the link between inflation and price dispersion, offering insights into the costs of inflation across different environments.","screening_tag":"Transversal","selected_in":["2026-10"],"source":"bde","source_name":"Banco de España","tag":"Transversal","tag_inferred":false,"title":"Inflation and Price Dispersion: New Cross-Sectoral and International Evidence","url":"https://ideas.repec.org/p/bde/wpaper/2638e.html"},{"abstract":"Abstract Standard New Keynesian (NK) models feature an optimal inflation target well below 2%, limited welfare losses from business cycle fluctuations and long-term monetary neutrality. We develop an NK framework with endogenous productivity and downward nominal wage rigidity (DNWR) which challenges these results. The interaction between endogenous growth and DNWR generates asymmetric hysteresis effects on unemployment and R&D. As a consequence, the model features a nonvertical long-run Phillips curve and a trade-off between price distortions and output hysteresis that changes the welfare-maximizing inflation rate to above 2%. Deviations from the optimal target carry welfare costs multiple times those in traditional NK models. Taylor rules that respond to the unemployment rate address more effectively the asymmetric hysteresis in our model. Results are robust to the inclusion of the effective lower bound on interest rates.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"optimal inflation target well below 2%","flags":["tag differs from screening (DM); review"],"in_issue":false,"rationale":"The abstract discusses model mechanisms and optimal inflation without naming any specific economy or region.","relevance_note":"Policymakers and market participants should note that standard low-inflation targets may be suboptimal when wage rigidity and productivity feedback generate persistent output effects, affecting the trade-off between price stability and growth.","summary":"The paper extends a New Keynesian model by adding endogenous productivity and downward nominal wage rigidity, creating asymmetric hysteresis in unemployment and R&D. This yields a non-vertical long-run Phillips curve and raises the welfare-maximizing inflation rate above 2%, with larger welfare losses from deviating from that target.","takeaways":["Endogenous growth plus wage rigidity creates hysteresis that makes the long-run Phillips curve non-vertical.","The welfare-optimal inflation rate exceeds 2% under these dynamics.","Welfare losses from missing the optimal rate are multiple times larger than in standard NK models.","Taylor rules that react to unemployment better mitigate asymmetric hysteresis."],"wording_correction":null},"authors":["Mirko Abbritti","Agostino Consolo","Sebastian Weber"],"date":"2026-09-30","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/restud/rdag104","doi_registered":"2026-09-26","flags":[],"group":"journal","id":"8eb6c47dc16e6b5d","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":7,"screen_reason":"Presents a New Keynesian model with hysteresis affecting optimal inflation, relevant for policy design.","screening_tag":"DM","selected_in":[],"source":"restud","source_name":"Review of Economic Studies","tag":"Transversal","tag_inferred":false,"title":"Monetary Policy Invariance, Hysteresis, and Optimal Inflation","url":"https://doi.org/10.1093/restud/rdag104"},{"abstract":"Abstract We propose a tractable model in which risk, at both the micro and macro levels, is endogenous and driven by incentives. In the model, each firm chooses the mean and the variance of its productivity process, as well as how it covaries with the productivity of other firms. Aggregate risk arises when firms select productivity processes that are correlated with one another. The theory predicts that larger firms and those with lower markups are less volatile and less correlated with aggregate productivity. We find support for these predictions in the data. Through their impact on risk-taking decisions, distortions such as taxes and markups can make GDP more volatile in equilibrium. In a calibrated version of the model, removing distortions significantly reduces GDP volatility.","also_at":[],"analysis":null,"authors":["Alexandr Kopytov","Mathieu Taschereau-Dumouchel","Zebang Xu"],"date":"2026-09-30","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/qje/qjag048","doi_registered":"2026-09-30","flags":[],"group":"journal","id":"63ba1e82b25532e9","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":6,"screen_reason":"Links firm-level risk choices to aggregate GDP volatility, relevant for macro risk assessment.","screening_tag":"Transversal","selected_in":[],"source":"qje","source_name":"Quarterly Journal of Economics","tag":"Transversal","tag_inferred":false,"title":"The Origin of Risk","url":"https://doi.org/10.1093/qje/qjag048"},{"abstract":"We consider official and alternative data sources for measuring and projecting the role of U.S. manufacturing in the global semiconductor manufacturing industry. We find that the government sources we consider face significant limitations for tracking semiconductor fab investment in real time: they use industry and product categories that are too broad, and come with substantial publication lags. We then analyze project-level alternative data from Semiconductor Equipment and Materials International (SEMI), which provides quarterly tracking of individual fab projects with greater timeliness and specificity. Comparing SEMI data with official statistics through 2023, we find broad consistency in investment levels, validating SEMI as a credible supplement to official statistics. This work provides both a practical guide for tracking real-time trends in semiconductor manufacturing and a case study in synthesizing government and alternative data sources.","also_at":["https://ideas.repec.org/p/nbr/nberwo/35779.html"],"analysis":{"correction":null,"current_prompt":true,"evidence":"U.S. manufacturing in the global semiconductor manufacturing industry","flags":[],"in_issue":false,"rationale":"The abstract explicitly references U.S. manufacturing and U.S. investment data.","relevance_note":"Policymakers and market participants need timely insight into U.S. semiconductor manufacturing trends, and the validated alternative data source can improve monitoring of investment flows.","summary":"The paper evaluates official and alternative data for measuring U.S. semiconductor fab investment and shows that SEMI’s project-level data align with official statistics through 2023, making it a useful real-time supplement. It highlights limitations of government sources and validates SEMI as a credible tracking tool.","takeaways":["Official sources lag and use overly broad categories, limiting real-time tracking of fab investment","SEMI provides quarterly, project-level data with better timeliness and specificity","Comparison through 2023 shows broad consistency between SEMI and official investment levels","The study offers a practical guide for combining government and alternative data to monitor U.S. semiconductor capacity"],"wording_correction":null},"authors":["David M. Byrne","Robert Kurtzman","Heidi L. Williams"],"date":"2026-09-29","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"dca1857dc16b897f","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Tracks real-time U.S. fab investment, directly informing semiconductor supply-chain and policy discussions.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":false,"title":"Measuring and Projecting U.S. Investment in Semiconductor Manufacturing Capacity","url":"https://www.federalreserve.gov/econres/feds/measuring-and-projecting-us-investment-in-semiconductor-manufacturing-capacity.htm"},{"abstract":"Long-term care is costly. About 45 percent of 65-year-old Americans will require formal long-term care assistance during their lifetime and one in twelve will incur out-of-pocket expenses of $200,000 or more. Surprisingly, only 10 percent of retirees have private long-term care insurance. We use a quantitative structural model to show that an obstacle to increasing coverage is disagreement across the income distribution: scaling back public long-term care insurance expands the private market and benefits the affluent but imposes large welfare losses on the poor, while universal public insurance does the opposite. We then show that making the main public insurer, Medicaid, the primary rather than the secondary payer of long-term care costs, while retaining its means tests, raises welfare for nearly all Americans. Private insurers respond by offering smaller, more profitable policies, and total coverage against long-term care risk rises with only a modest increase in public expenditures.","also_at":[],"analysis":null,"authors":["R. Anton Braun","Karen A. Kopecky"],"date":"2026-09-28","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"ddac3290e6329a34","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"The paper analyzes the fiscal and welfare implications of long-term care insurance reform in the US, which is a significant long-term fiscal policy issue.","screening_tag":"DM","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"DM","tag_inferred":false,"title":"How to Reform US Long-Term Care","url":"https://ideas.repec.org/p/fip/fedcwq/103852.html"},{"abstract":"Central bank press conferences are not merely information releases — they are structured narratives. We study whether the shape of sentiment within a statement, not just its average tone, carries policy-relevant signals. Constructing sentiment arcs for ECB press conferences along three dimensions — monetary policy stance, economic outlook, and uncertainty — we assess their predictive content for policy rate changes and inflation expectations. Our findings show that arc shape robustly predicts rate decisions beyond lexicon-based benchmarks: it is not merely whether a statement sounds hawkish or economically optimistic on average, but how these sentiments are sequenced, emphasized, and sustained across the statement, that carries the policy signal. Arc features also shape how professional forecasters update inflation expectations, pointing to a receiver-side effect distinct from the direct policy signal. Our results are robust to a range of additional exercises, including different sample splits as well as controlling for the content of the statement. They also carry over to a short sample of Fed press conferences. These findings suggest that the sequencing and emphasis of policy language across a statement is a first-order feature of the policy signal, not a second-order refinement.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"ECB press conferences","flags":[],"in_issue":false,"rationale":"The abstract explicitly studies ECB press conferences, which are part of the euro area, an advanced economy.","relevance_note":"Understanding the predictive power of sentiment sequencing helps market participants and policymakers interpret central-bank communications more accurately, potentially improving forecasts of rate moves and inflation expectations.","summary":"The paper builds sentiment arcs for ECB press conferences across policy stance, outlook, and uncertainty, showing that the shape of sentiment predicts policy rate changes and influences professional inflation forecasts beyond average tone measures.","takeaways":["Sentiment arc shape predicts ECB rate decisions beyond lexicon-based tone benchmarks.","Sequencing and emphasis of sentiments affect how forecasters update inflation expectations.","Results hold when controlling for statement content and across different sample splits.","Findings also apply to a short sample of Fed press conferences."],"wording_correction":null},"authors":["Martin Feldkircher","Márton Kardos","Kristoffer Laigaard Nielbo"],"date":"2026-09-28","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"3837c2e24f0879ef","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Shows how ECB press-conference sentiment arcs predict rate moves and inflation expectations.","screening_tag":"DM","selected_in":[],"source":"oenb","source_name":"Oesterreichische Nationalbank","tag":"DM","tag_inferred":false,"title":"From Tone to Trajectory: Continuous Sentiment and the Shape of Monetary Policy Communication","url":"https://ideas.repec.org/p/onb/oenbwp/281.html"},{"abstract":"We document two novel stylized facts about uninsured deposits and bank failures: (i) firms hold more uninsured deposits than households, and (ii) uninsured depositors do not suffer losses in 94 percent of bank failures. We construct a quantitative general equilibrium model designed around these facts. We characterize the marginal benefits of increased insurance for firms' and households' deposits separately, finding higher benefits for household insurance. Quantitatively, the welfare gains from increasing insurance arise primarily from the reduction in bank runs driven by the higher limit on households' deposits. Reducing bailouts increases bank failures due to runs and generates severe macroeconomic effects.","also_at":[],"analysis":null,"authors":["N. Aaron Pancost","Roberto Robatto"],"date":"2026-09-28","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"2663ef243cd528ad","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Quantifies welfare and macro effects of deposit insurance and bailouts, directly tied to banking stability.","screening_tag":"DM","selected_in":[],"source":"fed-atlanta","source_name":"Federal Reserve Bank of Atlanta","tag":"DM","tag_inferred":true,"title":"Bailing Out (Firms') Uninsured Deposits: A Quantitative Analysis","url":"https://ideas.repec.org/p/fip/fedawp/103989.html"},{"abstract":"Monetary policy has been the primary tool of macroeconomic management since the 1970s. As a result, the effects of monetary shocks became an important area of policy research. In the 1980s, event studies showed that U.S. monetary-aggregate announcements strongly affected asset prices, although no single model readily explained the responses. Greater central-bank transparency in the 1980s and 1990s increased interest in measuring monetary policy's effects on financial and macroeconomic variables. In the 1990s, researchers predominantly used vector autoregressions (VARs) to estimate the effects of monetary shocks. This work raised questions about why monetary shocks explained little output variation and sometimes implied theoretically implausible price responses. Increasing Fed transparency allowed researchers to make substantial progress in measuring surprises from high-frequency interest-rate changes. The 2007-2009 Global Financial Crisis further intensified interest in monetary shocks. Subsequent research has examined dimensionality and time variation, information content, predictability, explanatory power, policy horizons, and information sets. Researchers have proposed many measures, but their relationships are often unclear. This paper reviews the literature on monetary shocks, their motivations, their construction, and the inference drawn from them.","also_at":[],"analysis":null,"authors":["Christopher J. Neely"],"date":"2026-09-27","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"f3088751647d2c59","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":5,"screen_reason":"Literature review of monetary-policy shock research, useful background but limited direct market insight.","screening_tag":"DM","selected_in":[],"source":"fed-st-louis","source_name":"Federal Reserve Bank of St. Louis","tag":"DM","tag_inferred":false,"title":"An Analysis of the Literature on Monetary Policy Shocks","url":"https://ideas.repec.org/p/fip/fedlwp/103833.html"},{"abstract":"Abstract This article provides evidence on how wage inequality among workers affects the labor movement, drawing on three complementary research designs: a vignette experiment with union organizers, a natural policy experiment that increased wage inequality among Wisconsin school teachers, and an information intervention during the 2023 Writers Guild of America strike. Across all studies, we find that inequality undermines union strength through multiple channels. First, among workers, those with high individual bargaining power are more likely to withdraw support in unequal environments, preferring individual over collective bargaining. Second, among union organizers, those facing hypothetical choices strategically respond to inequality in ways that may preserve membership but limit redistribution, such as shifting their campaign away from wages and choosing smaller, more homogeneous bargaining units.","also_at":[],"analysis":null,"authors":["Barbara Biasi","Zoë Natalia Cullen","Julia Gilman","Nina Roussille"],"date":"2026-09-25","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/qje/qjag046","doi_registered":"2026-09-25","flags":[],"group":"journal","id":"d57d5ec654ca48ca","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":3,"screen_reason":"Study of wage inequality’s impact on unions offers limited direct macro or market implications.","screening_tag":"DM","selected_in":[],"source":"qje","source_name":"Quarterly Journal of Economics","tag":"DM","tag_inferred":true,"title":"How Does Wage Inequality Affect the Labor Movement?","url":"https://doi.org/10.1093/qje/qjag046"},{"abstract":"This paper examines the evolving relationship between corporate bond and stock returns in the euro area from 2007 to 2025. While theory predicts negative (or at least lower) correlations during periods of market stress and negative demand shocks, empirical evidence shows substantial instability over time. We construct equity and corporate bond indices using a strictly matched issuer universe, such that the constituent firms are identical across the two indices. We then analyse their correlation dynamics across major euro area markets using Dynamic Conditional Correlation models. Results indicate that correlations, historically negative, have since 2009 gradually trended toward neutrality, but can shift in either direction rapidly. We show that the discount-rate channel emerges as the dominant driver of co-movement in both low- and high-inflation environments. By contrast, financial stress reduces correlations – consistent with flight-to-quality dynamics –only in low-inflation regimes but not in high inflation regimes. This indicates that investors cannot rely on policy-induced compression in discount rates to generate cross-asset arbitrage opportunities in favour of bonds when inflation is high.","also_at":[],"analysis":null,"authors":["Linas Jurkšas","Julien Idier"],"date":"2026-09-25","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"b3a34b42343550f4","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Documents evolving stock-bond correlation in euro area, important for asset allocation and policy impact.","screening_tag":"DM","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"DM","tag_inferred":false,"title":"When Diversification Fades: a Firm Level Perspective of Stock and Corporate Bond Correlations","url":"https://ideas.repec.org/p/bfr/banfra/1065.html"},{"abstract":"Adoption of the current expected credit losses (CECL) methodology for loan loss provisioning significantly altered how banks recognize loan losses in their capital calculations. Because capital is a more costly funding source for banks, the accounting change affects banks' cost of funding loans. Using variation in the timing and effect of CECL implementation across firms and loan types, this paper finds that loan loss allowances have a similar causal effect on credit supply as capital requirements. Within our sample, the effect of CECL adoption on loan allowances reduced loan growth by approximately 77 basis points annually in the years following adoption. We find no significant effect of CECL on capital distributions.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"current expected credit losses (CECL)","flags":[],"in_issue":false,"rationale":"The abstract discusses CECL, a U.S. accounting standard, indicating a focus on an advanced economy.","relevance_note":"Policymakers and market participants should note that the CECL rule can tighten credit supply without affecting dividend or share-buyback policies, influencing loan market dynamics.","summary":"The paper examines how adopting the current expected credit losses (CECL) accounting rule changes banks' loan loss allowances and finds that this reduces loan growth by about 77 basis points per year, with no impact on capital distributions.","takeaways":["CECL adoption raises loan loss allowances, acting like higher capital requirements.","Loan growth falls roughly 77 basis points annually after CECL implementation.","No significant change in banks' capital payouts is observed."],"wording_correction":null},"authors":["Ben Ranish","Cindy M. Vojtech"],"date":"2026-09-25","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"aed0573939255215","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Shows CECL’s sizable impact on loan growth, informing banking credit supply and funding costs.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":true,"title":"How Did CECL Affect Bank Lending?","url":"https://www.federalreserve.gov/econres/feds/how-did-cecl-affect-bank-lending.htm"},{"abstract":"This paper develops algorithms for estimating a principal components (PC) model for monthly macroeconomic data mixed with either weekly or daily data. The algorithms’ utilization of high frequency data allows it to account for differences in the temporal aggregation patterns among the monthly series that are simple aggregates or averages and those that have an alternative aggregation pattern such as data from the monthly employment report where the aggregation pattern is often series- and month-specific and depends on the timing of the twelfth day of the month. The algorithms are applied to three respective models with mixed frequency price related, labor market related, or economic activity related data, the latter of which is similar to the factor model used by the Atlanta Fed's GDPNow nowcasting model to forecast GDP source data. When aggregated appropriately, the mixed frequency activity model PC closely resembles both the Chicago Fed National Activity Index and GDPNow's dynamic factor. Moreover, the PCs from all three models can be well approximated using the subset of data that would remain available during a widespread government shutdown.","also_at":[],"analysis":null,"authors":["Patrick C. Higgins"],"date":"2026-09-25","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"6e156c22328a4c1f","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Improves mixed-frequency nowcasting, directly relevant to GDP forecasts and market expectations.","screening_tag":"DM","selected_in":[],"source":"fed-atlanta","source_name":"Federal Reserve Bank of Atlanta","tag":"DM","tag_inferred":false,"title":"Nowcasting with Mixed Frequency Principal Components When Not All Months Are the Same","url":"https://ideas.repec.org/p/fip/fedawp/103988.html"},{"abstract":"Every inflation index is an aggregation rule. This paper asks when the aggregation that measures the cost of living is also the one that should guide monetary stabilization. A Consumer Price Index (CPI) measures purchasing power; a stabilization index should weight sectoral prices by what they reveal about states in which the policy rate has high marginal welfare value. In standard New-Keynesian models, the two indices coincide. We show that they diverge when the sectors generating price movements differ from the sectors through which interest rates move demand, income, and marginal costs. New euro-area data reveal such a mismatch. Discretionary sectors are the cyclical quantity margin and employ many hand-to-mouth workers, while necessity sectors account for much of inflation variation. After a contractionary monetary policy shock, discretionary consumption and employment adjust the most, but necessity prices respond more. We lay out a two-sector New-Keynesian model with non-homothetic demand and sectoral labour market heterogeneity that is consistent with these findings. Even with symmetric shocks and homogeneous nominal rigidities, optimal simple rules place nearly all weight on discretionary inflation, because reacting to necessity inflation uses the discretionary sector as the adjustment margin for price movements in sectors with little quantity traction. With stickier discretionary prices, as observed in the euro area, a discretionary inflation rule improves welfare further and closes about two thirds of the welfare gap between a CPI inflation rule and Ramsey policy. Under the empirical distribution of euro-area shocks, the gains come from lower sectoral inflation volatility rather than lower aggregate real volatility. Expenditure weights need not be stabilization weights.","also_at":[],"analysis":null,"authors":["Michele Andreolli","Natalie Rickard","Paolo Surico","Chiara Vergeat"],"date":"2026-09-25","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"41ac837d595ce6b2","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Explores CPI composition versus stabilization index, informing euro-area monetary policy decisions.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":false,"title":"Inflation composition and monetary stabilization","url":"https://ideas.repec.org/p/boe/boeewp/023642.html"},{"abstract":"Macroeconomic policy increasingly requires assessments of risk rather than point forecasts alone. This paper develops a framework to compute impulse responses for scenario probabilities and the full predictive distribution of macroeconomic outcomes. The approach combines a regime-dependent mixture VAR with endogenous state probabilities and heteroskedastic shock identification, complemented by sparse sign and narrative restrictions. Applied to the euro area and U.S., the framework addresses a central policy question following the outbreak of the 2026 Iran war: do geopolitical shocks imply a return to the risk profile observed after Russia’s invasion of Ukraine, or is this time different? Results show that shocks differ not only in their effects on expected outcomes, but also in how they reshape scenario probabilities, tail risks, and transitions into high-volatility states.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"Applied to the euro area and U.S.","flags":["tag differs from screening (Transversal); review"],"in_issue":false,"rationale":"The abstract explicitly mentions the euro area and the U.S., both advanced economies.","relevance_note":"Policy makers and market participants can better gauge how geopolitical events change risk profiles and tail exposures in major advanced economies.","summary":"The paper builds a regime-dependent mixture VAR framework that generates impulse responses for scenario probabilities and the full predictive distribution of macro outcomes. Applying it to the euro area and the United States, it finds that geopolitical shocks alter expected results, scenario probabilities, tail risks, and moves into high-volatility states differently.","takeaways":["Framework produces impulse responses for full predictive distribution, not just point forecasts","Combines regime-dependent mixture VAR with endogenous state probabilities and heteroskedastic shock identification","Applied to euro area and U.S., shows shocks reshape scenario probabilities and tail risks","Geopolitical shocks affect transitions into high-volatility states differently"],"wording_correction":null},"authors":[],"date":"2026-09-25","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"37d5070a58aa9dd2","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Provides a framework to assess tail-risk impacts of geopolitical shocks on euro area and US economies.","screening_tag":"Transversal","selected_in":[],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Multivariate uncertainty and distributional transmission","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3290~30ee904f1e.en.pdf"},{"abstract":"AI mentions in US job advertisements have increased substantially since the beginning of 2024. The increase is concentrated in occupations more intensely exposed to the capabilities of large language models: one additional standard deviation of exposure is associated with a 3.1 percentage point increase in the rate at which job ads mention AI. Alongside this increase in AI mentions, more exposed occupations have seen job postings stabilize after a period of relative decline, posted wages rise, and hires and separations rise, all relative to less exposed occupations. Realized wages for new hires have risen consistent with posted wages, while wages of continuously employed workers have declined, possibly because exposed occupations have seen labor markets become less tight.","also_at":[],"analysis":null,"authors":["Kevin Rinz"],"date":"2026-09-24","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"4747bc1e02eebf6f","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Provides timely evidence on how AI adoption is impacting labor market dynamics, wages, and job demand in the US.","screening_tag":"DM","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"DM","tag_inferred":false,"title":"The Recent Evolution of AI-Related Labor Demand","url":"https://ideas.repec.org/p/fip/fedcwq/103850.html"},{"abstract":"Using the Distributional Financial Accounts of the United States, we study the effects of monetary policy on the wealth distribution. The direction and persistence of these effects depend on the policy instrument. Interest rate cuts initially reduce wealth inequality but increase it in the medium-run. Asset purchases, instead, increase wealth inequality but only temporarily. Housing is the main channel through which monetary policy affects wealth at the bottom while corporate equities explain wealth growth at the top. Using household-level data from the Panel Study of Income Dynamics, we document a wealth reversal at the bottom of the distribution: lower interest rates raise housing wealth in the short run but lead to higher mortgage debt and lower net wealth over time, contributing to the medium-term rise in inequality.","also_at":[],"analysis":null,"authors":["Alessandro Franconi","Giacomo Rella"],"date":"2026-09-24","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"208f159dbb610499","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Links US monetary actions to wealth inequality via housing and equities, affecting asset-price dynamics.","screening_tag":"DM","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"DM","tag_inferred":false,"title":"Monetary Policy and the Wealth Distribution","url":"https://ideas.repec.org/p/bfr/banfra/1064.html"},{"abstract":"This paper studies how human capital shapes the economic geography of development. We propose a model in which human capital acquisition costs vary across space, and regions with higher human capital invest more in human-capital-augmenting technology. Locations are interconnected through costly migration and trade. Using data on local income and schooling, we quantify the model at a 1° x 1° resolution globally. Over two centuries, the model mostly predicts persistence in the spatial distribution of development. Proportionally lowering education costs in sub-Saharan Africa raises local outcomes but lowers global welfare, while the same policy in Latin America improves global welfare. An alternative policy that equalizes educational costs across sub-Saharan Africa generates worse outcomes, as population shifts within the region toward less productive areas. These results are driven by the estimated negative correlation between education costs and local fundamentals, as well as spatial inefficiencies due to externalities.","also_at":[],"analysis":null,"authors":["Klaus Desmet","Dávid Krisztián Nagy","Esteban Rossi-Hansberg"],"date":"2026-09-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"d0ae2c94abe962d6","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":4,"screen_reason":"A long-term development model that provides insights into global economic geography but lacks immediate market or policy application.","screening_tag":"Transversal","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"Transversal","tag_inferred":false,"title":"Human Capital Accumulation Across Space","url":"https://ideas.repec.org/p/fip/feddwp/103849.html"},{"abstract":"We compile data from 2.4 million economics and personal finance module assignments completed by 513,000 K-12 students on an educational online platform. We exploit variation in the order in which these students complete the modules–economics or personal finance first– to estimate directional spillovers. The spillover runs one way. Controlling for school demographics, students who take economics first score 3.42 points higher on personal finance post-tests; taking personal finance first raises economics post-tests by 0.15 points on the same specification. A placebo using exposure that occurs after the outcome puts the return at 0.8 to 1.4 points per pre-treatment module. The advantage does not shrink as the gap between subjects grows, and it is largest in raw points for lower-performing students, 5.1 compared with 1.6, though mostly because higher-performing students sit at the test ceiling. Economics appears to supply foundational concepts that personal finance does not. When both subjects are taught, the order matters: economics first is the better order, and one or two economics modules capture most of the available gain.","also_at":[],"analysis":null,"authors":["Manu García","Diego Mendez-Carbajo"],"date":"2026-09-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"5c492c0cbdae52d5","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":1,"screen_reason":"This is an educational research paper on K-12 curriculum sequencing with no direct implications for macroeconomics or financial markets.","screening_tag":"Transversal","selected_in":[],"source":"fed-st-louis","source_name":"Federal Reserve Bank of St. Louis","tag":"Transversal","tag_inferred":false,"title":"On the Complementarity of K-12 Personal Finance and Economic Education: Evidence from Online Modules","url":"https://ideas.repec.org/p/fip/fedlwp/103812.html"},{"abstract":"I study the role of firms' balance sheet liquidity in the transmission of monetary policy to investment. I develop a heterogeneous firm macroeconomic model with financial constraints, debt issuance costs, and differential returns on firms' cash and borrowing. The model matches key novel moments from U.S. firm-level data on liquid asset holdings, debt issuance activity, and investment responses to identified monetary shocks. Counterfactual analysis shows that the rise in U.S. firms' liquid asset holdings over recent decades has significantly increased the relevance of balance sheet liquidity and the behavior of liquid asset returns in monetary transmission.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"U.S. firms' liquid asset holdings","flags":[],"in_issue":true,"rationale":"The abstract explicitly references U.S. firms and U.S. data.","relevance_note":"Understanding how firm liquidity influences the policy-investment link helps policymakers gauge the effectiveness of rate changes on real activity.","summary":"The paper builds a heterogeneous-firm model of monetary policy transmission to investment, with financial constraints, debt issuance costs and different returns on cash and borrowing, and matches key moments of U.S. firm-level data. A counterfactual analysis shows that the rise in U.S. firms' liquid asset holdings over recent decades has significantly increased the relevance of balance sheet liquidity in monetary transmission.","takeaways":["Firms' balance sheet liquidity matters for how monetary policy transmits to investment.","The model includes debt issuance costs and different returns on cash and on borrowing.","The rise in U.S. firms' liquid asset holdings has increased the relevance of balance sheet liquidity in monetary transmission."],"wording_correction":{"checked":"2026-11-03","human_reviewed":false,"made_by":"Claude (AI assistant)","reason":"The model said liquidity holdings \"amplify\" transmission, but the abstract says only that the rise in holdings increased the relevance of balance sheet liquidity; it also called the model \"calibrated\" where the abstract says it matches key moments of the data.","source":"Abstract of the Journal of Political Economy article"}},"authors":["Priit Jeenas"],"date":"2026-09-22","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1086/744130","doi_registered":"2026-09-22","flags":[],"group":"journal","id":"b4885008226e83a2","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":8,"screen_reason":"Analyzes firm liquidity in monetary transmission, informing investment and credit cycle expectations.","screening_tag":"DM","selected_in":["2026-09"],"source":"jpe","source_name":"Journal of Political Economy","tag":"DM","tag_inferred":false,"title":"Firm Balance Sheet Liquidity, Monetary Policy Shocks, and Investment Dynamics","url":"https://doi.org/10.1086/744130"},{"abstract":"Abstract We compare and combine two distinct approaches to estimating market power in the U.S. brewing industry—one based on production data, the other on demand. Both methods produce similar estimates of average markups and reveal a recent upward trend. We then combine the two approaches in two ways. First, we replace conventional instruments in demand estimation with a moment involving a production-based markup estimate, yielding similar results. We then evaluate the common (but controversial) assumption that retail markets operate competitively, finding that demand-based markups recovered with the assumption of competitive retail markets align with production-based estimates, as long as downstream costs are accounted for.","also_at":[],"analysis":null,"authors":["Jan De Loecker","Paul T Scott"],"date":"2026-09-22","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/restud/rdag109","doi_registered":"2026-09-21","flags":[],"group":"journal","id":"96cde49382b7ea96","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":3,"screen_reason":"Estimates markups in US brewing, a narrow industry insight with limited macro or market implications.","screening_tag":"DM","selected_in":[],"source":"restud","source_name":"Review of Economic Studies","tag":"DM","tag_inferred":false,"title":"Markup Estimation Using Production and Demand Data: An Application to the U.S. Brewing Industry","url":"https://doi.org/10.1093/restud/rdag109"},{"abstract":"Teams of inventors now produce over 80 percent of U.S. patents, up from just 45 percent in 1976. Over the same period, inventor employment has become increasingly concentrated in large firms, rising six times more than overall employment concentration. To explain these trends, we develop a new model of endogenous team formation within firms and embed it in a general equilibrium model of the inventor labor market. Teams increase firms’ returns to scale by increasing the likelihood of productive matches between inventors. The value of these matches rises over time, possibly driven by increasing knowledge specialization. This causes large firms to expand and small firms to shrink in equilibrium, accounting for the observed increase in inventor employment concentration. Because firms do not internalize knowledge spillovers, there is misallocation of inventors across firms. The rise of team production amplifies this misallocation by a factor of six by reallocating inventors away from small firms that generate disproportionately large knowledge spillovers.","also_at":[],"analysis":null,"authors":["Seula Kim","Jane Olmstead-Rumsey","Honghao Wang"],"date":"2026-09-22","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"3a9724af82277ac6","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":5,"screen_reason":"Explores firm dynamics and inventor labor markets, offering a structural view on corporate R&D and firm concentration trends.","screening_tag":"DM","selected_in":[],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"DM","tag_inferred":false,"title":"Ideas and Firm Dynamics When It Takes Two to Tango","url":"https://ideas.repec.org/p/fip/fedpwp/103815.html"},{"abstract":"We study how international trade has affected U.S. inflation dynamics. We develop a multi-region New Keynesian model of an open monetary union in which regional Phillips curve slopes depend on exposure to imported goods. Guided by the model, we construct state-level measures of import penetration in final consumption and exploit cross-state variation to estimate regional Phillips curves over 1976-2017. Greater import exposure leads to significantly flatter state-level Phillips curves. We estimate that rising import exposure accounts for roughly 40 percent of the flattening of the U.S. Phillips curve over this period. Increased import exposure also shifted the U.S. Phillips curve downward, reducing inflation by about 0.17 percentage point annually between 1976 and 2008. A reversal of globalization to early-1990s levels would substantially alter monetary policy trade-offs, reducing the sacrifice ratio by almost one-half. Our findings show that international trade has played a quantitatively important role in shaping U.S. inflation dynamics.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"We study how international trade has affected U.S. inflation dynamics","flags":[],"in_issue":true,"rationale":"The abstract explicitly studies U.S. inflation dynamics and U.S. Phillips curve.","relevance_note":"Understanding how trade exposure alters inflation dynamics informs the trade-off faced by policymakers when setting interest rates.","summary":"The paper builds a multi-region New Keynesian model and uses state-level import penetration data to estimate U.S. regional Phillips curves over 1976-2017. It finds that greater import exposure flattens the Phillips curve, accounting for roughly 40 percent of the flattening, and estimates that it lowered inflation by about 0.17 percentage point annually between 1976 and 2008.","takeaways":["Greater import exposure leads to significantly flatter state-level Phillips curves.","Rising import exposure accounts for roughly 40 percent of the flattening of the U.S. Phillips curve over 1976-2017.","The paper estimates that increased import exposure reduced U.S. inflation by about 0.17 percentage point annually between 1976 and 2008."],"wording_correction":{"checked":"2026-11-03","human_reviewed":true,"made_by":"Claude (AI assistant), on Mustafa Harun Sendur's review","reason":"The model left out the period of the 0.17 percentage point estimate (1976 to 2008) and wrote \"40 %\" where the abstract says roughly 40 percent.","source":"Abstract of the Federal Reserve Bank of Dallas working paper"}},"authors":["Colin J. Hottman","Ricardo M. Reyes-Heroles"],"date":"2026-09-22","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"256af3ed7a0c0f71","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Quantifies trade’s role in U.S. inflation flattening, directly affecting monetary policy and market expectations.","screening_tag":"DM","selected_in":["2026-09"],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"DM","tag_inferred":false,"title":"Globalization, Inflation Dynamics and the Slope of the Phillips Curve","url":"https://ideas.repec.org/p/fip/feddwp/103848.html"},{"abstract":"This paper studies whether securitisation affects monetary policy transmission via banks. Using granular loan-level data from the euro area, we show that banks actively engaged in securitisation adjust credit supply more strongly in response to monetary policy shocks than a matched sample of non-securitising banks. This is because securitisation expands banks’ lending capacity, but by increasing reliance on investors whose required returns and risk appetite are more sensitive to monetary policy conditions. Following a monetary tightening, these investors demand higher compensation and reduce their exposure to securitised assets, leading securitising banks to contract lending more than other banks. Effects are stronger for loans more likely to be securitised — i.e., to safer borrowers with longer maturities — and are primarily driven by synthetic securitisations, which provide additional capital relief through Significant Risk Transfers. Firms exposed to securitising banks cannot fully substitute tighter loan supply through existing or new bank relationships.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"Using granular loan-level data from the euro area","flags":[],"in_issue":true,"rationale":"The abstract explicitly studies banks in the euro area, an advanced-economy region.","relevance_note":"Policymakers and market participants should note that securitisation can amplify the impact of rate changes on credit supply, affecting loan availability and risk pricing in the euro area banking sector.","summary":"The paper examines how bank securitisation influences the transmission of monetary policy in the euro area, finding that securitising banks adjust credit supply more strongly to policy shocks than non-securitising banks. The stronger response stems from expanded lending capacity and greater sensitivity of investors to policy conditions, especially for synthetic securitisations.","takeaways":["Securitising banks cut lending more after a monetary tightening than matched non-securitising banks.","The effect is larger for loans to safer borrowers with longer maturities.","Synthetic securitisations drive most of the stronger response via significant risk transfers.","Firms cannot fully offset tighter credit by switching to other banks."],"wording_correction":null},"authors":[],"date":"2026-09-22","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"ecb","id":"22f446c06b2c600c","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Links trade exposure to U.S. Phillips curve flattening, crucial for inflation outlook and policy trade-offs.","screening_tag":"DM","selected_in":["2026-09"],"source":"ecb","source_name":"European Central Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Monetary policy transmission by securitising banks","url":"https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3289~670b45de09.en.pdf"},{"abstract":"Abstract The structure of the Social Security program presents a trade-off between benefit duration and size; individuals who claim early receive lower monthly payments. Surprisingly, even wealthy Americans with high life expectancies frequently claim benefits at the earliest eligibility age, a behavior inconsistent with conventional life-cycle theory predictions. In fact, there is a striking similarity in claiming ages across groups with vastly different life expectancies, wealth levels, and incentives to delay. This paper resolves this puzzle by introducing policy details and subjective beliefs about longevity and program rules into a rich, forward-looking life-cycle model. When included in the model, subjective beliefs substantially narrow the claiming-age gaps across education (college vs. non-college) and marital-status (married vs. single) groups. Specifically, differences in program beliefs alone account for 48.6% of the education claiming age gap and 75.1% of the marital status gap. Counterfactual policy simulations demonstrate that failing to account for these claiming mechanisms dramatically overstates individual responses to an increase in the normal retirement age and understates the resulting fiscal savings.","also_at":[],"analysis":null,"authors":["Neha Bairoliya","Kathleen McKiernan"],"date":"2026-09-21","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/restud/rdag107","doi_registered":"2026-09-17","flags":[],"group":"journal","id":"9582aff39a33fa25","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":5,"screen_reason":"Analyzes US Social Security claiming behavior, relevant to fiscal policy but limited direct market impact.","screening_tag":"DM","selected_in":[],"source":"restud","source_name":"Review of Economic Studies","tag":"DM","tag_inferred":false,"title":"Revisiting Retirement and Social Security Claiming Decisions","url":"https://doi.org/10.1093/restud/rdag107"},{"abstract":"Abstract There is a large latent workforce in developing countries that consists of hundreds of millions of women who prefer to have paid work and yet are out of the labor force. Often, available job opportunities are incompatible with traditional gender roles that encourage women to stay at home. In a randomized experiment with 1,670 households, we partner with a jobs platform to offer short-term data work to women who are out of the labor force. We find three main results. First, flexible work-from-home jobs are highly effective at bringing women into paid work. Job flexibility more than triples take-up from 15% for an office job to 48% for a job that women can do from home while multitasking with childcare. Second, these jobs can act as a stepping stone to less flexible work. Trying paid work from home increases take-up of less flexible jobs two to three months later among women without previous work experience. “Gateway jobs” are especially important for women from more traditional households: their labor supply is more likely to be marginal to flexibility, and in turn, work experience shifts their attitudes to become less traditional. Third, from the labor demand side, remote work comes with trade-offs in worker performance. Working from the office increases accuracy by 3% and speed by 18%. However, these performance drawbacks of work-from-home arrangements may be outweighed by the increase in available workers.","also_at":[],"analysis":null,"authors":["Lisa Ho","Suhani Jalota","Anahita Karandikar"],"date":"2026-09-21","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1093/qje/qjag045","doi_registered":"2026-09-18","flags":[],"group":"journal","id":"87c1445d068b3a93","issue_date":"2026-10-12","kind":"journal","publication_month":"2026-09","relevance":3,"screen_reason":"Examines flexible home work for women in West Bengal, relevant to labor inclusion but peripheral to macro markets.","screening_tag":"EM","selected_in":[],"source":"qje","source_name":"Quarterly Journal of Economics","tag":"EM","tag_inferred":false,"title":"Bringing Work Home: Flexible Work Arrangements as Gateway Jobs for Women in West Bengal","url":"https://doi.org/10.1093/qje/qjag045"},{"abstract":"We introduce the Financial Vulnerability Index (FVI), a novel indicator of financial vulnerabilities in the U.S. Unlike financial condition indices, which measure current credit market conditions and spike during periods of financial turmoil, the FVI displays the gradual build-up of structural financial weaknesses and declines as such episodes materialize. We demonstrate that the FVI exhibits properties consistent with theoretical mechanisms of financial vulnerabilities. When the index is high, adverse shocks are substantially amplified, generating larger declines in consumption and investment. We provide new empirical evidence that monetary tightening is associated with gradual declines in the FVI, with this effect substantially delayed, taking a few years to fully materialize. Moreover, monetary policy transmission to prices depends on the state of financial vulnerabilities, with significantly stronger effects when vulnerabilities are low.","also_at":[],"analysis":null,"authors":["Michele Modugno","Benjamin Roscoe","Sarah Zoi"],"date":"2026-09-21","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"7e9f492184ac6f36","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Introduces a US financial vulnerability index that alters monetary transmission, crucial for risk-adjusted policy views.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":false,"title":"Beyond Financial Conditions: Measuring Structural Vulnerabilities in the U.S. Financial System","url":"https://www.federalreserve.gov/econres/feds/beyond-financial-conditions-measuring-structural-vulnerabilities-in-the-us-financial-system.htm"},{"abstract":"We study the macroeconomic and trade-policy implications of disruptions to U.S.-bound shipping routes. Standard models treat them as iceberg-cost shocks, conflating the shock with the response to it. Using satellite vessel-tracking data, we construct route-level measures of potential and effective capacity for all U.S.-bound container ships from 2016 to 2025. Utilization losses in recent disruptions ran 20 to 40 percentage points, and began months before port congestion became visible. We embed these measures in a general equilibrium model in which firms reallocate a common fleet without internalizing the congestion they create and price above marginal cost, while importers' sourcing responds to route profitability. The reallocation triggered by a disruption then has first-order welfare effects, and the route's Domar weight is not a sufficient statistic for its welfare cost. The 2021 West Coast crisis and the 2023–2024 Red Sea attacks cost 0.69% and 0.35% of output. Naval protection of Red Sea shipping generated benefits of 0.04–0.08% of output at a fiscal cost of 0.02%. Tariffs decongest the routes they tax, offsetting or even reversing their conventional welfare cost.","also_at":["https://ideas.repec.org/p/nbr/nberwo/35808.html"],"analysis":{"correction":null,"current_prompt":true,"evidence":"U.S.-bound shipping routes","flags":[],"in_issue":true,"rationale":"The abstract focuses on U.S.-bound shipping routes and U.S. output impacts, naming the United States.","relevance_note":"Policymakers and market participants should note that, in the paper's model, shipping disruptions carry sizeable output losses. The paper estimates the benefits and fiscal cost of naval protection of Red Sea shipping, and separately finds that tariffs can decongest the routes they tax, which can offset their usual welfare cost.","summary":"The paper builds route-level measures of capacity for U.S.-bound container ships and embeds them in a general-equilibrium model to assess welfare effects of shipping disruptions. It finds that recent utilization losses were 20-40 percentage points and that the 2021 West Coast crisis and 2023-2024 Red Sea attacks reduced output by 0.69% and 0.35% respectively.","takeaways":["Utilization losses during disruptions were 20-40 percentage points, appearing months before visible congestion.","The 2021 West Coast crisis cost 0.69% of output; the 2023-2024 Red Sea attacks cost 0.35% of output.","Naval protection of Red Sea shipping yielded 0.04-0.08% output benefits at a 0.02% fiscal cost.","Tariffs can decongest taxed routes, potentially offsetting their usual welfare loss."],"wording_correction":{"checked":"2026-11-03","human_reviewed":true,"made_by":"Claude (AI assistant), on Mustafa Harun Sendur's review","reason":"The model's \"Why it matters\" bundled two results into \"modest net gains from naval protection and tariff decongestion\". The naval-protection result is an estimate of benefits against a fiscal cost; the tariff result is that reduced congestion can offset the usual welfare cost in the model. The summary and takeaways are the model's, unchanged.","source":"Abstract of the Federal Reserve Bank of St. Louis working paper"}},"authors":["Xiwen Bai","Jesús Fernández-Villaverde","Yiliang Li","Ricardo Marto","Francesco Zanetti"],"date":"2026-09-21","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"2e4fd376fb544fce","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Quantifies welfare impact of US-bound shipping disruptions, directly relevant to trade policy and macro outlook.","screening_tag":"DM","selected_in":["2026-09"],"source":"fed-st-louis","source_name":"Federal Reserve Bank of St. Louis","tag":"DM","tag_inferred":false,"title":"Shipping to America","url":"https://ideas.repec.org/p/fip/fedlwp/103785.html"},{"abstract":"This paper examines how shipping costs pass through to US producer prices. We link confidential shipment-level import transactions from the Census Bureau's Longitudinal Firm Trade Transactions Database (LFTTD) to confidential firm-level producer prices from the US Bureau of Labor Statistics' Producer Price Index (PPI) microdata, constructing a monthly panel of more than 6,000 US manufacturing importers from 2005 to 2022. Using local projections and Bartik-style instruments based on route-level shipping-cost variation, we find that pass-through to producer prices is negligible in normal times but rises sharply during the COVID-19 pandemic, when shipping costs surged broadly across routes and source countries. We interpret this state dependence through a menu-cost model with imported intermediate inputs and endogenous substitution between imported and domestic inputs.","also_at":[],"analysis":null,"authors":["Simon Gilchrist","Bin Wei","Vivian Z. Yue","Egon Zakrajšek"],"date":"2026-09-21","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"225fb200fc0c3287","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Shows how shipping cost spikes affect US producer prices, informing inflation and supply-chain risk assessments.","screening_tag":"DM","selected_in":[],"source":"fed-atlanta","source_name":"Federal Reserve Bank of Atlanta","tag":"DM","tag_inferred":false,"title":"Shipping Cost Shocks and US Producer Prices: Normal versus Crisis Pass-through","url":"https://ideas.repec.org/p/fip/fedawp/103985.html"},{"abstract":"Relying on a micro-level dataset of US firms' inflation expectations, we document that firms in industries with larger Domar weights and more flexible prices have more accurate inflation forecasts. To explain these patterns, we develop a rational inattention model of price-setting firms within a production network. In equilibrium, firms' inflation forecast accuracy depends on their attention to marginal costs, the comovement between their marginal cost and aggregate inflation, and the change in the marginal cost. When calibrated to US input-output data, the model replicates the cross-sectoral relationship between forecast accuracy, Domar weights, and price flexibility. Quantitatively, we find that production networks endogenously increase nominal rigidity. This channel accounts for about 30 percent of the networks' attenuation of the inflation response to monetary shocks, deepening the standard flattening of the Phillips curve from input-output linkages.","also_at":[],"analysis":null,"authors":["Rafael Gonçalves","Ina Hajdini"],"date":"2026-09-21","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"14652b8238c8548e","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Shows production-network effects on inflation dynamics, important for understanding Phillips curve and policy impact.","screening_tag":"DM","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"DM","tag_inferred":false,"title":"Inflation Inattention on the Production Network: Firm-Level Evidence and Macro Implications","url":"https://ideas.repec.org/p/fip/fedcwq/103851.html"},{"abstract":"Stock and bond investors treat different aspects of firm information as value-relevant, generating distinct mappings of text to returns (“dictionaries”). Comparing stock and bond responses to earnings calls, bondholders emphasize operations and downside risk (relative to growth and innovation). While consistent with asset payoff differences, dictionary differences follow the investor cohort and not the payoff structure. Among bonds that are de facto equities but priced by bondholders—junior debt for which firm value is less than senior debt face value—bond investors continue to interpret information through a creditor’s lens. Information ignored by one dictionary but not the other generates price underreaction.","also_at":[],"analysis":null,"authors":["Jawad Addoum","Vitaly Meursault","Justin Murfin"],"date":"2026-09-21","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"0890932240fa26c0","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":5,"screen_reason":"Examines text-based investor dictionaries, relevant for asset pricing but indirect for macro policy.","screening_tag":"Transversal","selected_in":[],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"Transversal","tag_inferred":false,"title":"Debt Dictionaries","url":"https://ideas.repec.org/p/fip/fedpwp/103784.html"},{"abstract":"We construct a new high-frequency measure of risk appetite shifts around Federal Open Market Committee (FOMC) meetings, the common component of changes in risk-sensitive indicators. Fed policy actions and communication have substantial effects on risk appetite. Interest-rate surprises explain only about one-fifth of the variation in risk appetite, so most policy-induced changes in risk asset prices are orthogonal to the expected rate path. We therefore use both surprises as external instruments in a proxy SVAR with two separately identified shocks. Risk appetite shocks have large and persistent contractionary effects, lowering output and prices while raising unemployment. By contrast, the effects of risk-free rate shocks tend to be small and imprecisely estimated, and some have puzzling signs. Monetary transmission appears to operate primarily through risk appetite and risk asset prices. Estimates relying on interest-rate surprises alone miss most of these effects, for two reasons: the link from interest rates to risk appetite is state-dependent, and Fed communication moves it independently of the expected rate path.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"Federal Open Market Committee (FOMC) meetings","flags":[],"in_issue":false,"rationale":"The abstract references the Federal Open Market Committee and Fed policy actions, which are specific to the United States.","relevance_note":"Interest-rate surprises alone may miss an important part of how Fed policy affects financial markets and the economy.","summary":"The paper builds a high-frequency measure of risk-appetite shifts around Federal Open Market Committee meetings and uses it, with interest-rate surprises, to identify two separate shocks. It finds that risk-appetite shocks have large and persistent contractionary effects, lowering output and prices and raising unemployment, while the effects of risk-free rate shocks are small and imprecisely estimated.","takeaways":["Interest-rate surprises explain only about one-fifth of the variation in risk appetite.","Risk-appetite shocks lower output and prices and raise unemployment persistently.","Risk-free rate shocks have small, imprecisely estimated effects, and some have puzzling signs.","Monetary transmission appears to operate primarily through risk appetite and risk asset prices."],"wording_correction":{"checked":"2026-11-03","human_reviewed":true,"made_by":"Claude (AI assistant), on Mustafa Harun Sendur's review","reason":"The model said risk-appetite shocks had contractionary effects \"on unemployment\" (the abstract says they raise it) and dropped the abstract's hedge \"appears to\" from the last takeaway. Its \"Why it matters\" said conventional metrics \"miss most of the transmission channel\", but the one-fifth estimate is a share of variation in risk appetite, so it cannot quantify the share of total transmission that is missed.","source":"Abstract of the Federal Reserve Bank of San Francisco working paper"}},"authors":["Michael D. Bauer","Maik Schmeling","Andreas Schrimpf"],"date":"2026-09-18","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"e9cd0d0c25d7841e","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Links Fed actions to risk-appetite shocks, highlighting a key channel for monetary transmission and asset-price moves.","screening_tag":"DM","selected_in":[],"source":"fed-san-francisco","source_name":"Federal Reserve Bank of San Francisco","tag":"DM","tag_inferred":false,"title":"Risk Appetite and Monetary Transmission","url":"https://ideas.repec.org/p/fip/fedfwp/103796.html"},{"abstract":"Deforestation for cattle ranching in the Brazilian Amazon emits carbon, and reforestation absorbs carbon. The social productivities for these alternative activities vary across locations. We analyze a spatial/dynamic model of efficient land allocation to establish a benchmark for policies. We treat cattle prices as stochastic and location-specific productivities as uncertain when assessing the consequences of imposing alternative prices of carbon emissions. Modest carbon price increases would incentivize Brazil to choose policies that capture a significant amount of greenhouse gases in the next 30 years. Our analysis pinpoints tropical forest management as an important contributor to climate change mitigation.","also_at":[],"analysis":null,"authors":["Juliano J. Assunção","Lars Peter Hansen","Todd Munson","Jose Alexandre Scheinkman"],"date":"2026-09-18","date_kind":"published","date_precision":"day","date_source":"crossref published-online","doi":"10.1086/744117","doi_registered":"2026-09-18","flags":[],"group":"journal","id":"b49fa9e580a84527","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":4,"screen_reason":"Assesses carbon pricing and forest policy in Brazil, offering climate-policy insight with modest direct market impact.","screening_tag":"EM","selected_in":[],"source":"jpe","source_name":"Journal of Political Economy","tag":"EM","tag_inferred":false,"title":"Carbon Prices, Forest Conservation and Reforestation in the Brazilian Amazon","url":"https://doi.org/10.1086/744117"},{"abstract":"Using fine-grained data on 465,000 Florida home sales over twelve years and semiparametric machine learning methods, we examine how home prices respond to weather-related risk factors. After controlling for geography, home characteristics, and transaction features, we find that home prices are negatively related to property-level expected weather losses derived from catastrophe models, insurance premiums, and exposure to recent hurricanes, but with notably different magnitudes. Expected weather losses show the strongest association with prices and are consistent with markets rationally capitalizing anticipated future losses into current property valuations. Insurance premiums have a statistically significant but economically more modest negative effect on home prices, suggesting that housing market participants may view premium differences across properties as more transitory. Recent hurricane exposure has only a marginal effect on house prices, suggesting that hurricane risk is well-understood in Florida so that realized weather events convey little new information about future losses.","also_at":[],"analysis":null,"authors":["Erik Heitfield","Mallick Hossain","Katie Merritt"],"date":"2026-09-18","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"b3d8cb7cdbd70148","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Provides empirical evidence on how climate risk and insurance premiums are priced into real estate markets, relevant for property and insurance sector analysis.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":true,"title":"Premiums or Peril","url":"https://www.federalreserve.gov/econres/feds/premiums-or-peril.htm"},{"abstract":"CORRECT ORDER OF AUTHORS: Mustre-del-Río, Sánchez, Athreya. Relative to the persistent delinquency typically observed in consumer credit, mortgage forbearance during the COVID-19 pandemic was surprisingly short-lived. To understand why, we develop a rich structural model and estimate it on credit panel microdata. Next, using the model and survey data, we identify key roles for both selection into mortgages by relatively patient households and the failure of anticipated income losses to materialize. Even taking selection in account, had losses occurred, forbearance participation would have been persistent. Thus, the power of forbearance, a frequent macroeconomic policy, hinges on borrower selection, shock realizations, and revisions to expectations following those realizations.","also_at":["https://ideas.repec.org/p/fip/fedlwp/103742.html","https://ideas.repec.org/p/fip/fednsr/103868.html"],"analysis":null,"authors":["Kartik B. Athreya","José Mustre-del-Río","Juan M. Sánchez"],"date":"2026-09-18","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"5e1866cef9582f2d","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Analyzes mortgage forbearance dynamics, shedding light on credit policy effectiveness and consumer-credit cycles.","screening_tag":"DM","selected_in":[],"source":"fed-kansas-city","source_name":"Federal Reserve Bank of Kansas City","tag":"DM","tag_inferred":true,"title":"Fleeting Forbearance in a World of Persistent Financial Distress","url":"https://ideas.repec.org/p/fip/fedkrw/103780.html"},{"abstract":"Multiple-horizon forecast panels are increasingly used to infer perceived monetary policy rules, but inference depends on how coefficients are pooled across forecasters, dates, and horizons. We treat this pooling structure as the object of inference. In a participant-date-horizon Taylor-rule regression model, we compare pooling patterns using Bayesian marginal likelihoods, applying the framework to the Blue Chip Financial Forecasts, Survey of Professional Forecasters, and the Summary of Economic Projections. The preferred specifications place much of the systematic variation in policy-rate forecasts in intercepts that vary across forecast horizons and survey dates. Evidence of \"changing perceptions\" of monetary policy via economically meaningful time-varying response coefficients is weak overall.","also_at":[],"analysis":null,"authors":["Edward Herbst","Karen Page"],"date":"2026-09-18","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"43ed29d7f1df2ca6","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Evaluates methods for estimating monetary policy rules, providing a technical critique of how market participants' expectations are modeled.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":true,"title":"Optimal Pooling in Taylor Rule Estimation with Multiple-Horizon Forecast Panels","url":"https://www.federalreserve.gov/econres/feds/optimal-pooling-in-taylor-rule-estimation-with-multiple-horizon-forecast-panels.htm"},{"abstract":"We develop a rich demand system framework to quantify the yield effects of shifts in U.S. Treasury supply and demand. Our model captures time-varying holdings shares and estimates sectoral demand elasticities using instrumental variables. We find that the Treasury market has become increasingly price-sensitive over time, driven by the declining participation of less price-sensitive foreign official investors and the rising role of more price-sensitive hedge funds and other private investors. A $100 billion increase in Treasury supply currently raises five-year yields by approximately 3 basis points. We validate the model by showing that the shifts in investor base explain a significant portion of historical yield changes. Our framework provides a flexible tool for policy analysis and counterfactual scenarios, including the yield effects of foreign official investor sales and Federal Reserve balance sheet policies.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"U.S. Treasury supply and demand","flags":[],"in_issue":true,"rationale":"The abstract explicitly studies U.S. Treasury supply and demand, naming the United States.","relevance_note":"Policymakers and market participants can use the model to gauge how large Treasury issuances or changes in investor composition may move yields, informing debt-issuance strategy and monetary-policy balance-sheet decisions.","summary":"The paper builds a demand-system model to measure how U.S. Treasury supply and demand shifts affect yields, estimating sectoral elasticities with instrumental variables. It finds the market is now more price-sensitive, with a $100 billion supply increase raising five-year yields by about 3 basis points.","takeaways":["Yield sensitivity has risen as foreign official investors’ share fell and hedge funds’ share grew","A $100 billion increase in Treasury supply lifts five-year yields by roughly 3 basis points","Investor-base shifts explain a large share of past yield movements","The framework can evaluate policy scenarios like foreign sales or Fed balance-sheet actions"],"wording_correction":null},"authors":["Daniel O. Beltran","Canlin Li"],"date":"2026-09-18","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"35f8c938aa4170d6","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":10,"screen_reason":"Quantifies the impact of Treasury supply and demand on yields, directly informing views on Fed balance sheet policy and market sensitivity.","screening_tag":"DM","selected_in":["2026-09"],"source":"fed-ifdp","source_name":"Federal Reserve Board, IFDP","tag":"DM","tag_inferred":false,"title":"Estimating Yield Impacts of Treasury Demand and Supply Changes","url":"https://ideas.repec.org/p/fip/fedgif/103792.html"},{"abstract":"Does the price of synthetic dollar funding depend on which dealer intermediates the trade? We answer this question by comparing FX forwards in the same dollar currency pair, half-hour, and maturity bucket, which removes the common forward curve and isolates dealer-specific pricing. These dealer-specific prices vary substantially: their standard deviation is about 4 basis points per year, and the large dispersion is present both across dealers at a point in time and over time for a given dealer. Dealers charge 2.5 basis points more for buying dollars forward than for selling them, and the gap widens to 11.8 basis points at maturities under one month. The asymmetry survives controls for client-dealer relationships and trade characteristics. Differences in funding costs account for little of the observed price dispersion. Synthetic dollar funding therefore has many prices, reflecting dealer clientele and pricing power more than underlying funding conditions.","also_at":[],"analysis":{"correction":{"checked":"2026-11-03","human_reviewed":true,"made_by":"Claude (AI assistant), on Mustafa Harun Sendur's review","original_tag":"DM","source":"Full paper: Bank of England Staff Working Paper No. 1,207 (PDF), introduction"},"current_prompt":true,"evidence":"We focus on six dollar pairs—EUR, GBP, JPY, CHF, AUD, and CAD against the dollar—and on observed G15 dealer parents.","flags":["tag differs from screening (Transversal); review"],"in_issue":false,"rationale":"The paper studies dollar FX forwards against the euro, sterling, yen, Swiss franc, Australian dollar and Canadian dollar, all advanced-economy currencies.","relevance_note":"Understanding dealer pricing asymmetries helps market participants assess transaction costs and informs regulators about potential pricing power in synthetic dollar funding markets.","summary":"The paper measures dealer-specific pricing in synthetic dollar funding by comparing comparable FX forwards and finds substantial price dispersion across dealers and over time.","takeaways":["Dealer-specific forward prices have a standard deviation of about 4 basis points per year.","Dealers charge 2.5 basis points more for buying dollars forward than for selling them.","The buy-sell gap widens to 11.8 basis points for maturities under one month.","Funding-cost differences explain little of the observed price dispersion."],"wording_correction":{"checked":"2026-11-03","human_reviewed":true,"made_by":"Claude (AI assistant), on Mustafa Harun Sendur's review","reason":"The model called the forwards \"identical\"; the authors compare trades in the same currency pair, half-hour and maturity bucket, so they are comparable, not identical. The takeaways are the model's, unchanged.","source":"Abstract of the Bank of England working paper"}},"authors":["Marco Grotteria","Alex Kontoghiorghes"],"date":"2026-09-18","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"1dd5157305786f0f","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Identifies significant dealer-specific pricing dispersion in FX forward markets, providing critical insights into market microstructure and liquidity.","screening_tag":"Transversal","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":false,"title":"One dollar, many prices: dealer-specific pricing of synthetic dollar funding","url":"https://ideas.repec.org/p/boe/boeewp/023631.html"},{"abstract":"Can cash infrastructure mitigate the adverse effects of a card payment system outage? As cashless payment systems become increasingly prevalent, societies are becoming more vulnerable to technical disruptions such as card payment system outages. This paper investigates a one-day nationwide card payment system outage at a major retailer in Switzerland. To quantify the loss in card sales at the retailer's stores and the increase in cash withdrawals at ATMs, we generate granular counterfactuals by forecasting card payments and cash withdrawals at the store and ATM level. We then use residual-on-residual regressions to control for high-dimensional confounders and estimate the causal effect of outage-induced card payment losses on ATM withdrawals in an event-study framework. Our district-level results suggest that for every 100 lost card payments, there were 11 additional ATM withdrawals. In value terms, for every CHF 100 loss in card payments, ATM withdrawals increased by approximately CHF 68. We also find only limited evidence of increased card payments at competing stores during the outage or at outage-affected stores on the day after the outage. Our findings suggest that cash infrastructure can serve as a resilience buffer during card payment system outages and that consumers rely on cash as their primary fallback payment instrument.","also_at":[],"analysis":null,"authors":["Aurel Ruben Mäder","Christoph Meyer","Yves Nacht","Daniel Gatica-Perez"],"date":"2026-09-16","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"d331a6a04be2ea94","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Examines the resilience of payment systems and the role of cash, providing empirical evidence on consumer behavior during technical outages.","screening_tag":"DM","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Cash saves the day: How cash infrastructure enhances resilience during a card payment system outage","url":"https://ideas.repec.org/p/snb/snbwpa/2026-12.html"},{"abstract":"This paper investigates the impact of monetary policy announcements (MPAs) on household inflation expectations using microdata from the Swiss Consumer Sentiment Survey. Employing an event study approach, we reveal an asymmetric response: while policy rate hikes or decisions to keep rates constant reduce household inflation expectations, rate cuts fail to elicit a reaction. The effect is particularly robust for short-term expectations, with a much less clear-cut influence on long-term expectations. Households across the expectation distribution - both moderate and extreme - react to announcements, indicating a broad impact. We find that household reactions are driven primarily by the anticipated component of policy rate changes, whereas surprising moves tend to be interpreted as signals of new information regarding inflationary pressure. Finally, we report that demographic heterogeneity matters: the effect of MPAs is driven by German-speaking households and tertiary-educated individuals, while others show no consistent response, underscoring the importance of targeted communication strategies for effective monetary policy transmission.","also_at":[],"analysis":null,"authors":["Alexander Goetz","Lucas Kyriacou","Florence Miguet Heimlicher","Stefanie Siegrist"],"date":"2026-09-09","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"a05a67691c617cd6","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Examines how Swiss households adjust inflation expectations after policy moves, shedding light on transmission effectiveness.","screening_tag":"DM","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Do Swiss households revise their inflation expectations after monetary policy announcements?","url":"https://ideas.repec.org/p/snb/snbwpa/2026-11.html"},{"abstract":"Using transaction-level data for Bitcoin (BTC), Ethereum (ETH), and Wrapped Bitcoin (WBTC) matched to public “Whale Alert” signals, we examine how large-scale cryptocurrency trades shape market microstructure. Specifically, we test whether whale transactions alter the composition of active non-whale participants, trigger leader-follower herd behavior, and elevate short-term return volatility. We document a stark divergence between networks: Whale alerts heavily reshape (native) BTC participation by mobilizing previously inactive retail and institutional investors, whereas ETH and WBTC participant profiles remain highly stable on the Ethereum platform. Furthermore, non-whale investors exhibit strong leader-follower behavior in the BTC market — buying and selling in tandem with whale direction. This pattern is largely absent in the Ethereum ecosystem, except among the largest non-whale tranches. These behavioral dynamics directly mirror market stability: Whale alerts induce a brief 24-hour spike in BTC volatility (most acutely following WBTC alerts) but coincide with compressed volatility on the Ethereum platform. Additionally, these asymmetric market responses persisted across Ethereum’s transition from proof-of-work to proof-of-stake. These findings indicate persistent informational and structural asymmetries between large and small digital-asset investors.","also_at":[],"analysis":null,"authors":["Keith Hazen"],"date":"2026-09-04","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"f2fc4d6ade4da901","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Analyzes how large-scale crypto trades impact market microstructure and volatility, offering insights into digital asset market dynamics and liquidity.","screening_tag":"Transversal","selected_in":[],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"Transversal","tag_inferred":false,"title":"How Do Large, Sophisticated Cryptocurrency Trades Impact Broader DeFi Market Dynamics?","url":"https://ideas.repec.org/p/fip/fedpwp/103741.html"},{"abstract":"We study an income-account channel of exchange-rate transmission using matched data on Japanese multinational parents and their foreign affiliates. During the sharp yen depreciation of 2021–22, we find that (i) foreign affiliates with greater exchange-rate exposure expanded their activity and generated more profits, with larger payments to their Japanese parents, and (ii) more exposed parents increased their average wages and shifted employment toward commercial branches and offices involved in sales, purchasing, and related business functions, with offsetting declines in other employment. A multinational firm model in which scarce parent-side support inputs are allocated between domestic operations and foreign affiliates rationalizes these findings. To study the aggregate implications, we embed this mechanism in a two-country general-equilibrium model with trade and multinational production. The model shows that moving foreign-market activity from exports to affiliate production reduces the domestic real GDP response to depreciation and shifts more of the external adjustment from trade and toward income earned abroad. Depreciation therefore need not generate a large expansion in domestic production.","also_at":[],"analysis":null,"authors":["Ryan Kim","Bin Ni","Hyunseung Oh","Choongryul Yang"],"date":"2026-09-04","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"9f017d8522b516e6","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Examines FX depreciation effects via Japanese multinationals, informing trade and exchange-rate transmission insights.","screening_tag":"DM","selected_in":[],"source":"fed-ifdp","source_name":"Federal Reserve Board, IFDP","tag":"DM","tag_inferred":false,"title":"Exchange Rate Transmission through Multinational Firms: Evidence from Japan","url":"https://ideas.repec.org/p/fip/fedgif/103753.html"},{"abstract":"We assess the macroeconomic effects of the output floor, a new regulatory constraint introduced as part of the Basel III framework. The output floor is designed to provide a backstop against excessively low risk-weighted assets (RWA) modelled by banks relative to the riskiness of the underlying exposures. Our model shows that it counteracts the downward pressure on modelled RWA during economic expansions and, in turn, reduces the cyclicality of risk-weighted capital requirements. This mitigates increases in the credit-to-GDP ratio and supports the objectives of the macroprudential authority. Our analysis also uncovers important sectoral effects. Estimating the model for the UK economy, we find that during an expansion the output floor dampens the growth of mortgage lending but amplifies the expansion of lending to firms, although the latter effect is more than offset by the former.","also_at":[],"analysis":null,"authors":["Jonathan Acosta-Smith","Marzio Bassanin","Ivy Sabuga"],"date":"2026-09-04","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"503cb36aa1d61eaf","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Analyzes Basel III output floor impact on UK credit cycles, directly relevant to macroprudential policy and banking markets.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":false,"title":"Macroeconomic dynamics of the output floor","url":"https://ideas.repec.org/p/boe/boeewp/023582.html"},{"abstract":"We study how the financing of innovation shapes the transmission of monetary policy to productivity. Using US firm balance-sheet data matched to loan contracts, we show that contractionary monetary policy shocks reduce cash flow similarly across firms but lower R&D more among those without access to cash flow-based borrowing, where credit is extended against earnings rather than collateral. In a New Keynesian endogenous growth model with heterogeneous access to external finance, we show that a 25 basis point tightening lowers output persistently by 0.12%. Extending access to all firms reduces this loss by one third. The loss falls disproportionately on firms without access, which are younger and produce more and higher-quality patents.","also_at":[],"analysis":null,"authors":["Aydan Dogan","Ozgen Ozturk"],"date":"2026-09-04","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"361d0600678d1ef4","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Shows how financial frictions in innovation alter monetary policy transmission, relevant for US market dynamics.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":false,"title":"Innovation, financial frictions, and persistent effects of monetary policy","url":"https://ideas.repec.org/p/boe/boeewp/023581.html"},{"abstract":"We model artificial intelligence (AI) as a distinct capital input in a nested CES aggregate production function that extends work done by Krusell et al. (2000) and embed it in a dynamic general equilibrium economy. By bringing the model to the data, we estimate the degree to which AI either substitutes for or complements the other production inputs at the aggregate level. We find that AI is complementary to the high-skill–equipment composite and that the AI weight in production remains small. We then use the model to study how this complementarity shapes the macroeconomic and distributional effects of AI capital accumulation. The estimated model implies different effects of alternative AI shocks. A rise in the AI usage share is contractionary as it increases reliance on a scarce complementary input. A fall in AI prices is expansionary due to the lower cost of accumulating AI capital. A tax on AI capital income raises limited revenue while the AI capital stock remains small, but can finance welfare-improving transfers as the AI price falls. A large-scale universal basic income (UBI) funded jointly by a consumption tax slows AI investment with welfare gains for low-skill workers at the expense of losses for high-skill workers and entrepreneurs. On the measurement side, we construct a quality-adjusted AI price index from hedonic regressions and build a corresponding AI capital stock.","also_at":[],"analysis":null,"authors":["André Luduvice","Roberto Pinheiro"],"date":"2026-09-04","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"15d0fd82e85393c5","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Quantifies AI’s capital-skill complementarity and macro effects, informing policy and growth forecasts.","screening_tag":"Transversal","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"Transversal","tag_inferred":false,"title":"AI-Augmented Capital-Skill Complementarity","url":"https://ideas.repec.org/p/fip/fedcwq/103765.html"},{"abstract":"In the pandemic era, people moved from high-density, expensive areas to more affordable areas, putting upward pressure on local housing prices. We examine the geographic distribution of rent growth during this time and its effects on renters. We use administrative new lease data from RealPage and household-level data on rent and income from the American Community Survey. We analyze rents and incomes using Public Use Microdata Areas grouped in two ways: by prepandemic rent levels and by pre-pandemic rent-to-income ratios. Rents grew more in areas with lower pre-pandemic rents but not in areas with lower rent-to-income ratios, consistent with higher-income remote workers moving away from high rent areas to more affordable areas. Lower-income households experienced larger increases in rent relative to their income compared to the median renter. However, area-level rent-to-income ratios reflect both compositional changes in renter populations from mobility and changes in local rents. We highlight the need for future work to track affordability for the same households over time to fully understand pandemic era affordability trends.","also_at":[],"analysis":null,"authors":["Erin Troland","Isabella Agnes","Jessica Liu","Fatimah Shalaan","Michelle Tran","Douglas Webber"],"date":"2026-09-03","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"cfbc3f0a60e33fd3","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Analyzes pandemic-era rent growth and affordability in US regions, relevant to housing market dynamics.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":true,"title":"The Flight to Affordability: Effects of Pandemic Rent Increases on Renters By Geography","url":"https://www.federalreserve.gov/econres/feds/the-flight-to-affordability-effects-of-pandemic-rent-increases-on-renters-by-geography.htm"},{"abstract":"Would widely adopted stablecoins affect the price level, and through which channels? We analyse this question in the monetary general-equilibrium framework of Dubey and Geanakoplos, in which payment capacity—money, bank credit and the spendable share of government bonds—determines nominal outcomes. Stablecoins backed by government debt open a channel of inflationary finance: the existing bond stock becomes spendable (a stock effect) and newly issued debt arrives spendable (a flow effect), with the price level rising in the payment capacity so created and in the breadth of adoption. Monetary policy can offset the rise, but only at the cost of suppressing the trade that bank credit finances. Beyond these bounded effects, current regulatory design does not close an escalation path on which stablecoins become a competing outside money, putting nominal determinacy at risk. Whether these effects materialise is largely a policy choice: they require adoption in ordinary payments, which regulation currently shapes.","also_at":[],"analysis":null,"authors":["Martin Summer"],"date":"2026-09-03","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"8cccbc10a4a1c7f1","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Explores stablecoin adoption’s inflationary channels, linking digital assets to monetary policy and price stability.","screening_tag":"Transversal","selected_in":[],"source":"oenb","source_name":"Oesterreichische Nationalbank","tag":"Transversal","tag_inferred":false,"title":"Stablecoins, Inflation and the Settlement Hierarchy","url":"https://ideas.repec.org/p/onb/oenbwp/280.html"},{"abstract":"The Federal Reserve implements monetary policy using an ample reserves system, which does not require active management of the total quantity of reserves to maintain interest rate control. The distribution and the diffusion of reserves across banks, and groups of banks, is a key factor in determining the (minimum) ample level of reserves consistent with that objective. If large portions of the outstanding amount of reserves can become effectively \"trapped\" in segments of the banking system, then the total level of reserves needed to achieve the intended objective may be higher. We propose a Markovian framework to study the weekly flow of reserves across groups of banks between 2010 and 2024. We group banks according to types (foreign and domestic, large and small) and Fed districts. The diffusion process depends on how reserves flow in and out of the system. We compute counterfactuals which shed light on the way the distribution of reserves would adapt to plausible changes in conditions. In general, the distribution of reserves tends to be highly persistent during periods of abundant reserves, but redistribution intensifies when reserves reach lower (yet, still ample) levels.","also_at":[],"analysis":null,"authors":["Huberto M. Ennis","Alexander L. Wolman"],"date":"2026-09-03","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"0b93130d0dd0380f","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Studies US reserve distribution under ample-reserves regime, crucial for monetary policy implementation and market liquidity.","screening_tag":"DM","selected_in":[],"source":"fed-richmond","source_name":"Federal Reserve Bank of Richmond","tag":"DM","tag_inferred":false,"title":"The Diffusion of Bank Reserves in the U.S","url":"https://ideas.repec.org/p/fip/fedrwp/103733.html"},{"abstract":"This paper examines which representations of persistence and nonlinearity are most useful for forecasting realized volatility and whether machine learning adds value beyond econometric models designed for long memory and regime dependence. We compare HAR, ARFIMA, threshold HAR, smooth-transition HAR, and Markov-switching HAR with XGBoost and several neural-network models for the S&P 500 and 40 U.S. equities. Models are evaluated under a baseline information set using realized-volatility history and an extended set of predictors selected by Elastic Net. Forecast performance is assessed using MSFE, MAE, QLIKE, Model Confidence Sets, Diebold–Mariano tests, realized utility, and filtered-historical-simulation VaR and expected shortfall. The results reveal a robust horizon-dependent ranking: Markov-switching HAR performs best at short horizons, ARFIMA generally leads at the monthly horizon, and the five-day horizon is intermediate. Machine-learning models sometimes improve on HAR but do not systematically outperform the broader econometric set. These findings are robust across estimation windows, re-estimation frequencies, richer information sets, log-volatility targets, and individual equities; stock-level results are also robust to an alternative realized-volatility measure. Overall, forecast performance depends primarily on capturing the persistence and nonlinear dynamics most relevant at each horizon.","also_at":[],"analysis":null,"authors":["Rehim Kilic"],"date":"2026-09-02","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"d674f3cceec2421d","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":5,"screen_reason":"Evaluates the efficacy of machine learning versus traditional econometric models for volatility forecasting, useful for quantitative research and risk management.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":false,"title":"Linear and Nonlinear Econometric Models versus Machine-Learning Models: Evidence from Realized-Volatility Forecasting(Revised)","url":"https://www.federalreserve.gov/econres/feds/linear-and-nonlinear-econometric-models-against-machine-learning-models.htm"},{"abstract":"We examine the transmission of monetary policy shocks to the macroeconomy at high frequency. To do so, we construct daily consumption and investment aggregates from bank transaction records and leverage administrative data on daily corporate sales and employment for Spain. We show that variables typically viewed as slow-moving, such as consumption and corporate sales, respond significantly within weeks. By contrast, aggregate employment and (monthly) consumer prices adjust only gradually. Disaggregating responses by sector, consumption category and supply-chain distance from final demand, we find that fast demand adjustment is led by downstream sectors closely tied to consumption—especially luxury goods and durables—while upstream sectors respond more slowly but more persistently, ultimately accounting for the contraction in aggregate activity. Excess inventories accumulate first in retail and wholesale trade and only later among upstream manufacturers, reconciling the rapid adjustment of sales with the slower response of production and employment. Finally, we show that time aggregation to the quarterly frequency obscures the timing of monetary policy transmission by shifting estimated responses to longer horizons, whereas weekly and monthly aggregation preserve the patterns observed at daily frequency.","also_at":[],"analysis":null,"authors":["Guilherme Alves da Silva","Gergely Buda","Vasco M. Carvalho","Giancarlo Corsetti","João B. Duarte","Stephen Hansen","Afonso S. Moura","Alberto Ortiz","Tomasa Rodrigo","José V. Rodriguez Mora"],"date":"2026-09-02","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"438af44228860b53","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Provides high-frequency evidence of monetary policy transmission in Spain, useful for understanding short-run market responses.","screening_tag":"DM","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"DM","tag_inferred":false,"title":"The Short Lags of Monetary Policy","url":"https://ideas.repec.org/p/fip/feddwp/103794.html"},{"abstract":"We quantify the implicit too-big-to-fail (TBTF) funding advantage of large Eu-ropean banks using CDS market data. Applying a reduced-form asset pricing frame-work, we decompose spreads into a fundamental credit-risk component and a resid-ual wedge attributable to implicit government support. We do not find evidence that G-SIB designation is associated with lower funding costs once bank funda-mentals and sovereign factors are taken into account. By contrast, banks whose assets exceed half of home-country GDP enjoy at least 30% lower credit spreads than those of otherwise comparable peers. A time-varying specification reveals that the TBTF wedge persists through 2024, and while average spreads are significantly lower across the board compared to the period around the Great Financial Crisis, the implicit bailout guarantee as a proportion of total spreads has not diminished in recent years. Moreover, the results suggest that the TBTF premium depends on sovereign fiscal strength: the funding advantage of systemic banks declines when home-sovereign CDS spreads rise. This points to Europe’s TBTF problem being primarily domestic in nature and relates to the strength of the home sovereign.","also_at":[],"analysis":null,"authors":["Laura Deen","Daniel Dimitrov"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"fff64d45ab4daa1b","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"TBTF funding advantage informs bank funding costs and sovereign-bank risk assessments in Europe.","screening_tag":"DM","selected_in":[],"source":"dnb","source_name":"De Nederlandsche Bank Working Papers","tag":"DM","tag_inferred":true,"title":"Systemic at Home: the Persistence of a Too-Big-to-Fail Premium in Europe","url":"https://ideas.repec.org/p/dnb/dnbwpp/868.html"},{"abstract":"The conflict in the Middle East and the subsequent disruption of traffic in the Strait of Hormuz have triggered an unprecedented shock to the global economy. Using historical data from the IMF/University of Oxford Portwatch database on maritime traffic, this paper empirically examines some of the potential economic and financial consequences of disruptions to traffic in the Strait of Hormuz. The analysis highlights the role of this chokepoint as a global supply indicator, with traffic disruptions acting as a global stagflation-inducing force. While commodity prices — especially energy prices — tend to increase after an adverse shock to traffic in the Strait of Hormuz, such negative shocks are systematically followed by a combination of lower global output and higher global consumer prices. In addition, negative shocks to traffic in the Strait of Hormuz tighten financial conditions, with spreads on both advanced economies (AEs) corporate bonds and emerging market economies (EMEs) sovereign bonds widening significantly. These findings underscore the Strait of Hormuz’s critical role in the global economy and highlight avenues for future research on chokepoint shocks.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"spreads on both advanced economies (AEs) corporate bonds and emerging market economies (EMEs) sovereign bonds widening significantly","flags":[],"in_issue":false,"rationale":"The abstract mentions impacts on both advanced economies and emerging market economies, indicating a global focus.","relevance_note":"Policymakers and market participants should note that disruptions at this chokepoint were followed by higher consumer prices, weaker global output and wider bond spreads in both advanced and emerging economies.","summary":"The paper uses IMF/University of Oxford Portwatch data on maritime traffic to study the economic and financial consequences of disruptions to traffic in the Strait of Hormuz. It finds that adverse shocks to traffic are followed by lower global output and higher global consumer prices, alongside higher commodity prices, especially energy prices, and wider bond spreads in both advanced and emerging economies.","takeaways":["Commodity prices, especially energy prices, tend to increase after an adverse shock to traffic in the Strait of Hormuz.","Such negative shocks are systematically followed by lower global output and higher global consumer prices.","Spreads on advanced-economy corporate bonds widen significantly after a negative shock to traffic.","Spreads on emerging-market sovereign bonds also widen significantly."],"wording_correction":{"checked":"2026-11-03","human_reviewed":true,"made_by":"Claude (AI assistant), on Mustafa Harun Sendur's review","reason":"The model wrote \"traffic shocks raise\" prices, which reads as more traffic raising prices (the abstract means disruptions to traffic), turned \"are followed by\" into \"raise\" and \"reduce\", wrote \"higher consumer inflation\" where the abstract says higher global consumer prices, and carried inflation into \"Why it matters\".","source":"Abstract of the BIS working paper"}},"authors":["Enisse Kharroubi"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"fb057b531f278cbe","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Empirical evidence that Hormuz disruptions raise energy prices, widen bond spreads and affect global output.","screening_tag":"Transversal","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"Transversal","tag_inferred":false,"title":"Maritime chokepoints and the global economy: evidence from the Strait of Hormuz","url":"https://ideas.repec.org/p/bis/biswps/1378.html"},{"abstract":"This paper considers tests for skewness, kurtosis and normality of the one-dimensional marginal distribution of a stationary fractional process, which may exhibit short memory, antipersistence or long memory. The autoregressive-sieve bootstrap is used to obtain Pvalues and critical values for tests based on studentized empirical coefficients of skewness and kurtosis. These studentized coefficients are constructed using variance estimators obtained by the same bootstrap procedure. Notably, such tests, as well as variants based on non-studentized statistics, can be implemented in a straightforward manner without requiring knowledge or estimation of the memory parameter of the process. Monte Carlo simulations show that the bootstrap-assisted tests perform well for sample sizes that are typical in applied settings. The methodology is further illustrated through an application to realized measures of stock-return volatility.","also_at":[],"analysis":null,"authors":["Charisios Grivas","Zacharias Psradakis","Marian Vavra"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"fa195b9958c7984f","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":3,"screen_reason":"Presents a technical econometric method for testing distribution properties in stationary processes, with limited direct application to broader macro or policy debates.","screening_tag":"Transversal","selected_in":[],"source":"nbs","source_name":"National Bank of Slovakia","tag":"Transversal","tag_inferred":false,"title":"Bootstrap-Assisted Tests for Skewness, Kurtosis, and Normality Under Unknown Dependence","url":"https://ideas.repec.org/p/svk/wpaper/1146.html"},{"abstract":"We use the euro cash changeover, a large-scale and purely nominal reform that requires all firms to redenominate posted prices, to distinguish among theories of price rigidity. We develop a nonstationary menu-cost model in which firms anticipate the changeover date and may combine currency adoption with real price adjustment. The announcement makes the firm’s inaction region time-varying, a singular control problem with a moving boundary for which closed-form characterizations are rarely available. We solve this problem analytically by perturbation, recovering the whole path of the boundary, the date at which firms begin adopting the new currency, and the implied pricing moments. The model predicts that, as the changeover approaches, firms adjust more frequently but by smaller amounts, compressing the distribution of price changes. We test these predictions using historical CPI micro data from Austria, Finland, Greece, and Slovakia, a UK benchmark, and daily price data from the recent changeovers in Croatia and Bulgaria. Across changeovers, adjustment frequency rises while the size and dispersion of price changes fall. The model adds a single parameter to the standard menu-cost setup, the cost of pricing in the wrong currency. Calibrating it to the observed rise in adjustment frequency, the model reproduces the decline in the size of price changes and its subsequent recovery, neither of which is targeted. The evidence supports state-dependent price-setting models over models in which nominal redenomination leaves real pricing behavior unchanged.","also_at":[],"analysis":null,"authors":["Fernando E. Alvarez","David Argente","Alberto Cavallo","Francesco Lippi"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"f7a68fecdce486db","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Tests price-rigidity theories during euro changeover, offering insights for monetary policy and inflation dynamics.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Price Setting During a Currency Changeover","url":"https://ideas.repec.org/p/nbr/nberwo/35790.html"},{"abstract":"We study how the U.S.-China trade war has reshaped global trade patterns, creating significant spillovers to third countries. Using recent tariff policy changes and monthly international trade flow data, we document a redirection of Chinese exports away from the U.S. market and toward third countries. To interpret the impact of these reallocations on third countries, we introduce a taxonomy that separates four exposure margins - export competition, import competition, consumer gains, and sourcing gains - and construct theoretically-derived indices that map countries into these channels. Recent work often proxies such exposure with trade-basket similarity. We show why this can be problematic: similarity measures are symmetric and omit the size of product-specific shocks, Chinese market penetration, substitution elasticities, and incidence weights. Our model-based indices therefore generate country rankings that differ substantially from conventional similarity measures.","also_at":[],"analysis":null,"authors":["Pol Antràs","Adrian Kulesza","Andrea F. Presbitero"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"f5455635af54e18e","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Quantifies spillovers from the US-China trade war, informing global trade policy and third-country effects.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"The Remains of the Trade: The U.S.–China Trade War and its Aftermath","url":"https://ideas.repec.org/p/nbr/nberwo/35785.html"},{"abstract":"This paper analyzes the cyclical properties of the optimal labor wedges in a Mirrleesean business cycle model. Agents value consumption and leisure and receive persistent idiosyncratic shocks to their value of leisure, which are private information. The production structure is identical to a standard real business cycle model with aggregate productivity shocks. Solving the mechanism design problem for a version of this economy calibrated under logarithmic preferences, I find that the optimal labor wedges are approximately constant over the business cycle.","also_at":[],"analysis":null,"authors":["Marcelo Veracierto"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"f42ae28217b978c4","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":3,"screen_reason":"Theoretical optimal tax analysis with constant labor wedges; minimal direct market impact.","screening_tag":"DM","selected_in":[],"source":"fed-chicago","source_name":"Federal Reserve Bank of Chicago","tag":"DM","tag_inferred":true,"title":"Optimal Mirrlees Taxation over the Business Cycle","url":"https://ideas.repec.org/p/fip/fedhwp/103967.html"},{"abstract":"How costly is inflation to workers? Answers to this question have focused on the path of real wages during inflationary periods. We argue that workers must take costly actions (“conflict”) to have nominal wages catch up with inflation, meaning there are welfare costs even if real wages do not fall as inflation rises. We study a menu‐cost style model, where workers choose whether to engage in conflict with employers to secure a wage increase. We show that, following a rise in inflation, wage catch‐up resulting from more frequent conflict does not raise welfare. Instead, the impact of inflation on worker welfare is determined by what we call “wage erosion”—how inflation would lower real wages if workers' conflict decisions did not respond to inflation. As a result, using observed wage growth to measure worker welfare understates the costs of inflation. We conduct a survey showing that workers are willing to sacrifice around 1.75% of their wages to avoid conflict. Calibrating the model to survey data, we find that incorporating conflict significantly raises the costs of inflation for workers.","also_at":[],"analysis":null,"authors":["Joao Guerreiro","Jonathon Hazell","Chen Lian","Christina Patterson"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"publisher issue page","doi":"10.3982/ecta23874","doi_registered":"2026-09-14","flags":[],"group":"journal","id":"f3d2931b841908ed","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":6,"screen_reason":"Links inflation to worker welfare via conflict costs, informing inflation policy impacts.","screening_tag":"DM","selected_in":[],"source":"econometrica","source_name":"Econometrica","tag":"DM","tag_inferred":true,"title":"Why Do Workers Dislike Inflation? Wage Erosion and Conflict Costs","url":"https://doi.org/10.3982/ecta23874"},{"abstract":"We show that the parameters of a broad class of portfolio-balance models can be recovered from estimates of Gaussian dynamic term structure models (GDTSMs) using a two-step estimator that bypasses the fixed-point problem that characterizes portfolio balance models. Specifically, we develop a novel canonical representation of bond supply in terms of factor-mimicking portfolios, whose returns replicate the structural shocks to the pricing factors. We identify these structural shocks by assuming that each shock corresponds to a distinct, mutually exclusive dimension of bond-supply variation. Using U.S. Treasury yields and macroeconomic data, we show the recovered shocks admit interpretations as hedging-risk-premium, risk-bearing-capacity, and monetary policy shocks.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"Using U.S. Treasury yields and macroeconomic data","flags":[],"in_issue":false,"rationale":"The abstract references U.S. Treasury yields, tying the work to the United States, an advanced economy.","relevance_note":"Understanding how bond-supply shocks map to risk premia and policy effects can inform yield-curve modeling and monetary-policy transmission analysis for market participants and policymakers.","summary":"The paper proposes a two-step estimator that extracts portfolio-balance model parameters from Gaussian dynamic term structure models, avoiding the usual fixed-point problem. Applying it to U.S. Treasury yields and macro data, the recovered shocks are interpreted as hedging-risk-premium, risk-bearing-capacity, and monetary-policy shocks.","takeaways":["A canonical representation links bond supply to factor-mimicking portfolios that replicate structural shocks.","The two-step estimator bypasses the fixed-point problem in portfolio-balance models.","Recovered shocks from U.S. data align with hedging-risk-premium, risk-bearing-capacity, and monetary-policy interpretations."],"wording_correction":null},"authors":["Antonio Diez de los Rios"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"f1b29171229587cf","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Provides a new approach to estimating portfolio-balance models of the yield curve, directly linking bond supply and structural shocks to Treasury yields.","screening_tag":"DM","selected_in":[],"source":"boc","source_name":"Bank of Canada Staff Working Papers","tag":"DM","tag_inferred":false,"title":"A New Approach to Estimating Portfolio-Balance Models of the Yield Curve","url":"https://ideas.repec.org/p/bca/bocawp/26-33.html"},{"abstract":"Analyses of impacts of potential mergers in differentiated product markets often rely on non-transparent identification and strong conduct assumptions. We propose a simpler alternative: using quasi-exogenous variation in market structure to estimate equilibrium pricing policy functions. When price can appropriately capture consumer welfare, this methodology may require fewer assumptions than a structural equilibrium approach, including allowing variation in conduct. We apply this methodology to the JetBlue–Spirit merger, estimating policy functions using entry events. Our counterfactual price simulations account for changes in JetBlue’s capacity and Sprit’s elimination. The merger would cause $2.6 billion in annual harm under our preferred specification.","also_at":[],"analysis":null,"authors":["Gautam Gowrisankaran","Christopher D. Bruegge","Alex Gross"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"ef96937d098ecef7","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Provides merger impact estimate for JetBlue-Spirit, directly relevant to competition policy and airline markets.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Using Policy Functions to Estimate Merger Impacts: An Application to JetBlue-Spirit","url":"https://ideas.repec.org/p/nbr/nberwo/35787.html"},{"abstract":"The Atlantic Meridional Overturning Circulation (AMOC) is a system of ocean currents that plays a key role in regulating global climate, including moderating temperatures in Europe and the North Atlantic. Its potential collapse due to global warming is widely considered one of the more likely climate tipping points. This paper examines the economic implications of such a collapse using a dynamic spatially integrated assessment model (S-IAM) of the world economy. Scandinavia and parts of Russia are predicted to experience significant losses in GDP and welfare, while southern Europe, northern Africa, and Brazil benefit from slightly colder temperatures. S-IAMs generally predict that global warming is especially harmful to low-income regions, but an AMOC collapse could mitigate some of these negative impacts in parts of the developing world while instead harming some of the more advanced economies. This lowers spatial inequality, but global welfare drops by 1.9% by 2200 under an intermediate-emissions scenario.","also_at":[],"analysis":null,"authors":["José-Luis Cruz","Klaus Desmet","Esteban Rossi-Hansberg"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"ef09d2cde6e812a1","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":5,"screen_reason":"Evaluates economic fallout of AMOC collapse, highlighting regional welfare shifts across economies.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Evaluating the Spatial Consequences of a Climate Tipping Point","url":"https://ideas.repec.org/p/nbr/nberwo/35811.html"},{"abstract":"We investigate how limiting interest deductibility under the 2017 TCJA shapes corporate innovation. Using alternative identification strategies, we show that, relative to unaffected firms, affected firms experience significant declines in patenting and narrow the technological scope of their patent portfolios. This contraction is concentrated in exploitative patents, the type of innovation most naturally supported by debt financing. By weakening firms’ ability to finance innovation with long-term debt, interest limitations reveal a novel channel linking taxation to innovation, with the debt tax shield serving as an implicit subsidy. Cross-country evidence from the staggered implementation of interest limitation rules confirms negative effects.","also_at":[],"analysis":null,"authors":["Xinru Chen","Mara Faccio","Stefano Manfredonia","Jin Xu"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e8af93f126f13cd4","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Shows how interest-deduction limits affect corporate innovation, relevant for tax policy and equity markets.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"When Tax Shields Shrink: Interest Deductibility Limitations and Corporate Innovation","url":"https://ideas.repec.org/p/nbr/nberwo/35775.html"},{"abstract":"We study how aggregate financial conditions shape firm insurance and, through it, labor income risk. In a directed search model with dynamic wage contracts and two-sided limited commitment, firm insurance against idiosyncratic shocks erodes when risk premia rise. Using U.S. administrative data, we document new evidence supporting the model: pass-through of firm shocks to earnings rises in bad times, especially for lower-paid workers near the separation margin. The model reproduces many untargeted time-series and cross-sectional features of earnings risk and implies substantial welfare costs of idiosyncratic risk, high private discount rates on human capital, and large gains from recession-contingent transfers.","also_at":[],"analysis":null,"authors":["Maarten Meeuwis","Dimitris Papanikolaou","Lawrence D.W. Schmidt"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e63591a5ff605c65","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Links risk premia to firm insurance and labor income risk, with implications for recession-contingent policies.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Risk Premia, Firm Insurance, and Endogenous Labor Income Risk","url":"https://ideas.repec.org/p/nbr/nberwo/35781.html"},{"abstract":"Importers are few and large, have higher labor productivity and pass through cost changes to prices incompletely. We study optimal tariffs in a model consistent with these facts. Firms pay a fixed cost to import and charge markups that increase with size. Market power implies that importers are too few and too small relative to the efficient allocations. Tariffs amplify this distortion. We derive a formula that relates the optimal tariff not only to the foreign export supply elasticity but also to how much distortions amplify the effect of trade costs on welfare. In our calibrated economy the optimal tariff is negative and decreases with country size.","also_at":[],"analysis":null,"authors":["Jonathan Becker","Corina Boar","Virgiliu Midrigan"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e4222ad96fbd2d5e","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Analyzes optimal tariffs and welfare effects, directly informing trade policy and market outcomes.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Importers, Market Power and Optimal Tariffs","url":"https://ideas.repec.org/p/nbr/nberwo/35829.html"},{"abstract":"How big are the gains to international migration? How do they vary across migrants? We study these questions using linked administrative data for Austria and Germany, focusing on migrants who were steadily employed 2-4 years before their move and using their previous co-workers as a comparison group for a difference-in-differences design. We combine data from the origin and destination countries for 5 years after the move, allowing us to assess the gains for those who remain in the destination and those who return. On average, migrants from Austria to Germany experience an immediate and persistent rise of around 13% in their daily wage relative to their matched co-workers, while migrants from Germany to Austria gain about 4%. The higher returns for Austrians are mainly driven by higher average wages in Germany, rather than by differential selection of migrants. Consistent with a dynamic learning model, the returns to migration are largest for migrants who remain in the destination country, smaller for those who return after 1-4 years, and zero or even slightly negative for those who return in less than a year. They are also larger for migrants who follow established cross-border networks between workplaces. To help interpret our findings we conduct a parallel analysis of domestic migrants who move to a larger city (Vienna or one of the 5 largest cities in Germany). “Big city” movers experience gains in wages of about 5% for Austrians and 10% for Germans. Again the gains are largest for those who remain in the destination city, with smaller effects for those who move on.","also_at":[],"analysis":null,"authors":["Andrea Weber","David Card","Wolfgang Dauth","Wolfgang Frimmel","Julia Schmieder","Rudolf Winter-Ebmer"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e3fef64dfbfffe44","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Quantifies wage gains from cross-border migration in Europe, relevant for labor-market policy and migration economics.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"The Returns to International Migration in a Free Mobility Setting: Evidence from Austria and Germany","url":"https://ideas.repec.org/p/nbr/nberwo/35774.html"},{"abstract":"Do transportation disruptions affect aggregate outcomes? We develop a tractable model of the transportation sector to study its impact on prices and international trade. By casting maritime transportation as a queueing network, the model identifies where the transportation bottlenecks lie and delivers a simple and easy-to compute measure of transportation capacity over time. We calibrate the model using shipping and trade data and use it to evaluate the resilience of the shipping sector during the last 20 years. During the Great Supply Chain Disruption, port bottlenecks raised commodity prices and caused shortages, but a contemporaneous contraction in commodity supply reduced shipping demand and thereby dampened these effects. By contrast, insufficient shipping capacity was a key driver of price increases during the 2000s Commodity Supercycle.","also_at":[],"analysis":null,"authors":["Giulia Brancaccio","Myrto Kalouptsidi","Theodore Papageorgiou","Yixin Zhou"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"e0983ad00f94811a","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Models shipping bottlenecks’ effect on prices and trade, directly relevant to global commodity markets.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Transportation Bottlenecks and Aggregate Shocks","url":"https://ideas.repec.org/p/nbr/nberwo/35812.html"},{"abstract":"Wealth surveys systematically under-represent affluent households because wealthy respondents are less likely to participate. We study whether targeted incentives can improve top-tail coverage in the Slovak Household Finance and Consumption Survey (HFCS). Using census data, we pre-identify affluent households and randomly assign them to treatment and control groups. Treated households are offered a limited-edition non-cash participation incentive: a proof-quality silver collector coin. The incentive increases participation by 11–14 percentage points, equivalent to a roughly 40% increase relative to the participation rate among non-incentivized wealthy households, with the largest effects occurring when combined with personal interviewer contact. The treatment disproportionately attracts financially sophisticated households, improving coverage of the upper tail of the wealth distribution without reducing response quality. Incorporating these additional households increases measured mean wealth, raises the wealth Gini coefficient by up to 6.5%, and improves alignment between survey aggregates and National Accounts. Our findings show that fieldwork design and participation incentives materially affect the measurement of wealth inequality and may contribute to cross-country differences in HFCS-based statistics.","also_at":[],"analysis":null,"authors":["Sofie R. Waltl","Judita Jurasekova Kucserova","Zuzana Brokesova","Boris Frankovic","Andrej Cupak"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"de526428b200981d","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":1,"screen_reason":"Survey incentive design is methodological with little immediate market relevance.","screening_tag":"DM","selected_in":[],"source":"nbs","source_name":"National Bank of Slovakia","tag":"DM","tag_inferred":false,"title":"Reach me if you can: How to boost participation of rich households in wealth surveys?","url":"https://ideas.repec.org/p/svk/wpaper/1145.html"},{"abstract":"Publicly subsidized insurance programs can create incentives for subsidy capture when insured products closely resemble privately traded financial instruments. Livestock Risk Protection (LRP) is one such case because it provides price insurance through a contract that closely resembles an exchange-traded put option. Using LRP endorsement records and matched CME options data for 2020–2025, we document that endorsement activity clusters around CME option expiration dates, especially for feeder cattle and lean hogs. Because producer-level derivatives positions are unobserved, however, timing patterns alone cannot identify subsidy capture. We therefore simulate returns to combined LRP-CME strategies using observed contract terms, option prices, and trading frictions, including bid-ask spreads, margin requirements, and financing costs. We find that the subsidy-created premium wedge is observable at purchase, but realized gains are small, commodity-specific, and concentrated in low-volatility environments where realized volatility falls below implied volatility. Even in those favorable cases, combined strategies substantially worsen downside outcomes relative to holding LRP alone. Additional evidence shows that clustering persists across volatility regimes and after the 2025 revisions to the LRP Handbook, suggesting that observed timing patterns may reflect contract alignment and routine hedging practices, instead of widespread economically meaningful subsidy capture.","also_at":[],"analysis":null,"authors":["Yifei Zhang","Andrew Keller","Shawn Arita","Sandro Steinbach"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"dc22435796431a5e","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Analyzes subsidy capture in livestock risk protection, shedding light on commodity insurance market dynamics.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Timing, Trading Frictions, and the Limits of Subsidy Capture in Livestock Risk Protection","url":"https://ideas.repec.org/p/nbr/nberwo/35819.html"},{"abstract":"Development accounting is the search for proximate sources of cross-country income differences. This article describes how knowledge in this field has evolved over the two decades since the influential work of Caselli (2005). There have been large advances in the measurement of production inputs (labor, physical capital, and human capital). These advances have raised the estimated contribution of inputs, mostly human capital, in development accounting. Our preferred estimate is that inputs account for 55–70 percent of gross domestic product (GDP) per worker differences, versus 30 percent using the classic specification. The literature has also made progress in moving away from Cobb-Douglas production functions and measuring factors such as management quality that were previously bundled into total factor productivity (TFP). Our review highlights the new implications of these advances, areas where future research would be beneficial, and the limitations of development accounting.","also_at":[],"analysis":null,"authors":["David Lagakos","Todd Schoellman"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"d7eaae3884a94e31","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":5,"screen_reason":"Reviews development accounting advances, broadly relevant to growth but with indirect market impact.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Accounting for Cross-Country Income Differences Revisited","url":"https://ideas.repec.org/p/nbr/nberwo/35826.html"},{"abstract":"Do stimulus checks—one-off, deficit-financed lump-sum payments to households—boost the economy? We study a natural experiment: payments to U.S. veterans after World War II that mimic stimulus checks but were plausibly exogenous to the economy. These payments led to a temporary increase in transfers and a persistent, hump-shaped increase in consumption. The transfer multiplier—the cumulative response of consumption to transfers—reaches 1 after six months and exceeds 2 after a year. The standard heterogeneous-agent New Keynesian model cannot match the hump-shaped consumption response. A version with imperfect expectations—with households underreacting on impact but overreacting at longer horizons—can match our estimates.","also_at":[],"analysis":null,"authors":["Joao Guerreiro","Jonathon Hazell","Diego R. Känzig","Ed Manuel"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"d7bda70092c7939a","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Provides empirical transfer multiplier for post-war stimulus checks, informing fiscal policy effectiveness.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"The Macroeconomic Effect of Stimulus Checks: Evidence from Postwar Veterans’ Payments","url":"https://ideas.repec.org/p/nbr/nberwo/35786.html"},{"abstract":"We examine how macroeconomic and geopolitical developments in the United States, the euro area, and China affect the currency composition of central banks’ foreign exchange reserves. Using an unbalanced panel of reserve shares for 53 countries over 1999–2023, we estimate a constrained system of equations that explicitly imposes the adding-up restriction on reserve shares. The results indicate substantial persistence in reserve holdings and significant cross-currency dependence, supporting a system-wide dynamics of reserve composition. In the country fixed-effects specification (1) issuer economic size, (2) uncertainty, (3) sanctions, (4) trade linkages, and (5) issuer credibility are significantly associated with reserve allocation across currencies. With the inclusion of year fixed effects, the persistence and cross-currency dependence remain, while trade linkages and sanctions emerge as the most important determinants of reserve composition. The results highlight the importance of accounting for the compositional nature and interdependence of reserve shares when examining the determinants of global reserve holdings.","also_at":[],"analysis":null,"authors":["Deborah Gefang","Stephen G. Hall","George S. Tavlas"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"cf5d20906a1ee305","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Reserve-currency composition directly affects FX markets and sovereign policy decisions.","screening_tag":"Transversal","selected_in":[],"source":"bog","source_name":"Bank of Greece","tag":"Transversal","tag_inferred":false,"title":"Dynamics of the currency composition of central bank reserves","url":"https://ideas.repec.org/p/bog/wpaper/369.html"},{"abstract":"Worker effort increases contemporaneous output but may result in injury or burnout. Directing effort away from the workers most exposed to injury would reduce this risk, but information on the exposure is often hidden. We ask whether managers act on such private information, studying the NBA as a data-rich workplace. Instrumenting workload with teammate absence, we find that work causally raises injury risk, which contrasts with the spurious negative correlation commonly found in sports medicine studies. We also show that coaches rest players in response to injury risk shocks. By acting on this private information, coaches can raise player productivity.","also_at":[],"analysis":null,"authors":["Kala Krishna","Sergey Lychagin","Lewis S. McLean"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"ca5f89cfd9c9e1bc","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":0,"screen_reason":"Studies NBA coaching decisions and player injuries, unrelated to macroeconomics or markets.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Injury, Workload, and the Strategic Response of Coaches in the NBA","url":"https://ideas.repec.org/p/nbr/nberwo/35803.html"},{"abstract":"This paper analyses the evolution and drivers of the stock of global imbalances in order to assess associated vulnerabilities and potential adjustment scenarios. These imbalances have recently increased sharply, with a deterioration in the US net international investment position (NIIP) mirrored by NIIP improvements in most other major economies. We decompose these NIIP changes into their proximate drivers for a sample of 28 economies and find that financial factors (including valuation changes and investment income flows) are the primary drivers of global imbalances at both short and long horizons, while trade also plays a significant role (especially at long horizons). Valuation gains on international investment positions have supported economic growth in many countries since 2010, while also increasing their vulnerability to financial market adjustments. To assess the implications and potential risks, we simulate the spillovers through this cobweb of global imbalances from: (i) a sharp dollar depreciation, (ii) a repricing of equity markets, (iii) higher interest rates, and (iv) a halving of trade imbalances. These scenarios highlight the large international spillovers that would be associated with any reduction in global imbalances, the heterogeneous impact of various rebalancing mechanisms on individual countries and the limits of popular proposals for reducing these imbalances. The persistence of global imbalances underscores the importance of building resilience to the large spillovers that can occur through this cobweb of international exposures.","also_at":[],"analysis":null,"authors":["Stefan Avdjiev","Kristin Forbes","Tsvetelina Nenova","Marjorie Santos"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"c93354d6eae14b30","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Analyzes drivers of global imbalances and simulates spillovers from currency, rate and trade shocks.","screening_tag":"Transversal","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"Transversal","tag_inferred":false,"title":"Unraveling the cobweb of global imbalances: drivers, vulnerabilities, and adjustment scenarios","url":"https://ideas.repec.org/p/bis/biswps/1379.html"},{"abstract":"State-dependent local projections (LPs) are widely used to study how causal effects vary as a function of economic states, but shock exogeneity alone does not identify this response function. We show that identification follows when the underlying conditional mean is linear in the shock with a state-dependent coefficient, a condition satisfied in canonical micro-macro environments, including first-order perturbation solutions of heterogeneous-agent and macro-finance models. Even then, standard linear-interaction LPs generally recover only a projection of the response function, motivating LPs with nonparametric state dependence. We develop a sieve estimator and establish pointwise and uniform inference for micro-macro panels, where a distinctive challenge is that the estimator can converge at different rates across the state space. Applied to firm investment, the method uncovers a hump-shaped response to monetary policy shocks and shows that standard linear-interaction LPs substantially understate the aggregate role of financial heterogeneity.","also_at":[],"analysis":null,"authors":["Joel M. David","Raffaella Giacomini","Xiyu Jiao","Weining Wang"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"c80aba139c993a22","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Introduces a new econometric method for state-dependent local projections, showing that standard methods understate the impact of monetary policy shocks on firm investment.","screening_tag":"DM","selected_in":[],"source":"fed-chicago","source_name":"Federal Reserve Bank of Chicago","tag":"DM","tag_inferred":true,"title":"Causal State-Dependent Local Projections","url":"https://ideas.repec.org/p/fip/fedhwp/103968.html"},{"abstract":"Medical guidelines translate clinical evidence into treatment rules, but the evidence may identify treatment benefits more clearly than harms. We study anticoagulation for atrial fibrillation, combining randomized trials with Veterans Health Administration data. Trial evidence reveals substantial heterogeneity in stroke-prevention benefits but does not reliably identify how treatment-induced bleeding harms vary across patients. In the target population, patients with larger predicted stroke benefits also have higher untreated bleeding risk, making this ambiguity consequential. We evaluate existing guidelines and develop maximin and minimax-regret treatment rules robust to alternative harm structures. At a benchmark preventing 50% of preventable strokes, robust rules induce 33-41% fewer bleeds than random treatment and outperform existing guidelines. Finite-sample uncertainty generates noticeable instability in fine patient rankings but little instability in treatment assignments or welfare. Physician performance and the relationship between guideline adherence and skill also depend substantially on assumptions about how treatment-induced bleeding harms vary across patients.","also_at":[],"analysis":null,"authors":["Jason Abaluck","Leila Agha","David C. Chan Jr"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"c66a31611be3b8ce","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":0,"screen_reason":"Focuses on medical guideline design and patient outcomes, no direct macro or market link.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Are Guidelines Worth Following? Decision-Making Under Incomplete Evidence","url":"https://ideas.repec.org/p/nbr/nberwo/35798.html"},{"abstract":"This paper estimates the causal effect of fertility on mothers’ work arrangements, with a particular focus on remote work. Using harmonized individual-level data from the American Community Survey (ACS) for the period 2003--2024, we exploit exogenous variation in fertility generated by the sex composition of the first two children and twin births at the second parity. We find that fertility significantly reduces labor force participation across our sample period, consistent with existing evidence, but its effects on remote work are nuanced. Prior to the COVID-19 pandemic, an additional child increases the likelihood of working remotely. However, these effects turn negative after 2020 when remote work became common. We show that these patterns are not driven by changing selection into teleworkable occupations nor by changes in the observable characteristics of compliers over time. The limited feasibility or attractiveness of remote work for many women, combined with changes in the nature of remote work over time, are more likely explanations. Taken together, these findings suggest that remote work, in its current form, has limited potential to meaningfully reduce child penalties for higher-order births.","also_at":[],"analysis":null,"authors":["Benjamin W. Cowan","Mohamed Hafis Zida"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"c3b747d86a39fc2e","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":3,"screen_reason":"Analyzes US labor-force participation and remote work trends, modest macro relevance but limited market impact.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"The Impact of Fertility on Mothers’ Remote Work","url":"https://ideas.repec.org/p/nbr/nberwo/35763.html"},{"abstract":"We document two key patterns of structural change: premature deindustrialization and rising industry polarization. Using a dynamic open‐economy model with sector‐biased technological change (SBTC), we evaluate the role of trade in these shifts. Trade alone does not cause premature deindustrialization, but its interaction with SBTC—transmitting global technological change, amplifying the decline in manufacturing's relative price over time, and generating manufacturing trade imbalances across countries—deepens premature deindustrialization over time. Industry polarization, by contrast, emerges only through trade‐driven specialization, as countries diverge along lines of comparative advantage.","also_at":[],"analysis":null,"authors":["Michael Sposi","Kei-Mu Yi","Jing Zhang"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"publisher issue page","doi":"10.3982/ecta20428","doi_registered":"2026-09-14","flags":[],"group":"journal","id":"bfdb56350c61538b","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":7,"screen_reason":"Examines trade’s role in deindustrialization and polarization, relevant for emerging-market growth outlooks.","screening_tag":"Transversal","selected_in":[],"source":"econometrica","source_name":"Econometrica","tag":"Transversal","tag_inferred":false,"title":"The Role of Trade in Premature Deindustrialization and Industry Polarization","url":"https://doi.org/10.3982/ecta20428"},{"abstract":"This paper studies the transformation of American life insurance, the largest contractual savings institution in the United States before Social Security. As the market for insurance became national, did control over the savings it collected disperse with it? Using a newly digitized annual firm-by-state panel of premiums and losses covering nearly every U.S. life insurer from 1888 to 1940, I distinguish the geography of collection from the geography of control: where premiums were paid, and where the firms receiving them were domiciled. The industry was remade over these six decades. Real premium income rose more than twentyfold, the number of active insurers grew sixfold, incorporation shifted decisively from the Northeast toward the Midwest and South, and within-state concentration fell by nearly half. Control was rearranged, not dispersed. Chartering domestic insurers raised local retention almost entirely at the extensive margin. Across regions, this closed a large gap, as the Northeast retained nearly eleven times as much of its premium as the South in the 1890s and only twice as much by the 1930s, with nine-tenths of the convergence coming from Southern states acquiring domestic sectors where they had none. The national total held: firms domiciled where premium was raised collected just under a quarter of it in the 1890s and just over a fifth in the 1930s, even as household participation converged steadily across states. Legal permission to operate nationally sufficed to integrate the market in which insurance was sold, but not to disperse control over the investable cash it collected.","also_at":[],"analysis":null,"authors":["Pawel Janas"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"be782393ee08ffd7","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":4,"screen_reason":"Historical US life-insurance geography offers limited direct insight for current markets.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Integration Without Decentralization: The Financial Geography of U.S. Life Insurance, 1880–1940","url":"https://ideas.repec.org/p/nbr/nberwo/35771.html"},{"abstract":"We construct a firm-year panel of income-tax rate reconciliations from annual 10-K filings of public companies to study the effects of the Tax Cuts and Jobs Act (TCJA) on U.S. multinational profit shifting. These reconciliations decompose the gap between company-level effective tax rates and the federal statutory corporate tax rate, allowing us to isolate the contribution of foreign tax advantages before and after the reform. We find that TCJA significantly reduced the tax rate gap and increased effective tax rates for companies most exposed to pre-TCJA international tax benefits. This resulted in an onshoring of profits with foreign profit shares falling 1.3 percentage points per percentage point of tax increase. Among more exposed companies, we find no differential change in investment, employment, or the geographic distribution of sales and installed capital. A neoclassical model of a multinational that chooses where to book its income rationalizes this pattern: the reform raised the average tax on income booked abroad relative to income booked at home, which governs where profits are reported, while the marginal tax on capital, which governs investment, changed by an amount common to all firms. Controlling for deferred-tax windfall gains leaves our main results unchanged.","also_at":[],"analysis":null,"authors":["Anmol Bhandari","Ellen McGrattan"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"bdf846130c1b9676","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Evaluates TCJA’s effect on profit shifting and on-shoring, relevant for corporate tax and investment outlooks.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Foreign Tax Advantages after the U.S. Tax Reform of 2017","url":"https://ideas.repec.org/p/nbr/nberwo/35805.html"},{"abstract":"The question of how oil supply news shocks transmit to real activity, financial conditions and regional labor markets is back at the center of the macroeconomic research agenda. To answer this question, we introduce the Factor Bayesian Additive Regression Tree (FABART) model, a nonlinear factor-augmented vector autoregression model, and apply it to a large U.S. macro-financial dataset with externally identified oil supply news shocks. The framework incorporates a flexible nonparametric measurement equation that allows nonlinear transmission to emerge from the data without imposing a specific functional form on the asymmetry. We find that adverse oil supply news shocks generate stronger and more persistent contractions in real activity than the expansions associated with favorable shocks of comparable magnitude, with especially pronounced differences in industrial production, interest rates and equity prices. Employment responses are highly heterogeneous across U.S. states, with substantially stronger contractions in manufacturing-intensive regions than in energy-producing states. Across shock magnitudes, nonlinearities arise mainly between very small and moderate oil-price movements: small shocks generate weak and imprecisely estimated responses, while even moderate shocks produce economically meaningful effects on industrial production and regional employment. Larger shocks, however, do not systematically generate proportionally stronger responses across variables and shock signs.","also_at":[],"analysis":null,"authors":["Eoghan O'Neill","Sofia Velasco"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"bc78a114f75f9897","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Nonlinear oil shock transmission model reveals asymmetric impacts on US output, rates and equity markets.","screening_tag":"DM","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"DM","tag_inferred":false,"title":"Let the Tree Decide: FABART. A Non-Parametric Factor Model for Nonlinear Oil Shock Transmission","url":"https://ideas.repec.org/p/bde/wpaper/2627.html"},{"abstract":"Firms' hurdle rates exceed their financial cost of capital. This gap varies across firms and has widened in the aggregate. In our Schumpeterian model, two frictions drive this gap: firm decision-makers require an innovator's risk premium for undiversifiable innovation risk, and innovation profits are imperfectly pledgeable. Higher undiversifiable risk lowers the financial cost of capital while hurdle rates remain sticky or even rise. Widening gaps weaken creative destruction; profits and superstar valuations rise despite firms forgoing positive-NPV projects. The calibrated model matches cross-sectional patterns in gaps, R&D, market power and firm dynamics, and explains weak productivity growth and declining dynamism.","also_at":[],"analysis":null,"authors":["Craig A. Chikis","Jonathan Goldberg","David López-Salido"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"b56419aa559c62f4","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Links innovation risk premium to weak productivity and market valuations, indirect market relevance.","screening_tag":"Transversal","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"Transversal","tag_inferred":false,"title":"The Innovator's Risk Premium: Sticky Hurdle Rates, the Cost of Capital, and Creative Destruction","url":"https://ideas.repec.org/p/bde/wpaper/2628e.html"},{"abstract":"Using firm-bank linked data for 10 Asian emerging market economies (EMEs) over 2005–2021, we study the domestic and cross-border implications of zombie firms. We document three main findings. First, the number of zombie firms in emerging Asia has increased significantly over the past 15 years, sustained by evergreening practices from weak banks. Second, zombie prevalence domestically depresses firm performance, crowds out healthy firms, and depresses inflation and GDP growth. Third, the macroeconomic effects of zombie firms extend across borders: expo sure to zombie firms in Asian EMEs significantly reduces inflation and growth in advanced economies. These spillover effects operate mainly through global value chains (GVCs) and an intermediate goods import price channel, while cross-border bank linkages do not play any major role.","also_at":[],"analysis":{"correction":{"checked":"2026-11-03","human_reviewed":true,"made_by":"Claude (AI assistant), on Mustafa Harun Sendur's review","original_tag":"EM","source":"Abstract of the BIS working paper"},"current_prompt":true,"evidence":"the macroeconomic effects of zombie firms extend across borders","flags":[],"in_issue":true,"rationale":"The paper estimates domestic effects in ten Asian emerging economies and, as a main finding, the spillovers to inflation and growth in advanced economies, so it concerns both groups.","relevance_note":"Policymakers and market participants should note that zombie firms in emerging Asia can lower inflation and growth in advanced economies, mainly through global value chains and import prices.","summary":"The paper uses firm-bank linked data from ten Asian emerging markets (2005-2021) to examine zombie firms. It finds zombie numbers have risen, they hurt domestic performance and growth, and exposure to them lowers inflation and growth in advanced economies via global value chains.","takeaways":["Zombie firms in Asian EMEs increased significantly over the past 15 years; weak banks' evergreening, the extending or renewing of loans, helped sustain them.","Domestically, zombie prevalence reduces firm performance, crowds out healthy firms, and lowers inflation and GDP growth.","Exposure to Asian EM zombie firms cuts inflation and growth in advanced economies through GVC and import-price channels.","Cross-border bank linkages play little role in these spillovers."],"wording_correction":{"checked":"2026-11-03","human_reviewed":true,"made_by":"Claude (AI assistant), on Mustafa Harun Sendur's review","reason":"The model wrote that the rise in zombie firms was \"driven by\" weak banks' evergreening; the abstract says it was \"sustained by\" it. Its \"Why it matters\" spoke of global inflation and growth, but the study estimates the effects on advanced economies.","source":"Abstract of the BIS working paper"}},"authors":["Boris Hofmann","Xiaoxi Liu","Ilhyock Shim"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"ad823fb7d89a87a8","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Shows zombie firms in Asian EMEs depress growth and spill over to advanced economies via GVCs.","screening_tag":"EM","selected_in":["2026-09"],"source":"bis","source_name":"BIS Working Papers","tag":"Transversal","tag_inferred":false,"title":"Zombie firms in emerging Asia: domestic and cross border implications","url":"https://ideas.repec.org/p/bis/biswps/1375.html"},{"abstract":"How much liability should AI providers bear when their services enable both attack and defence? Liability can improve welfare while increasing harm. Providers sell a common input to productive users, attackers and defenders. Within a defended contest, a higher common price reduces effort without changing attack success or attacker profits, saving resources and improving the target's security payoff. Compensation weakens defence and raises attacker profits. Optimal liability balances these effects against productive exclusion. Greater competition can lower optimal liability; every such decline must end at an outcome retaining defence. With cybersecurity access fixed, monopoly can warrant partial liability but never full liability when provision is worthwhile. When guardrails preserving productive uses are available, strong competition favours universal guarding socially but encourages unilateral removal at insufficient liability. At a fixed provider count, sufficiently many productive users ensure a pure equilibrium with universal guarding under high liability. A universal-guarding requirement makes liability redundant. Under monopoly, adoption follows a unique liability threshold, while zero liability remains uniquely optimal for a range of parameters with sufficiently many productive users.","also_at":[],"analysis":null,"authors":["Joshua S. Gans"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"a7f8d24f5d4962c0","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":4,"screen_reason":"Discusses AI liability and pricing, relevant to tech regulation but limited macro scope.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Liability and Pricing of Dual-Use AI","url":"https://ideas.repec.org/p/nbr/nberwo/35828.html"},{"abstract":"This paper uses the history of private money to assess the conditions under which stablecoins could function safely at scale and what their growth may imply for U.S. monetary power. Historical systems of private money in the United Kingdom, the United States, Canada, Sweden, and Switzerland show that par circulation depended on institutional arrangements rather than payment technology. Drawing on the monetary history of private money, convertibility, and international currencies, the paper identifies five foundations for scalable private money: credible convertibility, high-quality and transparent backing, a uniform regulatory perimeter, par clearing infrastructure, and credible crisis management and loss allocation. Stablecoins may improve settlement speed, programmability, and cross-border access, but they do not remove these requirements. Applying this framework to contemporary stablecoins and the GENIUS Act, the paper finds that the Act addresses several of these foundations more fully than others, with crisis management and cross-border coordination less fully developed. Dollar stablecoins could extend the reach of dollar settlement, but historical experience reviewed here suggests that whether this strengthens the dollar system depends both on the institutional framework supporting stablecoins and on the deeper foundations of U.S. monetary dominance: confidence in U.S. institutions, fiscal capacity, monetary credibility, and the rule of law.","also_at":[],"analysis":null,"authors":["Michael D. Bordo","Carolyn Wilkins"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"a6fe509b1083476b","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Links stablecoin design to U.S. dollar dominance, offering macro-policy and market implications.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Money and Power: Historical Lessons for Stablecoins and U.S. Dollar Dominance","url":"https://ideas.repec.org/p/nbr/nberwo/35768.html"},{"abstract":"What ignited humanity’s momentous ascent from millennia of stagnation to an era of sustained economic growth? And what are the roots of the vast disparities in the wealth of nations? These enduring mysteries, which have preoccupied scholars across generations, lie at the core of Unified Growth Theory. This encompassing framework captures the evolution of societies over the entire course of human history and identifies the universal wheels of change that governed humanity’s long journey, propelled the growth process, and shaped inequality across the globe. The theory uncovers the forces underlying the dramatic transformation in living standards over the past two centuries, emerging from an economic ice age of near stagnation, while highlighting the enduring historical roots of the immense divergence in the prosperity of nations. It suggests that forces set in motion in the distant past played a pivotal role in shaping development across the globe and remain essential for the design of effective policies that foster economic progress and mitigate inequality in the wealth of nations.","also_at":[],"analysis":null,"authors":["Oded Galor"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"a4fcee8314af7ad5","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":3,"screen_reason":"Broad growth theory across history, tangential to current macro policy.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"The Wealth of Nations: Origins of Prosperity and Seeds of Inequality","url":"https://ideas.repec.org/p/nbr/nberwo/35799.html"},{"abstract":"We study the value of informal care from a spouse and how access to such care shapes optimal insurance coverage for long-term care. Using Medicare claims and a novel spousal crosswalk, we examine how the sudden incapacitation of a spouse affects their partner's use of formal care. A spouse's health shock increases their partner's probability of a nursing-home stay by 30%. We document significant negative health effects for the partner, but provide evidence that their increase in nursing-home stays is largely driven by substitution from informal care to formal care. When their partners are incapacitated, Medicare recipients become less sensitive to the price of formal care, consistent with a higher valuation of that care and reduced moral hazard. We develop a framework to interpret these findings. The framework translates differences in the level and price elasticity of demand for formal care into a lower-bound estimate of the value of informal care provided by a spouse. It also suggests that optimal insurance for long-term care should be designed at the household level with more generous coverage for those who do not have access to informal care.","also_at":[],"analysis":null,"authors":["Itzik Fadlon","Tal Gross","Alex Hoagland","Timothy Layton"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"9e73d564348e476b","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Analyzes informal spousal care's impact on Medicare long-term care demand, informing health-insurance policy.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"The Protective Effects of a Healthy Spouse: Medicare as the Family Member of Last Resort","url":"https://ideas.repec.org/p/nbr/nberwo/35784.html"},{"abstract":"What caused the historically unique volatility in American homicides since 2019, driven by gun homicides? While there is no shortage of candidate explanations, a coherent understanding has been elusive because of the widely held view that gun violence, like other crimes, stems from a rational weighing of benefits and costs as in Becker (1968). This model does a generally poor job of explaining recent trends in homicide. Behavioral economics helps explain what the Becker model cannot. This view starts with the fact that most shootings don’t further some larger goal like robbery or gang wars over drug turf (“instrumental violence”); they’re arguments settled with guns (“expressive violence”). Why do arguments start or escalate? The behavioral model points to automatic cognition that is fast, effortless but sometimes prone to error. The pandemic increased automaticity by increasing distress – a cognitive “bandwidth tax.” Recent homicide trends, driven by changes in expressive violence, are mirrored by similar trends for deaths from drug overdose, car crashes, and suicide (especially for Black Americans, the group most affected by violence) – “deaths of decision-making.” Also relevant is a large rise and fall in gun carrying, which might partially stem from Becker-like mechanisms: Large changes in handgun sales and police stops, both of which may also have been affected by the killing of George Floyd. Since American gun violence is mostly arguments with guns, no wonder homicide trends are due mostly to changes in the number of arguments and the odds a given argument had a gun present.","also_at":[],"analysis":null,"authors":["Jens Ludwig"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"9c54baa7ea0742f2","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":2,"screen_reason":"Focuses on US homicide trends, little connection to macro-financial markets.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Crime in Covid Times","url":"https://ideas.repec.org/p/nbr/nberwo/35827.html"},{"abstract":"As of 2026, humanity is likely below replacement fertility. That has never happened before, not in wars or pandemics. But the real surprise is that the fall has been concentrated in low- and middle-income countries and among poorer and less educated women. We fit a single-factor model to 236 countries since 1950: the common component peaked in 1978, and what drives fertility down today are country-specific trends, 219 of them negative and not one leveling off. None of the commonly cited mechanisms can account for this pattern, so we offer a conjecture: modernity itself, which makes a third child expensive and childlessness cheap. Children come in integers, so it takes very little to move a cohort’s fertility rate from 1.8 to 1.3. And nothing in an economy pushes fertility back to 2.1. We close with the main economic consequences, in particular slow growth.","also_at":[],"analysis":null,"authors":["Jesús Fernández-Villaverde","Patrick Norrick"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"9bfaf62bf78b8b91","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":5,"screen_reason":"Presents a global fertility slowdown with emphasis on low-income countries, affecting growth outlooks.","screening_tag":"EM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":true,"title":"Terra Incognita: The Economics of a Shrinking World","url":"https://ideas.repec.org/p/nbr/nberwo/35809.html"},{"abstract":"Recent advances have substantially improved our ability to predict disease risk with genetic data. In response, many countries have banned insurers from using genetic data, despite concerns about adverse selection. This paper measures adverse selection in a market where insurers can underwrite only on nongenetic information while consumers also have access to genetic information. We do so by combining methods from quantitative genetics, selection measures from economic theory, and genetic and electronic health record data on nearly 500,000 individuals in the UK Biobank. We focus on the critical illness insurance market and consider scenarios in which consumers have access to current or expected future genetic prediction technology. We find noticeable levels of selection with current prediction technology, and potentially crippling selection with expected future technology.","also_at":[],"analysis":null,"authors":["Eduardo Azevedo","Jonathan P. Beauchamp","Richard Karlsson Linnér"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"publisher issue page","doi":"10.3982/ecta24284","doi_registered":"2026-09-14","flags":[],"group":"journal","id":"959ccff743c4bc0c","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":3,"screen_reason":"Genetic data and insurance adverse selection, limited macro or market implications.","screening_tag":"DM","selected_in":[],"source":"econometrica","source_name":"Econometrica","tag":"DM","tag_inferred":false,"title":"Genetic Prediction and Adverse Selection","url":"https://doi.org/10.3982/ecta24284"},{"abstract":"Fixed costs account for an increasing share of operating expenses in the U.S. banking system. From 1995 to 2026, estimated fixed costs rose from 37 percent to 62 percent as a share of total noninterest expense. Over the same period, estimated marginal and average operating costs declined, loan spreads and net interest margins fell, and estimated loan markups increased by 21 percentage points. These trends are pervasive across banks but are most pronounced among large banks. We develop a model of bank industry dynamics with endogenous fixed costs to rationalize these long-run trends and examine pro-competitive effects. While competition increases credit supply, it decreases lending efficiency and increases bank risk-taking.","also_at":[],"analysis":null,"authors":["Thomas Désiré","Jordan Pandolfo"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"90cd49f76a1272af","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Documents rising fixed costs in US banks and implications for competition and risk-taking.","screening_tag":"DM","selected_in":[],"source":"fed-kansas-city","source_name":"Federal Reserve Bank of Kansas City","tag":"DM","tag_inferred":false,"title":"Fixed Costs in the U.S. Banking System","url":"https://ideas.repec.org/p/fip/fedkrw/103727.html"},{"abstract":"Why is there so much wage inequality within occupations? Why has the overall level of within-occupation wage inequality risen? Why is the rise concentrated in cognitive-intensive occupations, while inequality has fallen in manual-intensive ones? To answer these questions we develop a general equilibrium model with heterogeneous workers who supply multiple skills jointly, as an indivisible bundle. This bundling friction allows a given skill to be priced differently in different occupations. We find in US data that differences in skill prices, not worker composition, explain why within-occupation inequality is higher in more cognitively intensive occupations and account for about a third of the rise in within-occupation inequality from 1980 to 2010. We show that a uniform increase in the productivity of cognitive skill can drive inequality up in cognitive-intensive occupations and down in manual ones, just as in the data.","also_at":[],"analysis":null,"authors":["Chris Edmond","Simon Mongey"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"8fa371e318b95c77","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":4,"screen_reason":"Examines US wage inequality drivers, modest relevance for labor-market policy.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Unbundling Labor","url":"https://ideas.repec.org/p/nbr/nberwo/35783.html"},{"abstract":"Large financial intermediaries are more stable than small ones, and the largest are also the most geographically diversified. Whether that breadth is a source of stability or a byproduct of scale is difficult to establish, since intermediaries diversify by growing large. I examine how the diversified intermediary is assembled, using a newly digitized firm-by-state panel of the near-universe of U.S. life insurers from 1888 to 1940, the largest nonbank institutional investors of the period. Over these decades, the number of insurers per state more than quadrupled and within-state concentration declined by half, yet a small number of geographically extensive insurers retained a stable share of national premiums. I decompose firm-level outcomes into the insurer’s underwriting level and the composition of its book. Insurers entered new states before attaining scale, each entry constituting a small and favorably selected position with the convex payoff of a real option. The most successful decile of entries generated half of a cohort’s premium. Expansion was costly on two margins: a broad insurer earned less per dollar of coverage and paid 15.1 percent more in claims than an equally large insurer writing in the same state and year. The pricing cost is attributable to the composition of a broad insurer’s book, the claims cost to the insurer itself. A comparison across firms understates the claims cost, since the markets a broad insurer adds exhibit favorable claims experience of their own. Stability, by contrast, is attributable to scale, since breadth’s advantages in volatility and survival vanish conditional on size. Risk pooling was bounded: approximately nine tenths of an insurer’s loss-ratio variance was common to its markets. Diversification was the product of costly expansion, and the stability attributed to it is the scale that expansion produced.","also_at":[],"analysis":null,"authors":["Pawel Janas"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"8eee50d0d3961fc9","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":3,"screen_reason":"Historical US insurer diversification offers limited insight for current market dynamics.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Diversification as a Process: Geographic Expansion and the Formation of National Insurers","url":"https://ideas.repec.org/p/nbr/nberwo/35769.html"},{"abstract":"China's rise as a major lender to emerging economies since the early 2000s has introduced a unique form of lender power: borrowers cannot default on the subsidized loans they receive, but may still face sudden rollover demands outside their control. We argue this distinctive structure—bilateral rollover risk without default risk—disciplines recipient countries' borrowing on international markets. In a quantitative long-term sovereign debt model, we show that such rollover-prone nondefaultable Chinese loans expose market debt to dilution risk: governments may need to tap international lenders when repayment to China comes due, and therefore choose to deleverage from private markets when Chinese inflows arrive. Market debt and bond yield dynamics in the data are consistent with this “disciplining effect.” We then use the model to study two geopolitical scenarios: a bloc-formation exercise in which China offers take-it-or-leave-it loans to induce the borrower's exit from international debt markets, and an optimal exposure-to-China problem under the risk of a permanent and sudden retrenchment of Chinese funding. Together, these results show how official finance à la China can simultaneously improve market borrowing conditions and become a new destabilizing force to the global sovereign debt architecture as geopolitical alliances shift.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"China's rise as a major lender to emerging economies","flags":[],"in_issue":true,"rationale":"The abstract discusses China lending to emerging economies and its impact on those borrowers.","relevance_note":"Understanding how China-funded sovereign debt influences market borrowing and yields helps policymakers assess financial stability risks in emerging markets.","summary":"The paper builds a quantitative sovereign debt model in which borrowers cannot default on China's subsidized loans to emerging economies but may face sudden rollover demands. It argues that this structure disciplines borrowing: governments may choose to deleverage from private markets when Chinese inflows arrive. It also studies a scenario in which China offers loans to induce a borrower's exit from international debt markets and one in which Chinese funding is suddenly withdrawn.","takeaways":["In the model, borrowers cannot default on the Chinese loans but may face sudden rollover demands, and the authors argue that this bilateral rollover risk without default risk disciplines recipient countries' borrowing on international markets.","In the model, rollover-prone Chinese loans expose market debt to dilution risk, and governments may choose to deleverage from private markets when Chinese inflows arrive.","Market debt and bond yield dynamics in the data are consistent with this disciplining effect.","The paper studies two scenarios, a bloc-formation exercise in which China offers loans to induce exit from international debt markets and an optimal exposure problem under a sudden retrenchment of Chinese funding."],"wording_correction":{"checked":"2026-11-03","human_reviewed":true,"made_by":"Claude (AI assistant)","reason":"The model said the loans \"force\" governments to reduce private-market borrowing, where the abstract says governments may choose to; it turned \"dynamics in the data are consistent with this effect\" into \"model matches observed dynamics\", and presented the two scenarios as results (\"China can induce exit\"). The no-default feature of the loans is now stated as the model's assumption.","source":"Abstract of the NBER working paper"}},"authors":["Illenin O. Kondo","César Sosa-Padilla","Zachary J. Swaziek"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"8d59c0126b810875","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Explores China-driven lender power and its effect on emerging-market sovereign debt markets.","screening_tag":"EM","selected_in":["2026-09"],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":false,"title":"Borrowing in the Shadow of China","url":"https://ideas.repec.org/p/nbr/nberwo/35767.html"},{"abstract":"This paper documents large indirect mortality impacts of climate change. Exploiting natural global temperature variability, we find that 1°C of warming increases annual mortality by 2.5 deaths per 1,000 individuals, compared to 0.1 deaths per 1,000 due to the associated local heat exposure. Using external estimates of the impact of global income on mortality, we show that the macroeconomic effects of global temperature changes explain two thirds of the gap between these estimates. We use this evidence to estimate damage functions in a neoclassical growth model that links mortality and economic activity and accounts for adaptation to mortality impacts. Mortality contributes $400 per ton of CO₂ to the Social Cost of Carbon, or one quarter of total climate damages. These results suggest that economic adaptation has a double dividend by also reducing climate-related mortality.","also_at":[],"analysis":null,"authors":["Adrien Bilal","Diego R. Känzig","Krzysztof Lisiecki"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"8a9927995eb6e235","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":5,"screen_reason":"Links climate-induced mortality to macro-damage functions, indirect relevance for long-run growth forecasts.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Global Temperature and Global Mortality","url":"https://ideas.repec.org/p/nbr/nberwo/35832.html"},{"abstract":"Time fixed effects are not a general-equilibrium control. In network economies, aggregate shocks do not enter firm outcomes uniformly: they propagate through equilibrium prices, costs, and demand, leaving a residual network gradient after time demeaning. When an instrument, treatment, or exposure design even partially aligns with this gradient, standard panel estimators recover the direct effect plus an endogenous network-leakage component. We develop a tractable framework that signs and quantifies this Network-SUTVA bias in closed form, showing how network topology governs its magnitude. Weak instruments magnify the leakage. Difference-in-differences designs are similarly contaminated because controls can be untreated by assignment but treated in equilibrium. Calibrated to the U.S. production network, the distortion can exceed 130% of the true direct effect. We propose observed- and hidden-network diagnostics and remedies, and test them on canonical difference-in-differences designs, showing that standard estimators can confound direct policy responses with systemic network leakage.","also_at":[],"analysis":null,"authors":["Bernard Herskovic","Gill Segal"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"898bf025dadfaa51","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":1,"screen_reason":"Methodological paper on network bias in panel estimators, little direct market impact.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Network General Equilibrium as a Threat to Identification: The Failure of Time Fixed Effects","url":"https://ideas.repec.org/p/nbr/nberwo/35807.html"},{"abstract":"We discuss how immigration affects identity, with implications for politics. We build on key insights from social psychology and their formalization in economics to derive predictions about how immigration changes both self-identification and categorization of others into groups. These immigration-induced identity changes can explain two recent political transformations that have characterized many Western democracies: the rise of right-wing populism and the realignment of voters and parties along a socio-cultural, rather than economic, dimension of political conflict. We also discuss how immigration can reshape group boundaries and political cleavages, depending on the characteristics of immigrants, host populations, and the local context. We highlight open questions and possible directions for future research.","also_at":[],"analysis":null,"authors":["Vasiliki Fouka","Marco Tabellini"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"8973fcbcfbaf393d","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":2,"screen_reason":"Examines immigration-identity links and political outcomes, minimal macroeconomic relevance.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Migration, Identity and Political Economy in a Globalizing World","url":"https://ideas.repec.org/p/nbr/nberwo/35777.html"},{"abstract":"We show that the dollar remains dominant in most aspects of global finance. The euro and renminbi are competing in an increasingly fragmented second tier of currencies, leaving no clear rivals to the dollar. We study how financial innovation could reshape the international monetary system. In principle, innovation levels the playing field between countries, for instance by reducing the need for vehicle currencies to intermediate transactions between other currency pairs and by making it easier to acquire and trade foreign assets. We show that an alternative outcome is more likely. Innovations that reduce frictions in cross-border transactions, especially dollar-backed payment stablecoins and other forms of tokenization of money, could interact with relative market thickness to reinforce the dollar’s dominance. This outcome is not preordained but depends on other countries’ willingness to embrace innovations and strengthen their financial markets and regulatory frameworks. While unipolarity has many disadvantages, we show that in some circumstances multipolarity might result in greater global fragility at times of financial market stress.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"the dollar remains dominant in most aspects of global finance","flags":[],"in_issue":false,"rationale":"The abstract mentions the dollar, euro, and renminbi, spanning both advanced and emerging economies.","relevance_note":"Policymakers and market participants should note that new payment technologies may entrench existing currency hierarchies, affecting currency risk and cross-border financing conditions.","summary":"The paper examines how financial innovation may affect the international monetary system, finding that innovations like dollar-backed stablecoins are likely to reinforce the dollar’s dominance rather than create a more balanced currency landscape.","takeaways":["Innovation that lowers cross-border frictions can increase the dollar’s market thickness.","Dollar-backed stablecoins may strengthen the dollar’s role as a vehicle currency.","Multipolar currency arrangements could raise global financial fragility during stress."],"wording_correction":null},"authors":["Gordon Y. Liao","Eswar S. Prasad","Tony Zhang"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"8336c3e084e49354","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Analyzes how fintech innovations could reshape global currency dominance, crucial for market participants.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Financial Innovation and the International Monetary System","url":"https://ideas.repec.org/p/nbr/nberwo/35822.html"},{"abstract":"This paper develops a 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, prices respond to slack instead of marginal costs. The resulting Phillips curve has three properties that match recent US evidence. First, it delivers the divine coincidence: inflation is on target whenever unemployment is at its efficient level—the full-employment rate of unemployment (FERU), the geometric mean of the unemployment and vacancy rates. Second, it is decreasing and convex in the unemployment-inflation plane: inflation responds more strongly to unemployment when the labor market is inefficiently tight than when it is inefficiently slack. The convexity is inherited from the Beveridge curve, which makes unemployment a decreasing and convex function of tightness. Third, shifts of the Beveridge curve move the FERU and therefore shift the unemployment-inflation Phillips curve. The model also implies that the Fed's dual mandate is internally consistent, that a soft landing from an inefficiently tight labor market is possible, and that the zero lower bound is not topsy-turvy.","also_at":[],"analysis":null,"authors":["Pascal Michaillat","Emmanuel Saez"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"81330aeeb4111152","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"US-focused Phillips-curve model directly informs monetary-policy outlook.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Beveridgean Phillips Curve","url":"https://ideas.repec.org/p/nbr/nberwo/35804.html"},{"abstract":"We measure how artificial intelligence (AI) affects the economy through its impact on software engineering productivity. We use information from financial markets to develop a forward-looking measure that is available in real time. We estimate the sensitivity of each firm’s stock return to an AI stock market index, and how this sensitivity depends on the share of firm payroll in software engineering. We use a model to map this cross-sectional relationship into software engineering productivity gains. From November 2022 to December 2025, AI increased the market’s expected present value of software engineering productivity by the equivalent of a permanent 32.6% productivity increase. The corresponding effect on the level of GDP is 3.6% in the baseline and 6.5% when higher software engineering productivity also raises R&D productivity. By mid-2026, amid rapid progress in coding agents, the effect of AI on productivity and GDP had more than doubled relative to the end of 2025.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"From November 2022 to December 2025, AI increased the market’s expected present value of software engineering productivity by the equivalent of a permanent 32.6% productivity increase.","flags":[],"in_issue":false,"rationale":"The abstract mentions no specific economy or region, only global productivity and GDP effects.","relevance_note":"Understanding AI’s contribution to productivity helps policymakers gauge potential growth and inflation pressures, while investors can assess sectoral exposure to AI-driven gains.","summary":"The paper builds a real-time AI stock market index and measures firms' stock return sensitivity to it, linking that to software-engineering payroll shares. It finds AI raised expected software-engineering productivity by a permanent 32.6%, implying a 3.6% baseline GDP boost (up to 6.5% with R&D spillovers) by end-2025, and the impact more than doubled by mid-2026.","takeaways":["AI’s effect on software-engineering productivity is estimated at a permanent 32.6% increase.","Baseline GDP impact is 3.6%, rising to 6.5% when R&D productivity also improves.","By mid-2026 the productivity and GDP effects had more than doubled relative to end-2025."],"wording_correction":null},"authors":["Alex Blumenfeld","Jonathon Hazell","Chen Lian","Andreas Schaab"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7f926c704e29b1f7","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Estimates AI-driven software productivity gains and sizable GDP effects, directly informing macro outlook.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"The Macroeconomic Effect of AI: Sizing the Software Engineering Channel","url":"https://ideas.repec.org/p/nbr/nberwo/35793.html"},{"abstract":"This study examines a housing program that created affordable infill developments on formerly vacant, abandoned, or disinvested properties in Savannah, Georgia. Savannah is a major economic hub anchored by the Port of Savannah, where many urban neighborhoods remain impacted by disinvestment and climate risk. Using two decades of record-linked property and tax data, this study quantifies local economic spillovers from this public intervention, revealing previously hidden social and economic benefits of infill housing policies. These benefits include an 11% increase in the market value of properties immediately neighboring an infill development site and an increase of up to 35% in areas with a high density of infill activity, pointing to block-level revitalization in climate-disadvantaged and distressed areas.","also_at":[],"analysis":null,"authors":["Edward W. Chen","Reagan L. Lengefeld","Omar Isaac Asensio"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7f195a804eeade27","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":3,"screen_reason":"Quantifies local property value spillovers from infill housing, modest macro relevance.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"The Positive Spillovers to Risky Investments in Vacant, Abandoned, and Disinvested Properties","url":"https://ideas.repec.org/p/nbr/nberwo/35825.html"},{"abstract":"This paper presents early results from the RESET Demonstration Project, an initiative that constructs price and sales indices using item-level transactions data. The project’s overarching goal is to demonstrate the feasibility and advantages of leveraging modern transactions data for economic measurement by pointing toward a future in which official economic statistics are rebuilt on 21st-century data and technology. The paper introduces new inflation measures for Food at Home and evaluates them on two fronts: how they compare to current official statistics and what they offer as novel measures that capture more accurately the dynamics of consumer choice. The paper also addresses the challenges of producing reliable and credible official statistics from item-level transactions data and reports findings on recent Food at Home inflation trends.","also_at":[],"analysis":null,"authors":["Steve Coffey","Gabriel Ehrlich","John C. Haltiwanger","Ron S. Jarmin","David Johnson","Tod Johnson","Matthew D. Shapiro"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7ef9384f40cc3d85","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Presents new food-at-home inflation measures using transaction data, directly relevant to price monitoring.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Early Results from the RESET Demonstration Project: Inflation in Food at Home","url":"https://ideas.repec.org/p/nbr/nberwo/35817.html"},{"abstract":"This paper studies whether and how distressed regions can recover from industrial decline. We exploit differences in access to an increasingly thriving Luxembourg labor market for neighboring residents of the French “Rust Belt.” We document a three-phase expansion of treated local labor markets, driven by an initial workplace substitution of incumbent residents towards cross-border job opportunities, a medium-term rise in local labor force utilization, and a long-run sustained increase in population via net domestic in-migration. A broader process of local revitalization follows, with higher incomes, reduced reliance on transfers, and resilience to social dislocation, although it is partially offset by rising housing costs and unequal congestion. This leads to a net decrease in far-right and anti- EU vote shares, muting the rise of populism visible elsewhere in former industrial regions of France. Our findings suggest that former industrial regions are not inherently rigid nor doomed to fall to anti-globalization backlash, but can and do adjust – given sufficiently large-scale reversals in local labor demand.","also_at":[],"analysis":null,"authors":["Antoine B. Levy","Mathilde Muñoz"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"7eca414127478114","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":4,"screen_reason":"Studies cross-border labor effects on a French distressed region, limited macro impact.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Foreign Opportunity and Regional Revival: Evidence from the French Rust Belt","url":"https://ideas.repec.org/p/nbr/nberwo/35814.html"},{"abstract":"Two characteristics of recent empirical studies on purchasing power parity (PPP) are that they have (1) examined whether PPP holds for individual countries and (2) investigated separately the respective roles of price adjustment and nominal exchange rate adjustment in bringing about PPP, with the magnitude of price adjustment estimated under fixed exchange rate regimes, and the magnitude of nominal exchange rate adjustment estimated under floating rates. We develop an extension of the Johansen reduced rank regression procedure, which we apply in a panel context. This extension allows us to both test the PPP hypothesis and to estimate the adjustment coefficients in a full panel more efficiently than in previous studies which use single-country data. We also extend the PPP model to allow differences between floating and fixed exchange rate regimes to test whether the adjustment process is different in the two regimes.","also_at":[],"analysis":null,"authors":["Harris Dellas","Stephen G. Hall","George S. Tavlas"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"761e6b023ef8d062","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":4,"screen_reason":"Develops an econometric extension for testing purchasing power parity in a panel setting, which is a standard but narrow academic exercise in international macroeconomics.","screening_tag":"Transversal","selected_in":[],"source":"bog","source_name":"Bank of Greece","tag":"Transversal","tag_inferred":false,"title":"On the transmission of purchasing power parity in a group setting","url":"https://ideas.repec.org/p/bog/wpaper/368.html"},{"abstract":"We study how politics shapes industrial policy through two paradigmatic twentieth-century cases: the Cassa per il Mezzogiorno in Italy (1950–1984) and Kennedy's Moonshot in the United States (1961–1972). Drawing on historical and primary political sources, we show that each policy originated in a broader political project rather than in an economic diagnosis: the Christian Democrats' pursuit of national integration and democratic consolidation, and Kennedy's New Frontier. We introduce the concept of industrial policy vision - a publicly articulated, transformational objective that political leaders attach to a set of ideals and pursue through state-led intervention in the economy - and develop a five-component definition that makes it empirically tractable. We then trace each vision through decades of newspaper coverage, combining topic modeling and sentiment analysis with systematic close reading. In both cases, public debate proceeded largely within the frame the vision set, granting the policies tolerance for setbacks and expense. The cases diverge in their fates: the Moonshot's bounded vision was redeemed on schedule, while the Cassa's open-ended vision was exhausted by accumulated failure and the policy outlived it only briefly. This divergence points to our central conclusion: while a vision holds, it sets the terms on which an industrial policy's performance is judged, including what counts as failure and how much time the policy is given to deliver.","also_at":[],"analysis":null,"authors":["Lottie Field","Réka Juhász","Michele Zampa"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"65509c042d720fca","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":5,"screen_reason":"Analyzes historical industrial policy cases, offering indirect insights for policy design.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"The Political Foundations of Industrial Policy: Emergence, Endurance, and Exhaustion","url":"https://ideas.repec.org/p/nbr/nberwo/35802.html"},{"abstract":"A large literature examines the economic and health returns to college education. We extend this literature by studying the upward intergenerational effects of children’s education on parental mortality. We exploit Korea’s 1993 Higher Education Reform, which we estimate raised college completion by 13 percentage points among eldest children in the 1974–1983 birth cohorts relative to the prior 10-year cohort. Using data from the Korean Longitudinal Study of Aging, reduced-form estimates indicate a 27% (s.e.=10%) reduction in mortality among parents whose oldest child was in the reform-affected cohort. Because the reform affected college completion but not other education levels or quality, we use it as an instrumental variable (IV) for child college completion. IV estimates indicate a 20% (s.e.=7%) reduction in parental mortality for children induced to complete college by the reform. These parents received greater financial support and contact from their children and had lower smoking and higher physical activity, although these mechanisms explain only a small share of the mortality benefit. Effects were larger for parents of daughters in reduced-form analyses, although IV estimates did not differ significantly by child gender. Future research should further investigate the mechanisms through which children’s college education affects parental mortality.","also_at":[],"analysis":null,"authors":["Ah-Reum Lee","William H. Dow","Jacqueline M. Torres"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":["tag corrected from EM: tagged EM but the text names only advanced economies (Korea)"],"group":"research-network","id":"644bfb8c36873285","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":2,"screen_reason":"Studies Korean education's health spillovers, limited macro or market implications.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Impact of Adults’ College Completion on their Parents’ Mortality: Evidence from the 1993 Korean Higher Education Reform","url":"https://ideas.repec.org/p/nbr/nberwo/35792.html"},{"abstract":"Should a jurisdiction seeking to cut greenhouse gas emissions use demand-side climate policies that target fossil fuel consumption? Or should it introduce supply-side policies that target extraction? My analysis points to a policy portfolio rather than an either/or choice. ``Leakage'' of emissions to unregulated jurisdictions can be mitigated by combining standard demand-side carbon emissions pricing with supply-side pricing of carbon extraction. Emissions pricing drives leakage by lowering fossil fuel prices abroad; extraction pricing counteracts this effect. Supply-side climate policies in practice, however, do not broadly price extraction but instead narrowly foreclose investments in fossil fuel infrastructure and are thus inefficient. To reduce carbon demand, an alternative to emissions pricing is support for clean energy. I emphasize reforms to transmission planning and utility governance as crucial for unlocking clean energy resources' potential, and I highlight the case for publicly supporting clean energy R&D, including green industrial policy, to reduce carbon emissions not just at home but also abroad. I close by discussing distributional consequences. Domestically, carbon pricing and clean energy subsidies have sharply different distributional profiles. Globally, carbon extraction pricing would harm low-income countries that are also fossil fuel importers, though there also exist low-income fossil fuel exporters that would benefit.","also_at":[],"analysis":null,"authors":["Ryan Kellogg"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"62e7b42b812e3120","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Analyzes demand-side and supply-side climate policies and leakage, pertinent to climate-policy design.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Economics of Demand-Side and Supply-Side Climate Policies","url":"https://ideas.repec.org/p/nbr/nberwo/35830.html"},{"abstract":"Central banks monitor macroeconomic risk through two traditions: scenario analysis, regularly used since the mid-1990s, and distributional forecasting, practiced since the late 1960s. The two are complementary but separate: scenarios provide narratives without probabilities, while predictive distributions provide probabilities with limited economic interpretation. Treating baseline forecasts and scenarios as conditional predictive densities, and distributional forecasts as reference predictive distributions, places both within a common framework and clarifies their roles. The Scenario Synthesis assigns weights to scenarios consistent with the reference distribution, offering a practical and reproducible tool for risk assessment and policy deliberation under deep uncertainty.","also_at":[],"analysis":null,"authors":["Tobias Adrian","Domenico Giannone","Matteo Luciani","Mike West"],"date":"2026-09-01","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"6001cc4438774200","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Proposes a practical framework for central banks to synthesize scenarios and distributional forecasts, directly relevant to monetary policy communication and risk assessment.","screening_tag":"Transversal","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"Transversal","tag_inferred":false,"title":"Risks and Uncertainty in Monetary Policy","url":"https://www.federalreserve.gov/econres/feds/risks-and-uncertainty-in-monetary-policy.htm"},{"abstract":"We study how revenue productivity (TFPR) and markups evolve after mergers across the economy. In financial-statement data, targets cease to exist as reporting entities after a deal, so tracking the merged firm requires constructing the combined acquirer-target unit before the merger. We formalize the biases that arise without this correction and implement it across 3,759 horizontal mergers in Spain between 1997 and 2022. Revenue productivity rises by approximately 4% within eight years and markups by approximately 5% to 6%. The breakdown by industry reveals that revenue productivity gains are broad-based, while markup increases are concentrated. Most industries show modest markup effects of 3% or less, with the largest increases occurring in two industries accounting for a small share of deals, led by human health activities. We find that without the boundary correction, both estimated effects reverse sign. The results suggest that mergers tend to raise the revenue productivity of the combined firm across the board, consistent with operational improvements, while large markup increases are a feature of specific industries rather than a general consequence of consolidation.","also_at":[],"analysis":null,"authors":["Jacob T. Hess","Xufeng Wang"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"5c4c15fa14a1b4b4","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Analyzes the impact of mergers on productivity and markups, providing empirical evidence on corporate consolidation effects using Spanish firm-level data.","screening_tag":"DM","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"DM","tag_inferred":false,"title":"Measuring Merger Effects with Revenue Data","url":"https://ideas.repec.org/p/bde/wpaper/2631e.html"},{"abstract":"Standard macroeconomic theories assume that representative or heterogeneous agents share a common model of how the economy operates. Yet evidence shows that households hold heterogeneous subjective models---distinct beliefs about how macroeconomic variables interact. As a result, identical shocks or policies may elicit different responses from otherwise similar households. We test this hypothesis by measuring subjective models and investigating their role in the transmission of monetary policy to consumption embedding randomized controlled experiment in a large-scale, multi-country survey. Consumers who believe that monetary tightening primarily operates through its effects on borrowing or savings rates plan to reduce consumption more in response to randomly assigned rate increase scenarios. By contrast, those who think about inflation or general equilibrium effects adjust consumption less. These differences are not explained by demographics, financial characteristics, including mortgage holdings and mortgage type, or country-level factors. Households' actual consumption responses to endogenous policy-rate changes exhibit broadly similar patterns. Our findings stress that heterogeneity in subjective models is an overlooked determinant of monetary policy transmission.","also_at":[],"analysis":null,"authors":["Francesco D’Acunto","Dimitris Georgarakos","Geoff Kenny","Michael Weber"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"572bcc112ffe1bb0","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Shows heterogeneous subjective models affect monetary-policy transmission, relevant for advanced-economy policy.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Subjective Models of the Macroeconomy and the Transmission of Monetary Policy","url":"https://ideas.repec.org/p/nbr/nberwo/35831.html"},{"abstract":"We review recent research on how the Fed's risk-management approach shapes the overall policy stance and how it affects financial market conditions. The evidence shows that the policy stance contains a forward-looking, conditional component that has long been an integral part of the Fed's policymaking toolkit. Asymmetric forward-looking policy tilts—motivated by risk-management considerations and revealed via the Fed’s communication—complement and extend beyond the effects of direct policy actions. Drawing on the transcripts of FOMC meetings between 1976 and 2019, we provide an institutional history of the tilt and its connection to how the Committee’s thinking about risk evolved over decades. Going back at least to the early 1990s, the Fed has relied on tilts not only to steer market expectations but, equally importantly, to stabilize risk premia and maintain easy financial conditions. We discuss successes and challenges associated with communication via tilts and draw lessons for the renewed debate over the form and extent of central bank forward-looking guidance.","also_at":[],"analysis":null,"authors":["Anna CIeslak","Stephen Hansen","Hao Pang"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"558efaf0afc403e9","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Reviews Fed risk-management tilt and its effect on financial conditions, directly relevant to markets.","screening_tag":"DM","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"DM","tag_inferred":false,"title":"Risk Management in Monetary Policy: A Review with Asset Pricing Implications","url":"https://ideas.repec.org/p/fip/feddwp/103760.html"},{"abstract":"Emotional intelligence constitutes a key component of human capital, shaped partially by educational materials. Using machine learning and generative AI tools, we examine emotional content in public-school textbooks and children’s literature. A stark mismatch emerges: text exposes children to a broad emotional range, but images overwhelmingly depict happiness and calm, regardless of emotions described in text on the same page. Nearly half of pages show zero overlap between the emotions described in text and those shown in images. This pattern persists across time, contexts, and identities. Household purchases and library inventories suggest content may be endogenously shaped by consumer demand favoring “positive” cover imagery, implying market forces narrow the emotional landscape children encounter.","also_at":[],"analysis":null,"authors":["Anjali Adukia","Matthew Bonci","Paula Dastres Gallardo","Emileigh Harrison","Jake Nicoll","Teodora Szasz"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"53d798c8329ed08b","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":1,"screen_reason":"Focuses on textbook emotional content, unrelated to macroeconomics or markets.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"(How) Do We Teach Emotions?","url":"https://ideas.repec.org/p/nbr/nberwo/35789.html"},{"abstract":"Growth theory is based on the assumption of exponential total factor productivity (TFP) growth, in other words, that the conditional expectation of the next TFP increment is proportional to the current level of TFP. In the United States, we find strong evidence that TFP growth is conditionally additive, not exponential. Even starting from low priors, Bayesian estimation selects the additive model over the exponential one. In addition, professional forecasts and international TFP series are consistent with the additive model but not with the exponential one.","also_at":[],"analysis":null,"authors":["Callum Jones","David López-Salido","Thomas Philippon"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"4efc46a9ce03456e","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Challenges the standard assumption of exponential TFP growth, which has significant implications for long-term economic forecasting and potential growth estimates.","screening_tag":"DM","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"DM","tag_inferred":false,"title":"Is Growth Additive?","url":"https://ideas.repec.org/p/bde/wpaper/2630e.html"},{"abstract":"What determines banks' demand for holding reserves at the central bank overnight? This has become a critical question for central banks that are shrinking their balance sheets. We exploit the unique operational framework in Sweden and quantify the factors that drive banks' demand to hold excess reserves at the central bank. Using granular data, we document significant fragmentation in interbank markets with a set of banks that never trade in interbank markets (inactive banks) and others that do (active banks). Active banks' excess reserves increase with their payment flow volatility and the cost of borrowing in interbank markets. Furthermore, excess reserve holdings shrink when aggregate interbank activity is high. Inactive banks' excess reserves also increase with their payment flow volatility but show greater persistence over time, underlining their passivity. Our findings not only shed light on the bank-level drivers of excess reserve demand but also on likely dynamics in untested demand-driven floors.","also_at":[],"analysis":null,"authors":["Per Asberg-Sommar","Mathias Drehmann","Denise Hansson","Vatsala Shreeti"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"4de67d14db8fd676","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Identifies drivers of banks' excess reserve demand in Sweden, informing central-bank balance-sheet policy.","screening_tag":"DM","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"DM","tag_inferred":false,"title":"What determines banks' excess demand for reserves?","url":"https://ideas.repec.org/p/bis/biswps/1376.html"},{"abstract":"This chapter examines the consequences of zero-sum environments for cultural change, innovation, and long-term economic growth. We introduce innovation into the framework developed by Bergeron et al. (forthcoming), in which zero-sum environments give rise to demotivating beliefs. Although demotivating beliefs improve static efficiency by limiting excessive competition in zero-sum environments, we show that they can also impede long-term growth. Because demotivating beliefs suppress effort, they can also reduce learning-by-doing and other production spillovers. Hence, they can inhibit innovation and act as a cultural evolutionary kludge. We apply the model to explain the cultural changes associated with Western Europe's economic rise after 1500.","also_at":[],"analysis":null,"authors":["Augustin Bergeron","Jean-Paul Carvalho","Joseph Henrich","Nathan Nunn","Jonathan L. Weigel"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"4cb8d9e956a7ce37","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":2,"screen_reason":"Theoretical chapter on zero-sum environments and growth, minimal direct market connection.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"The Dynamics of Development in a Zero-Sum World","url":"https://ideas.repec.org/p/nbr/nberwo/35813.html"},{"abstract":"We study forecasts for real gross domestic product growth by international organisations. These forecasts influence policy decisions by international organisations and national governments, and receive significant attention from the private sector. First, we compare the accuracy of forecasters and test the rationality of forecasts using a large dataset of forecasts by four international organisations (the International Monetary Fund, the World Bank, the European Commission and the Organisation for Economic Co-operation and Development) and private-sector forecasts. Second, we derive a new decomposition of differences in forecast accuracy into contributions from disagreement and the accuracy of the average forecast. Finally, we present theoretical results and empirical evidence on two explanations for the rejection of forecast rationality: the use of conditioning assumptions and the practice of making modal forecasts.","also_at":[],"analysis":null,"authors":["Martin McCarthy","Umberto Collodel","Prakash Loungani"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"other-central-bank","id":"4c2ec73c3c9ff57b","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Evaluates forecast accuracy of major international organisations, impacting policy and market expectations globally.","screening_tag":"Transversal","selected_in":[],"source":"rba","source_name":"Reserve Bank of Australia","tag":"Transversal","tag_inferred":false,"title":"Real GDP Forecasts by International Organisations","url":"https://ideas.repec.org/p/rba/rbardp/rdp2026-05.html"},{"abstract":"Losses from natural disasters can be mitigated through investments in property protection, yet adoption of low-cost risk-reducing measures remains low. In wildfire-exposed areas, managing vegetation and other fuels next to homes decreases structure vulnerability, but few properties comply with best practices despite widespread outreach efforts. We report on two randomized field experiments that incentivized thousands of Oregon homeowners to participate in pre-existing fire department programs to reduce wildfire risk. Across both experiments, financial incentives of $100 to $500 resulted in up to 12% of homeowners scheduling free defensible space assessments, while information-only approaches achieved assessment takeup rates of 3% at most. Responses to subsidies are largest among owners of more valuable homes, while baseline wildfire risk does not predict responsiveness. On-the-ground and remotely-sensed measures of vegetation provide noisy estimates of treatment effects on endline vegetation. Finally, we consider the extent to which the estimated behavioral elasticities from these experiments might shed light on potential homeowner responses to pricing of wildfire risk reductions in home insurance premiums, a practice that is becoming more common due to technological and regulatory changes.","also_at":[],"analysis":null,"authors":["Patrick Baylis","Judson Boomhower","Bob Horton","Chris Mulverhill"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"4ad7eb1ce7a31f2e","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":3,"screen_reason":"Field experiments on wildfire risk mitigation inform homeowner behavior and insurance markets.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Incentivizing Self-Protection From Wildfires","url":"https://ideas.repec.org/p/nbr/nberwo/35764.html"},{"abstract":"Much of the existing research on the relationship between family structure and children’s outcomes has focused on average effects. Kearney and Levine (2017) instead proposed a heterogeneous framework in which the gap in outcomes between children of married and unmarried parents varies according to the resource context, namely a mother’s own resources, the net resources that a partner would contribute, and the outcome-specific returns to those resources. Using data from the 2013 Panel Study of Income Dynamics (PSID), they found evidence consistent with the model’s predictions. We revisit this question using the 2023 PSID to examine how these relationships have changed over the past decade. We find that the association between childhood family structure and young adult poverty has greatly diminished, whereas the association with college completion persists and is concentrated among children of mothers with higher levels of education. These findings suggest that although the economic circumstances of single mothers and their children have generally improved in recent decades, disparities in household resources and higher-order educational outcomes by family structure remain.","also_at":[],"analysis":null,"authors":["Melissa Schettini Kearney","Phillip B. Levine","Alden Q. Barson"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"479431a7255611ee","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":2,"screen_reason":"Revisits family structure impacts on outcomes, limited macroeconomic or market relevance.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"The Evolving Marriage Gap in Children’s Outcomes: Family Structure and Young Adult Outcomes Revisited","url":"https://ideas.repec.org/p/nbr/nberwo/35765.html"},{"abstract":"Occupation choice is a key determinant of economic mobility. This paper studies how childhood neighbors influence occupational choices and later-life earnings. Using linked historical U.S. census records for over six million boys and four million girls, we reconstruct neighborhood microgeography to identify childhood neighbors and their occupations. We find that living next door to someone in a given occupation increases the probability of working in that same occupation 30 years later by about 10 percent relative to other children on the same street. The transmission effect is higher with more intense exposure, in more connected neighborhoods, and when neighboring families are more similar. Exposure to high-income or highly educated neighbors has lasting economic effects, leading to significant gains in adult income and education even compared to other children from the same street. These findings suggest that neighborhood networks play an important role in shaping intergenerational economic mobility.","also_at":[],"analysis":null,"authors":["Michael J. Andrews","Ryan R. Hill","Joseph Price","Riley Wilson"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"453f30575da05915","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":3,"screen_reason":"Studies neighborhood effects on occupational outcomes, modest relevance to labor market mobility.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Like a Good Neighbor: Childhood Neighbors Influence Occupation Choice","url":"https://ideas.repec.org/p/nbr/nberwo/35810.html"},{"abstract":"We propose a new methodology to estimate the equity term structure. Instead of using realized returns of dividend assets, we generalize the implied cost of capital approach and imply the term structure of ex-ante expected returns from the cross-section of observed stock prices and projected firm-level cash flows. Using US data for 1980-2024, we find an unconditionally upward sloping term structure of risk premia with rich cross-sectional patterns in the size, value and credit risk dimensions. Strikingly, value firms and speculative-grade firms have flat or even downward-sloping term structures. We also detect that the term structure flattens out in recessions.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"Using US data for 1980-2024","flags":[],"in_issue":false,"rationale":"The abstract explicitly uses US data, which is a developed-economy context.","relevance_note":"Understanding how expected equity returns vary over horizons and across firm characteristics helps investors and policymakers assess risk premia and market stress signals, especially during downturns.","summary":"The paper introduces a method to infer the equity term structure of expected returns from stock prices and firm cash-flow forecasts, applying it to US data (1980-2024). It finds an overall upward-sloping risk-premia term structure, with notable cross-sectional differences, and a flattening during recessions.","takeaways":["Overall risk-premia term structure is upward sloping across maturities","Value and speculative-grade firms show flat or downward-sloping term structures","Term structure flattens in recession periods","Method uses cross-section of prices and projected cash flows instead of realized returns"],"wording_correction":null},"authors":["Lieven Baele","Joost Driessen","Tomas Jankauskas"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"43c644628836c2c3","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Provides a new methodology for estimating equity term structures and risk premia, offering direct insights into market pricing and recession dynamics.","screening_tag":"DM","selected_in":[],"source":"fed-new-york","source_name":"Federal Reserve Bank of New York","tag":"DM","tag_inferred":false,"title":"The Implied Equity Term Structure","url":"https://ideas.repec.org/p/fip/fednsr/103730.html"},{"abstract":"We study the short-run macroeconomic transmission of a US-China tariff war in an open economy multi-sector New Keynesian model with input-output linkages, sectoral nominal rigidities and heterogeneous currency invoicing. A reciprocal 10 percentage point tariff increase generates asymmetric incidence: the tariff-imposing country bears more of the inflationary burden, while the targeted country experiences the larger output contraction. Production networks amplify this contraction by propagating the shock beyond the directly tariffed bilateral margin. Currency invoicing further shapes transmission. Under heterogeneous invoicing, dollar-denominated border prices weaken the expenditure-switching role of exchange rates, deepening the contraction in China relative to producer-currency pricing and altering third-country spillovers. The euro area response is small in the aggregate, but only because positive trade-diversion margins are offset by weaker demand from China and multilateral adjustments. We then exploit the model’s sectoral structure by imposing tariffs on one Chinese sector at a time. Sectoral incidence is highly concentrated, but aggregate effects cannot be inferred from the directly tariffed sector alone: domestic propagation offsets own-sector gains in the United States, reinforces own-sector losses in China and leaves the euro area as a net object shaped by opposing trade margins. The results show that tariff incidence depends jointly on where the tariff lands, how the shock propagates through production networks and how invoicing governs border-price adjustment. A framework that combines these margins delivers a materially different assessment from one built on bilateral trade shares alone.","also_at":[],"analysis":null,"authors":["Pablo Aguilar","Matthieu Darracq Pariès","Alistair Dieppe","Rubén Domínguez-Díaz","Antonio Eugenelo","José-Elías Gallegos","Javier Quintana"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"421b91645d2c7368","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Models US-China tariff shock across sectors and regions, relevant for trade-linked market outlooks.","screening_tag":"Transversal","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"Transversal","tag_inferred":false,"title":"Tariffs, production networks and spillovers: the case of a US-China trade war","url":"https://ideas.repec.org/p/bde/wpaper/2632e.html"},{"abstract":"We identify a new channel for regulatory leakage: the “permitting channel”. In many settings, permits lock in the regulatory regime at approval, allowing firms to acquire the option to invest under current rules. Unlike the conventional Green Paradox response, this channel operates without accelerating physical investment and pollution. We develop a framework in which firms can use real options to avoid anticipated regulation. We estimate the framework using Colorado’s oil and gas reforms, where permits surged before regulation but drilling did not. Policy-relevant designs that remove the permitting channel substantially reduce the health risks from pollution despite amplifying anticipatory investment.","also_at":[],"analysis":null,"authors":["Anna French","Nicholas Vreugdenhil"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"4094c6eda3f5bac4","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Examines permitting as real options affecting regulation and investment in oil & gas, clear policy/market implications.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Permits as Real Options: Anticipation and Regulatory Leakage","url":"https://ideas.repec.org/p/nbr/nberwo/35794.html"},{"abstract":"We study how business cycle fluctuations shape the pace and direction of innovation. Non-green innovation is procyclical, while green innovation is countercyclical, both over the cycle and in response to economic shocks. We explain this divergence in a dynamic general equilibrium model with endogenous green and non-green innovation. Green patents derive more value from distant profits, making green innovation less sensitive to short-run fluctuations. Endogenous innovation costs reinforce this mechanism, making green and non-green innovation effective substitutes. Evidence from market-implied patent valuations and scientist earnings supports the mechanism. The model implies larger and greener effects of innovation subsidies during downturns.","also_at":[],"analysis":null,"authors":["Diego R. Känzig","Maximilian Konradt","Lixing Wang","Donghai Zhang"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"4022f3fcc3370b86","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Links business-cycle fluctuations to green vs non-green innovation, informing policy and market cycles.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Innovation, Business Cycles, and the Climate Transition","url":"https://ideas.repec.org/p/nbr/nberwo/35795.html"},{"abstract":"This paper studies the financial-market transmission of the April 2025 U.S. tariff announcements, with a particular focus on the unusual combination of dollar depreciation and rising long-term U.S. Treasury yields. We ask whether the market reaction can be understood as the propagation of a single tariff-announcement shock or whether it instead reflects the interaction of distinct macro-financial disturbances. To address this question, we exploit time variation in the volatility and excess kurtosis of structural shocks to recover macro-financial forces without imposing event-based restrictions or exclusion assumptions. Our results show that the initial market reaction is consistent with a conventional safe-haven shock, but this mechanism cannot account for the subsequent joint behaviour of exchange rates and long-term U.S. Treasury yields. Instead, different segments of financial markets are dominated by distinct orthogonal shocks associated with safe-haven demand, confidence in U.S. institutions, Treasury-market intermediation and changes in the convenience value of dollar-denominated safe assets.","also_at":[],"analysis":null,"authors":["Lucas ter Steege","Sofia Velasco"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"3df34481996faec8","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Analyzes exchange-rate and Treasury reactions to US tariff news, informing market-risk transmission.","screening_tag":"DM","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"DM","tag_inferred":false,"title":"What Volatility Reveals: Agnostic Identification of Exchange Rate and Treasury-Market Dynamics in Inconvenient Times","url":"https://ideas.repec.org/p/bde/wpaper/2629e.html"},{"abstract":"Career changes across occupations are central to the cyclical behavior of workers’ earnings growth. Using SIPP data, we show that workers who switch both employers and occupations account for 58 percent of the increase in the left-skewness of earnings growth during recessions. This is driven mainly by cyclical variation in the earnings changes upon a transition, rather than in transition flows. In a business cycle model with on-the-job search over employer and occupation ladders, cyclical shifts in the quality of worker-occupation matches are the main source of cyclical earnings risk, but they generate procyclical skewness only through workers’ optimal mobility decisions: without these, procyclical skewness becomes countercyclical variance. Our results give a structural foundation to reduced-form income processes with higher-order risk, and point to policies that target occupational reallocation directly.","also_at":[],"analysis":null,"authors":["Carlos Carrillo-Tudela","Ludo Visschers","David Wiczer"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"3c826705e8a35dde","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Explains the cyclical nature of earnings risk through occupational mobility, offering a structural foundation for understanding labor market dynamics during recessions.","screening_tag":"DM","selected_in":[],"source":"fed-new-york","source_name":"Federal Reserve Bank of New York","tag":"DM","tag_inferred":true,"title":"Cyclical Earnings, Career and Employment Transitions","url":"https://ideas.repec.org/p/fip/fednsr/103822.html"},{"abstract":"The Second Industrial Revolution sparked a wave of new products and industrial processes, fueling an optimistic Roaring Twenties. But did excitement about technological progress contribute to an over accumulation of investment, despite a slowdown in new product development and satiated demand during the 1920s? And, was this over investment worsened by continuous process innovation? Could these factors have played a role in triggering the Great Depression? To explore these questions, a macroeconomic model that incorporates both process and product innovation is proposed. Proof-of-concept simulations are performed to assess whether these factors can help explain the Great Depression. The answer is yes.","also_at":[],"analysis":null,"authors":["Harold L. Cole","Stefano Cravero","Jeremy Greenwood"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"3bed5acf65897645","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":5,"screen_reason":"Uses macro model of innovation to explain Great Depression, indirect relevance to historical macro insights.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"The Great Accretion and the Great Depression","url":"https://ideas.repec.org/p/nbr/nberwo/35816.html"},{"abstract":"Governments have long imposed minimum equity requirements on new corporations. Opponents view them as barriers to entry while proponents argue that they protect stakeholders from financially unviable businesses. We study this quantity-quality trade-off using a Norwegian reform and comprehensive data linking entrepreneurs to their firms. A 70% reduction in required capital nearly doubled entrepreneurial entry, with no deterioration in survival, profitability, productivity, or interest-bearing leverage and no differences in founders’ ex-ante income, liquidity, or ability. These results suggest capital requirements restrict entrepreneurship without screening on quality or liquidity. Rather, we highlight returns-to-scale heterogeneity as an important determinant of the observed entry response.","also_at":[],"analysis":null,"authors":["Annika Bacher","Andreas Fagereng","Marius A. K. Ring","Ella Getz Wold"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"395216cc9cd60421","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":3,"screen_reason":"Examines capital requirement reform on entrepreneurship entry, modest macro relevance.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Regulating Entrepreneurship: The Case of Capital Requirements","url":"https://ideas.repec.org/p/nbr/nberwo/35780.html"},{"abstract":"Time-varying asymmetric inflation risks generate persistent stagflationary effects. A quantitative general equilibrium model with time-varying skewness in the distribution of cost-push shocks matches these effects. Central to the analysis is a representation theorem that provides a tractable characterization of a broad class of models with asymmetric shock distributions. The theorem enables a closed-form characterization of optimal monetary policy, according to which the central bank should lean against the balance of inflation risks, while rendering quantitative general-equilibrium models with time-varying risks amenable to counterfactual and scenario analysis.","also_at":[],"analysis":null,"authors":["Andrea De Polis","Leonardo Melosi","Ivan Petrella"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"3017635c39320805","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Provides a tractable model of asymmetric inflation risk with policy implications for advanced economies.","screening_tag":"DM","selected_in":[],"source":"bde","source_name":"Banco de España","tag":"DM","tag_inferred":true,"title":"The Taming of the Skew: Asymmetric Inflation Risk and Monetary Policy","url":"https://ideas.repec.org/p/bde/wpaper/2626.html"},{"abstract":"In an increasingly digital retail payments landscape, it is essential that households are well prepared for incidents that temporarily disrupt their ability to make digital payments for everyday purchases. This study examines whether Dutch households are prepared for such disruptions and whether official preparedness advice has translated into recommended behaviour. We use survey evidence from 5,672 Dutch respondents collected after the May 2025 official recommendation to hold €70 per adult and €30 per child in cash for a 72-hour outage of electronic payments and to maintain multiple means of payment. Awareness is high, but incomplete: 71% of respondents know the cash recommendation, while 58% hold the recommended amount or more. This implies a preparedness gap, especially among financially constrained households. Awareness is strongly associated with compliance; respondents who know the advice are 21 percentage points more likely to meet it. Non-compliance appears partly behavioural rather than purely informational or financial; the most frequently cited reason is not having got around to following the advice. Our analysis of several events, including communication about the cash advice, suggests that targeted communication may support compliance with the cash advice. Digital fallback capacity is more widespread than cash fallback preparedness, with 70% of respondents having multiple digital payment instruments for point-of-sale purchases. The findings imply that resilience policies should not only safeguard payment infrastructure but also address the informational, behavioural and practical barriers that prevent households from preparing.","also_at":[],"analysis":null,"authors":["Carin van der Cruijsen","Nicole Jonker"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"2faee1a3c13a0923","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":2,"screen_reason":"Household cash-holding advice in the Netherlands has limited macro or market impact.","screening_tag":"DM","selected_in":[],"source":"dnb","source_name":"De Nederlandsche Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Are households ready to weather a digital storm in retail payments? Evidence from the Netherlands","url":"https://ideas.repec.org/p/dnb/dnbwpp/869.html"},{"abstract":"This paper examines how drug diversion influences the prescribing practices of physicians and the equilibrium health impacts of prescription medications. Focusing on the case of prescription opioids, a commonly prescribed and frequently diverted medication at the heart of the worst drug crisis in U.S. history, I design and estimate a model of physician behavior in the presence of a secondary market with patient search. To access prescription opioids for medical purposes or misuse, patients search over physicians on the legal primary market or turn to an illegal secondary market. Physicians, who care both about their impact on population health and their revenue from office visits, take into account the possibility that patients might resell their prescriptions on the secondary market when prescribing. The model demonstrates that the potential for diversion will tend to make strict physicians more hesitant in their prescribing while leading lenient prescribers to loosen their prescription thresholds, thereby exacerbating prescribing differences between more and less lenient physicians. Estimates reveal that the presence of a secondary market induces most physicians to be more careful in their prescribing, which brings prescriptions closer to their optimal level, but also causes harm through the reallocation of prescriptions for abuse.","also_at":[],"analysis":null,"authors":["Molly Schnell"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"publisher issue page","doi":"10.3982/ecta20884","doi_registered":"2026-09-14","flags":[],"group":"journal","id":"2d756c4428c37235","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":2,"screen_reason":"Health-policy focus on opioid prescribing, not central to macro or financial markets.","screening_tag":"DM","selected_in":[],"source":"econometrica","source_name":"Econometrica","tag":"DM","tag_inferred":false,"title":"Physician Behavior in the Presence of a Secondary Market: The Case of Prescription Opioids","url":"https://doi.org/10.3982/ecta20884"},{"abstract":"The public pays close attention to Federal Reserve communications about future monetary policy, but it remains an open question how those communications shape the public’s expectations for the path of policy rates. We explore how market expectations adjust to the information provided in the “dot plot” of the Summary of Economic Projections, which contains the Federal Open Market Committee’s assessment of the appropriate future path of the federal funds rate. The results shed light on the market interpretation of forward guidance and its efficacy as a communication tool. We find that financial markets respond to the Federal Reserve’s “dot plot” projections by adjusting their expectations for future interest rates, but only partially and gradually, reflecting the understanding that these projections are conditional forecasts rather than firm commitments. Over time, both market expectations and FOMC projections for interest rates tend to converge, showing that the dot plot is informative to market participants. This gradual adjustment highlights the dot plot’s role as a communication tool that shapes, but does not dictate, market expectations.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"Federal Reserve’s “dot plot” projections","flags":[],"in_issue":false,"rationale":"The abstract references the Federal Reserve and the federal funds rate, which are U.S. institutions and thus advanced-economy (DM).","relevance_note":"Understanding the pace and extent of market reaction to the dot plot helps policymakers gauge the effectiveness of forward guidance and informs investors about the likely trajectory of interest-rate expectations.","summary":"The paper examines how financial markets adjust their expectations for future interest rates after the Federal Reserve releases its “dot plot.” It finds that markets respond partially and gradually, with expectations and FOMC projections converging over time.","takeaways":["Market expectations shift toward the dot-plot projections but not immediately.","Adjustment is gradual, reflecting the conditional nature of the forecasts.","Over time, market expectations and FOMC rate projections tend to converge."],"wording_correction":null},"authors":["Stefania D'Amico","Thomas B. King","Francisco Torralba"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"2d3b3c5c020cf303","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Directly assesses how Fed dot-plot shapes market rate expectations, crucial for policy-driven market moves.","screening_tag":"DM","selected_in":[],"source":"fed-new-york","source_name":"Federal Reserve Bank of New York","tag":"DM","tag_inferred":false,"title":"How Do Market Expectations React to the FOMC Dot Plot?","url":"https://ideas.repec.org/p/fip/fednsr/103737.html"},{"abstract":"We show how fertility delays compound across generations to raise age at first grandmotherhood. Under the 1960 first-birth schedule median grandmotherhood came at 44. Under the 2024 schedule it is 57, cutting the healthy years with grandchildren from 28 to 15. Longer life does not make up the loss of years when the grandmother is healthy enough to supply money and care. Delay is most pronounced among the college-educated, with reproductive-control access accounting for over half the fall in grandmotherhood by age 55 among White college graduates. When a daughter times her first birth to maximize her own payoff, the loss her choice imposes on her mother is external to her calculation. We call this the Rotten Adult Kid Problem. Delay raises both the price of a grandmother's care and wealth per grandchild.","also_at":[],"analysis":null,"authors":["Dora L. Costa","Matthew E. Kahn"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"2609a7b9792415d5","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":1,"screen_reason":"Analyzes demographic timing of grandmotherhood, unrelated to markets or policy.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Compound Delay: The Causes and Consequences of Later Grandmotherhood","url":"https://ideas.repec.org/p/nbr/nberwo/35773.html"},{"abstract":"Why might firms make different claims in advertising both with respect to themselves and to rivals? I study how claims direct consumers to different customer experiences, and how prices change the available evidence. Attributing successes to the advertiser requires a low price when its product is superior; attributing failures to the rival supports a higher price. Focussing on a single strategic advertiser, the model shows that the claim that attracts the most customers to a superior product never maximises profit. The optimal campaign raises advertiser profit but lowers consumer surplus relative to fully informed choice, and reduces total welfare whenever product reliabilities differ. When both firms choose claims and prices, competition can sustain a mix of positive and negative claims with price dispersion, restoring claims that a lone advertiser would reject. A rival's pricing response alone can make failure attribution optimal by weakening incentives to undercut. Allowing the rival to advertise can lower both prices and shift customers towards it if the incumbent retains its previous claim; allowing the incumbent to change its claim can eliminate this additional effect. Advertising, therefore, changes not only persuasion but also pricing incentives, making its market consequences different from its effects at fixed prices.","also_at":[],"analysis":null,"authors":["Joshua S. Gans"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"256091c351ff3cbd","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":2,"screen_reason":"Analyzes firm advertising claims and pricing, with limited macro or policy implications.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Advertising Claims, Pricing, and Customer Evidence","url":"https://ideas.repec.org/p/nbr/nberwo/35770.html"},{"abstract":"Women remain disadvantaged in promotion to managerial positions. We conduct a field experiment with 24 large garment factories in Bangladesh to test for inefficient representation of women among line supervisors. We identify the marginal female and male candidates for supervisory positions and randomly assign them to manage production lines. We document four findings: (1) In contrast to widespread negative beliefs about women's ability as supervisors at baseline, female candidates selected by the factories had similar skills to males; (2) during the trial, females performed worse than males, which we show is related to negative bias against them; (3) after the trial, however, many female candidates were retained as supervisors and, conditional on that, performed similar to males; and (4) after the end of our intervention, factories permanently increased the share of women among newly appointed supervisors. A conceptual framework of experimentation over discrimination rationalizes all these facts and cautions against the standard logic to test for discrimination: when there is uncertainty about the performance of the discriminated group, equal—or even worse—performance of the marginal candidates of that group is no longer sufficient to rule out inefficient discrimination.","also_at":[],"analysis":null,"authors":["Rocco Macchiavello","Andreas Menzel","Atonu Rabbani","Christopher Woodruff"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"publisher issue page","doi":"10.3982/ecta18759","doi_registered":"2026-09-14","flags":[],"group":"journal","id":"23d9b0a7b0c192db","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":1,"screen_reason":"Labor experiment in Bangladesh, little macroeconomic or market relevance.","screening_tag":"EM","selected_in":[],"source":"econometrica","source_name":"Econometrica","tag":"EM","tag_inferred":false,"title":"Promoting Women to Managerial Roles in the Bangladeshi Garment Sector","url":"https://doi.org/10.3982/ecta18759"},{"abstract":"This study investigates how extreme flood events can indirectly impact the global supply chain through production disruptions. Using a data-driven, agent-based network model that combines company-level data with flood hazard maps, the research simulates the transmission and amplification of shocks. The findings emphasize that the size of inventories is crucial; a lean-inventory system leads to faster shock propagation, higher losses, and fewer recoveries compared to an abundant-inventory system. Additionally, the study identifies that the number and criticality of flooded companies' trade links, along with the magnitude of the flood, correlate with the speed and severity of contagion. Interestingly, a key metric -the average criticality of affected firms' outgoing links- consistently peaks before the shock's propagation enters a fast-paced contagion regime. This could serve as an early warning indicator, giving businesses and policymakers precious time to react. By identifying these critical vulnerabilities, this research provides a framework for enhancing the resilience of global supply chains in the face of increasing climate-related and other risks.","also_at":[],"analysis":null,"authors":["Georgios Papadopoulos","Javier Ojea Ferreiro","Roberto Panzica"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"1eb66eb8e5bf20a4","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":8,"screen_reason":"Models the transmission of climate-related supply chain shocks, offering a framework for assessing systemic risk and corporate resilience.","screening_tag":"Transversal","selected_in":[],"source":"boc","source_name":"Bank of Canada Staff Working Papers","tag":"Transversal","tag_inferred":false,"title":"Climate stress test of the global supply chain network: the case of river floods","url":"https://ideas.repec.org/p/bca/bocawp/26-30.html"},{"abstract":"This paper studies security design by bidders with dispersed information about a common‐value investment opportunity. Among a broad set of securities, bidders offer debt financing—the flattest securities. A first reason is that debt mitigates bidders' exposure to the winner's curse when there are two bidders. Second, the entrepreneur either has an informational advantage initially or gains one by inferring from the bids, and is more likely to select debt offers when optimistic about the project. While a bidder's choice of security also has a signaling effect, this effect is dominated by the winner's curse and informed‐selection effects, and does not affect the equilibrium outcome. These results contrast sharply with security design by a monopolistic investor, as well as with DeMarzo, Kremer, and Skrzypacz's (2005) results under private‐value competition. The entrepreneur's ability to commit to an ordered set of securities does not improve revenue.","also_at":[],"analysis":null,"authors":["Yue Yuan"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"publisher issue page","doi":"10.3982/ecta21366","doi_registered":"2026-09-14","flags":[],"group":"journal","id":"1c5d8cc276dc7a8f","issue_date":null,"kind":"journal","publication_month":"2026-09","relevance":2,"screen_reason":"Theoretical security design with limited direct market or policy impact.","screening_tag":"Transversal","selected_in":[],"source":"econometrica","source_name":"Econometrica","tag":"Transversal","tag_inferred":false,"title":"Security Design Under Common‐Value Competition","url":"https://doi.org/10.3982/ecta21366"},{"abstract":"Using child development data collected during the evaluation of an early childhood education program, this paper estimates a dynamic model of human development from ages 1 to 6. We model three latent factors—health, cognitive skills, and socio-emotional skills—and allow them to interact with each other and with multiple inputs to shape subsequent development. The richness and high-frequency nature of the data permit a flexible specification that (i) allows for complex dynamics, (ii) lets each factor con- tribute to the production of the others, (iii) permits age-varying production technologies, and (iv) treats parental investment as endogenous. We use the estimated model to identify “windows of opportunity” in which parental interventions, or programs that increase investment, are especially effective. Results indicate that developmental dynamics are richer than typically assumed, with important implications for persistence: the impact of inputs can decay or endure in ways that vary across domains and over age. Accounting for endogenous investment is consequential for inference.","also_at":[],"analysis":null,"authors":["Orazio Attanasio","Raquel Bernal","Michele Giannola","Milagros Nores"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"19ff823b0f443ad9","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":1,"screen_reason":"Focuses on child development dynamics, no direct macro or market link.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Windows of Opportunity in Early Childhood: A Dynamic Model of Multidimensional Development","url":"https://ideas.repec.org/p/nbr/nberwo/35818.html"},{"abstract":"In McMahon et al. (2024) the authors demonstrated the effectiveness of a hybrid quantum solver in improving the liquidity efficiency of Canada’s high-value payments system (HVPS), altering the payment queue in order to minimize liquidity requirements. In this work, we apply a similar technique to the Italian segment of TARGET2, the Eurosystem’s HVPS, using the Constrained Quadratic Model (CQM) solver provided by D-Wave. This application achieves improvements in optimizing payment batches of size 70 and 140, showing daily average liquidity savings of respectively EUR 23 million and EUR 38 million over a 35 days sample. In addition we clarify the causes and possible extent of the liquidity savings realized. Introducing a machine learning framework to identify batch features that enhance liquidity savings, we find that batch optimizability increases with the number of participants acting as both senders and receivers, as well as the number of unique receivers within the batch. Finally we benchmark the CQM solver results against those obtained using a simulated annealing algorithm (SAA) under the same time constraints, finding comparable liquidity savings for batch sizes of 70 and 140 payments. The SAA is extended to handle batch sizes of up to 700 payments, a scale that is challenging for current quantum hardware, demonstrating a more than tenfold increase in liquidity savings.","also_at":[],"analysis":null,"authors":["Valerio Astuti","Adriano Baldeschi","Luca Bastianelli","Giuseppe Bruno","Riccardo Russo","Ajit Desai","Danica Marsden"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"166814659e8072e2","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Shows liquidity savings in Euro-area payment system, relevant to central-bank liquidity management and market operations.","screening_tag":"DM","selected_in":[],"source":"boc","source_name":"Bank of Canada Staff Working Papers","tag":"DM","tag_inferred":false,"title":"Liquidity Optimization in Gross Settlement Systems with Quantum Reordering: Application to TARGET2","url":"https://ideas.repec.org/p/bca/bocawp/26-32.html"},{"abstract":"International organisations including the Bank for International Settlements (BIS) have adopted SDMx (Statistical Data and Metadata) as the standard for exchanging official statistics. Trust in published data is essential for evidence-based policymaking. This paper shows how binding each SDMx dataset to its source using blockchain technology can enhance confidence in official statistics. We present a proof of concept implemented on the XRP Ledger (XRPL) and contribute, as an integrated whole, (i) an SDMx native canonicalisation and per- hashing pipeline; (ii) a domain-separated Merkle aggregation scheme for batched anchoring; (iii) a self-contained, identity-bound verification artefact in which the SDMx message itself carries both the ordered Merkle leaves and a W3C Verifiable Credential signed by a publisher identity key cryptographically bound to the publisher’s XRPL address via an on-chain attestation registry, so that any consumer can re-derive the anchored root and verify the publisher’s identity from the file alone plus a single ledger lookup; (iv) an open-source XRPL-based reference implementation; and (v) a cost model that captures the batch size / latency / fee trade-off and is solved for an economically optimal batch size. The system enables near real-time data verification, provides cryptographic integrity guarantees, and establishes a foundation for future extensions, including zero knowledge proofs and automated verification by AI agents. Measurements on the prototype show median publication latency of 3–5 seconds and verification latency of 1–2 seconds under the controlled test conditions. The approach is data-format-agnostic and can be extended to other structured statistical or regulatory formats.","also_at":[],"analysis":null,"authors":["Mario Rusev","Rafael Schmidt","Edward Lambe","Christian Schmieder","Glenn Philip Tice"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"multilateral","id":"148df8d7f7be53e6","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":2,"screen_reason":"Presents a blockchain solution for official statistics, largely technical with minimal direct market impact.","screening_tag":"Transversal","selected_in":[],"source":"bis","source_name":"BIS Working Papers","tag":"Transversal","tag_inferred":false,"title":"Verifiable official statistics: a blockchain-based approach","url":"https://ideas.repec.org/p/bis/biswps/1374.html"},{"abstract":"The impact of AI on the employment prospects of recent college graduates is hotly debated with no consensus on the magnitude of impacts nor even the timing of those potential impacts. Using CPS microdata, we provide the first estimates of the effects of AI on the unemployment of recent college graduates in June, July and August 2026. We provide evidence suggesting that unemployment rates are especially high for summer months and that 2026 might be the first year of widespread enough AI use in the workplace to detect impacts of AI on recent college graduates, the group argued to be most vulnerable to AI replacement. Taking an agnostic approach to defining treatment timing, we find that unemployment rates did not spike in summer 2026 relative to summer months in previous years and did not rise in a significant way relative to older college graduates or young workers without a college degree. We also provide the first analysis of an expanded definition of unemployment that includes those who report “wanting a job” which adds nearly two percentage points to the unemployment rate of recent college graduates but we find no evidence of a statistically significant increase in summer 2026 even after adding these “sidelined unemployed.” We estimate difference-in-differences and event-study interaction models using both older college graduates and young non-college graduates as comparison groups and do not find evidence of an increase in relative unemployment rates. Finally, we estimate models in which we interact 2026 unemployment with AI exposure and remote work availability by occupation and find some evidence of a positive relationship with remote work availability.","also_at":[],"analysis":null,"authors":["Robert W. Fairlie","Jane Wu"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"143c2eb1b4b112bb","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Provides early empirical evidence on AI’s labor market impact, pertinent to employment outlook and policy.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"The Early Impacts of AI on Employment among Recent College Graduates","url":"https://ideas.repec.org/p/nbr/nberwo/35796.html"},{"abstract":"Remote work is often touted as a way for disabled and older workers to remain in the labour market. Post-Covid, the incidence of remote work has increased in the UK. Following Bloom et al. (2026), we test the effects of remote work on employment for these two groups using the pandemic’s increase in work from home rates as a quasi-experiment. We compare occupations with high growth in work from home (WFH) to those with lower growth in work from home, with growth rates measured among the non-disabled or younger. We then instrument using pre-pandemic remote work scores from Dingle and Neiman (2020). We find significant evidence that rising WFH increases employment of disabled and older workers in the UK. We additionally find decreases in commute time and wages for both groups, but no effect on hours worked.","also_at":[],"analysis":null,"authors":["Ian Burn","Melissa D. Gentry","Joanna Lahey"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"13a3f24820d4ccc8","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":4,"screen_reason":"Studies remote-work impact on UK employment, limited direct market or policy relevance.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":false,"title":"Here, There, and Everywhere: Remote Work’s Impact on Employment in the UK","url":"https://ideas.repec.org/p/nbr/nberwo/35791.html"},{"abstract":"We examine the causal effect of uncertainty in property rights on housing prices and speculative behavior. We take advantage of a distinctive setting in Shenzhen, China, where neighboring residential units that are otherwise similar differ in the strength of their property rights protections. Some units have full property rights (FPR) with a 70-year leasehold, whereas others have only limited property rights (LPR) protections. Using detailed listing data, we find that the sales market prices these protections, while the rental market does not. Our estimates imply that the perceived probability that FPR rights could be questioned at the end of the 70-year term is between 7% and 21%, and that the probability the LPR receives no legal protection in any future year exceeds 50%. We further show that LPR units are more susceptible to speculation, as reflected in higher turnover and greater price volatility. Lastly, we show that the public release of new urban planning codes raises listing prices and lowers turnover and price volatility for LPR properties relative to matched FPR units.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"a distinctive setting in Shenzhen, China","flags":[],"in_issue":false,"rationale":"The abstract explicitly names Shenzhen, China as the location for the study.","relevance_note":"The findings highlight how institutional uncertainty and legal protections directly influence asset pricing and speculative activity in real estate markets.","summary":"This paper examines how property rights uncertainty affects housing prices and speculative behavior in Shenzhen, China. By comparing residential units with full property rights to those with limited protections, the authors find that sales prices reflect these differences while rental markets do not. The study also shows that limited property rights are associated with higher turnover and price volatility, though new urban planning codes can mitigate these effects.","takeaways":["Sales markets price in property rights protections, whereas rental markets do not.","Limited property rights units exhibit higher turnover and greater price volatility.","New urban planning codes raise listing prices and lower turnover for limited property rights units."],"wording_correction":null},"authors":["Hanming Fang","Jing Wu","Vincent Yao"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"11d2f5a8577c0d72","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":7,"screen_reason":"Identifies property-rights uncertainty effects on Chinese housing prices and speculation.","screening_tag":"EM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"EM","tag_inferred":false,"title":"Property Rights Uncertainty, Prices, and Speculation: Evidence from China's Housing Market","url":"https://ideas.repec.org/p/nbr/nberwo/35797.html"},{"abstract":"We document the macroeconomic patterns that characterize labor market recovery from financial crises. Using a sample of postwar recession episodes from around the world, we show that financial crises are typically followed by jobless recoveries, with a sluggish recovery in employment relative to output. A departure from this empirical regularity occurs in emerging-market crises with high inflation, which feature strong employment recoveries but persistent declines in real wages and result in “wageless recoveries.” Our findings highlight the central role of financial components in labor input costs and nominal wage rigidities in shaping labor market dynamics following economic crises.","also_at":[],"analysis":null,"authors":["Guillermo Calvo","Emilio Colombi","Fabrizio Coricelli","Pablo Ottonello"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"0fb5157d39a0d55e","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Documents labor-market recoveries after financial crises across countries, highlighting divergent EM/DM dynamics.","screening_tag":"Transversal","selected_in":[],"source":"boc","source_name":"Bank of Canada Staff Working Papers","tag":"Transversal","tag_inferred":false,"title":"Labor Markets, Financial Crises, and Inflation: Jobless and Wageless Recoveries","url":"https://ideas.repec.org/p/bca/bocawp/26-31.html"},{"abstract":"This paper studies the relationship between subjective expectations and the term structure of interest rates. Departing from rational expectations, we allow market participants to hold arbitrary beliefs about future interest rates, and derive the condition that expected and realized interest rates must satisfy irrespective of how expectations are formed. We use this condition to decompose the sensitivity of long-term yields to the short-term interest rate into contributions from expectations and risk premia, without imposing any assumption on expectation formation. We find that, for short- and medium-maturity bonds, this sensitivity is driven primarily by movements in expectations rather than risk premia. We then study the sensitivity of expectations themselves and document systematic wedges between the response of long-term yield expectations and that of expectations of shorter-maturity yields over the same window. We argue that these wedges reflect structural inconsistency in subjective expectations, in the sense that expectations across maturities and forecast horizons are inconsistent with the equilibrium restrictions that link different interest rates.","also_at":[],"analysis":{"correction":null,"current_prompt":true,"evidence":"the relationship between subjective expectations and the term structure of interest rates","flags":["tag differs from screening (DM); review"],"in_issue":true,"rationale":"The abstract mentions interest rates and expectations but names no specific economy or region.","relevance_note":"Understanding how expectations versus risk premia shape the term structure helps policymakers and market participants gauge the drivers of yield movements without assuming rational expectations.","summary":"The paper derives a condition that expected and realized interest rates must satisfy however expectations are formed, and uses it to decompose the sensitivity of long-term yields to the short-term interest rate into contributions from expectations and risk premia. It finds that, for short- and medium-maturity bonds, this sensitivity is driven primarily by movements in expectations rather than risk premia, and documents systematic wedges between how expectations of long-term yields and of shorter-maturity yields respond.","takeaways":["For short- and medium-maturity bonds, the sensitivity of long-term yields to the short-term interest rate is driven primarily by movements in expectations rather than risk premia.","There are systematic wedges between the response of long-term yield expectations and that of expectations of shorter-maturity yields over the same window.","The authors argue that these wedges reflect structural inconsistency in subjective expectations across maturities and forecast horizons."],"wording_correction":{"checked":"2026-11-03","human_reviewed":true,"made_by":"Claude (AI assistant)","reason":"The model's first takeaway dropped the abstract's qualifier \"for short- and medium-maturity bonds\" and its second repeated it. The wedges are in how yield expectations respond across maturities, which the model's summary described as wedges \"between expectations of different maturities\". The tag stays Transversal, since the abstract names no economy.","source":"Abstract of the NBER working paper"}},"authors":["Pooya Molavi","Alireza Tahbaz-Salehi","Andrea Vedolin"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"0edaea3271e8c089","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":9,"screen_reason":"Links subjective expectations to yield curve dynamics, crucial for bond-market and policy decisions.","screening_tag":"DM","selected_in":["2026-09"],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Expectations and the Term Structure of Interest Rates","url":"https://ideas.repec.org/p/nbr/nberwo/35766.html"},{"abstract":"We investigate how endogenous rigidities inhibit physical capital reallocation. We focus on the role of contract duration - a classic example of an adjustment rigidity. We argue that when agents sign longer contracts in booms when markets are thin, they generate a contracting externality which further amplifies thinness and impedes the adjustment of markets to shocks. We develop a dynamic spatial framework with booms and busts where agents search and choose match duration. Applying the framework to the containership leasing market, we find substantial misallocation from endogenous rigidities, particularly in the transition after a crash.","also_at":[],"analysis":null,"authors":["Maria Garcia-Osipenko","Nicholas Vreugdenhil","Nahim B. Zahur"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"0c89193f624526c3","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Shows how contract rigidity misallocates capital in containership leasing, relevant for trade-related asset markets.","screening_tag":"Transversal","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"Transversal","tag_inferred":false,"title":"Endogenous Rigidities and Capital Misallocation: Evidence from Containerships","url":"https://ideas.repec.org/p/nbr/nberwo/35821.html"},{"abstract":"We estimate the direct effects of robot adoption on the within-firm distribution of income between non-owner workers and individual owners in Canadian private corporations. We link firm-level data on industrial robot imports to matched owner-worker-firm data that identify owners of private corporations, their employment income, and firms’ dividend payments to owners and retained earnings. Robot adoption is associated with sizable increases in firm revenues, value added, and non-owner employment and payroll. Unlike several studies of robot adoption in other settings, we find little evidence that adoption reduces adopters’ conventionally measured labor share of value added; if anything, the non-owner labor share increases slightly, while the total owner income share does not rise. Owners nevertheless benefit from adoption, but primarily through increases in employment income. These results underscore the importance of distinguishing owner employment income from ordinary worker payroll for measuring how firm-level technology shocks affect workers, owners, and the distribution of income within firms.","also_at":[],"analysis":null,"authors":["Gabriela Galassi","Gaelan MacKenzie"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"0a736ff5362c8c55","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Investigates the impact of automation on income distribution within firms, providing empirical evidence on the labor-capital share debate.","screening_tag":"DM","selected_in":[],"source":"boc","source_name":"Bank of Canada Staff Working Papers","tag":"DM","tag_inferred":false,"title":"Automation and Inequality: How Robots Shift Income Between Workers and Owners","url":"https://ideas.repec.org/p/bca/bocawp/26-34.html"},{"abstract":"Technical change often simplifies jobs. This increases productivity, but it also makes workers more substitutable–or more \"commoditized.\" Commoditization of labor drives down worker bargaining power: anyone can do the job, implying workers are disposable, which improves the outside option of firms and can lower worker wages. We develop a model that captures both the productivity enhancing and wage depressing effects of commoditizing technical change. Commoditizing technical change involves firms standardizing tasks. This reduces the sensitivity of output to worker quality. Firms benefit because they can more easily fill vacancies for their durable jobs. We show that our model can help explain the divergence between productivity and wages in the service sector, increasing wage markdowns despite falling local concentration, and the decline of the large-firm wage premium.","also_at":[],"analysis":null,"authors":["Masao Fukui","Emi Nakamura","Jón Steinsson"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"05d62dd98684fba8","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Model links technical change to wage dynamics, informing labor-market and productivity discussions.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"The Commoditization of Labor","url":"https://ideas.repec.org/p/nbr/nberwo/35815.html"},{"abstract":"A central design goal of settlement systems is that security should not degrade when transaction values are high. Using Ethereum’s Proof-of-Work era, we show that Proof-of-Work can fail this test: higher transaction fees—the reward for a successful attack—cause miners to deviate from honest behavior and fork the chain, undermining settlement finality when it is most needed. We exploit a unique feature of Ethereum’s Proof-of-Work era that records, for each fork, both the winning block and its displaced competitor’s timestamp. We jointly instrument hourly mean log fees, hashrate, and block size using a crypto shock indicator constructed from Ethereum hacks, market crises, and regulatory events, together with one-hour lags of hashrate and block size. Higher fees significantly increase canonical blocks arriving exactly one second later than the siblings they displace, which is consistent with deviation from honest behavior. The converse event showing honest behavior—a canonical block arriving before its siblings—is not driven by high fees. This contrast indicates that fees affect equilibrium behavior and settlement finality in Proof-of-Work blockchains.","also_at":[],"analysis":null,"authors":["Pablo D. Azar","Maryam Farboodi"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"039b9e9688a68f04","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":6,"screen_reason":"Examines how transaction fees in proof-of-work systems can incentivize behavior that undermines settlement finality, relevant for digital asset infrastructure and policy.","screening_tag":"Transversal","selected_in":[],"source":"fed-new-york","source_name":"Federal Reserve Bank of New York","tag":"Transversal","tag_inferred":false,"title":"When Higher Stakes Weaken Security","url":"https://ideas.repec.org/p/fip/fednsr/103803.html"},{"abstract":"This paper studies the effects of population growth on welfare in an OLG model, in which lower population growth raises output per worker but also reduces the ratio of workers to retirees. Under fairly mild restrictions on the model’s parameters, there exists an optimal population-growth rate—one that maximizes steady-state welfare. This growth rate may well be negative: it may be optimal for the population to shrink over time. The introduction of a pay-as-you-go social security system reduces the optimal population-growth rate.","also_at":[],"analysis":null,"authors":["Laurence M. Ball"],"date":"2026-09-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"research-network","id":"00275d4f2e0cc196","issue_date":null,"kind":"working_paper","publication_month":"2026-09","relevance":5,"screen_reason":"Theoretical OLG analysis of optimal population growth, relevant to long-run demographic policy debates.","screening_tag":"DM","selected_in":[],"source":"nber","source_name":"NBER Working Papers","tag":"DM","tag_inferred":true,"title":"Optimal Population Growth in the Diamond OLG Model","url":"https://ideas.repec.org/p/nbr/nberwo/35823.html"},{"abstract":"This paper estimates state-level trend unemployment rates (trend U-star) based on the trend components of unemployment inflows and outflows across unemployment durations. The estimated trend U-stars, particularly the portions attributable to long-termunemployment, have levels and dynamics that vary substantially across states. Long-termunemployment makes a relatively small contribution to trend U-star in agricultural states, but takes a larger share for Rust Belt states and several states in the Sun Belt. While higher educational attainment and population aging put downward pressure on U-star, the effects of industrial structure and labor-market rigidities are mixed. Using the estimates of state-level trend U-star, we revisit previous work on state-level Phillips curves and find that the estimated slopes of forward-looking inflation equations are driven bymovements in trend U-star rather than by cyclical variation in the unemployment rate.","also_at":[],"analysis":null,"authors":["Hie Joo Ahn","Jeremy Rudd"],"date":"2026-08-31","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"ef69b0ca9e3134a4","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Estimating state-level trend unemployment rates provides a more granular understanding of labor market slack and its impact on regional Phillips curves.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":false,"title":"United States of U-Star","url":"https://www.federalreserve.gov/econres/feds/united-states-of-u-star.htm"},{"abstract":"This paper examines the relationship between bank capital and reliance on insured deposit funding. Contrary to the conventional moral-hazard view underlying risk-based capital regulation, U.S. bank data reveal a robust negative association between capital and the share of insured deposits. We develop a delegated-monitoring model in which banks choose between insured and uninsured deposit financing. Although monitoring increases with capital under both funding regimes, its sensitivity to capital is greater when deposits are uninsured, strengthening the relative attractiveness of uninsured funding for well-capitalized banks. Our contribution is to show that the relationship between bank capital and deposit insurance depends not only on the direct effect of capital on risk-taking, but also on how capitalization changes a bank’s incentives to monitor under different funding arrangements.","also_at":[],"analysis":null,"authors":["Kaniska Dam","Rajdeep Sengupta"],"date":"2026-08-31","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"e97744d93971375c","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"This research challenges conventional views on bank capital and deposit insurance, which is highly relevant for financial regulation and banking sector analysis.","screening_tag":"DM","selected_in":[],"source":"fed-kansas-city","source_name":"Federal Reserve Bank of Kansas City","tag":"DM","tag_inferred":false,"title":"Bank Capital and Deposit Insurance","url":"https://ideas.repec.org/p/fip/fedkrw/103726.html"},{"abstract":"The distributive effects of carbon taxation are critical for its political acceptability and depend on both income and geographic factors. Using French administrative data, household surveys, and matched employer–employee records, we document that rural households spend 2.8 times more on fossil fuels than urban households and work in firms that emit 2.7 times more greenhouse gases. We incorporate these facts into a spatial heterogeneous-agent model with migration, housing and wealth accumulation, bridging spatial and macroeconomic approaches. Carbon taxes generate 56% larger welfare losses for rural households than for urban households, as the former may be trapped due to mobility frictions and homeownership. While uniform or income-based rebates reduce inequality along the income dimension, they leave large spatial disparities that must be offset through location-based transfers. These results suggest that carbon policies should account for spatial differences to improve political feasibility.","also_at":[],"analysis":null,"authors":["Charles Labrousse","Yann Perdereau"],"date":"2026-08-31","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"e93d9ac12c15f6f4","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":5,"screen_reason":"Analyzes spatial distribution of carbon tax burden in France, offering policy insights with limited market immediacy.","screening_tag":"DM","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"DM","tag_inferred":false,"title":"Geography versus Income: The Heterogeneous Effects of Carbon Taxation","url":"https://ideas.repec.org/p/bfr/banfra/1063.html"},{"abstract":"We develop a search model of international trade where buyers allocate costly cognitive attention across suppliers. Suppliers exploit the cost of shifting attention to extract markups, giving dominant firms the cushion to absorb cost shocks while marginal suppliers pass them on. Validating this mechanism with U.S. tariff data, we estimate a highly concentrated U.S. domestic market. Consequently, while targeted tariffs spur offshore substitution, blanket tariffs force buyers toward captive domestic monopolies. Incumbents’ growing market power raises markups and halves the aggregate macro elasticity relative to micro estimates. Integrating endogenous market-power-dependent elasticity along the path to autarky more than doubles the U.S. gains from trade compared with standard constant-elasticity predictions.","also_at":["https://ideas.repec.org/p/fip/feddwp/103847.html"],"analysis":null,"authors":["Anton Cheremukhin","Paulina Restrepo-Echavarria"],"date":"2026-08-31","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"88d16aa9d11bc4da","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"The study links firm market power and endogenous markups to trade elasticities, offering insights into the macro effects of tariff policies.","screening_tag":"DM","selected_in":[],"source":"fed-st-louis","source_name":"Federal Reserve Bank of St. Louis","tag":"DM","tag_inferred":false,"title":"Endogenous Markups and Trade Elasticities","url":"https://ideas.repec.org/p/fip/fedlwp/103835.html"},{"abstract":"We study how increased uncertainty about U.S. asset returns affects global asset prices and exchange rates in a two-country model with intermediary balance-sheet constraints. Empirically, uncertainty shocks widen global credit spreads, appreciate the dollar, and increase currency risk premia. In our model, higher uncertainty tightens intermediary constraints and lowers asset prices, reversing the counterfactual asset price increase in frictionless models. Because constraints make net worth especially valuable in bad times, risk premia respond strongly to uncertainty shocks. This interaction allows the model to match the credit spread, currency premium, and dollar responses in the data.","also_at":[],"analysis":null,"authors":["Ozge Akinci","Ṣebnem Kalemli-Özcan"],"date":"2026-08-31","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"7652bd77a19f17e7","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"Links US uncertainty shocks to global credit spreads, dollar strength and currency risk premia, relevant for worldwide asset pricing.","screening_tag":"Transversal","selected_in":[],"source":"fed-ifdp","source_name":"Federal Reserve Board, IFDP","tag":"Transversal","tag_inferred":false,"title":"Pricing Risk Globally: Intermediary Constraints, the Dollar, and the Global Financial Cycle","url":"https://ideas.repec.org/p/fip/fedgif/103716.html"},{"abstract":"Since employment dynamics are persistent, a central bank’s dual mandate to promote maximum employment and price stability naturally generates history dependence in monetary policy. This history dependence under a dual mandate flattens the reduced-form Phillips curve, reduces the volatility of inflation in response to demand shocks, and improves outcomes at the zero lower bound. Moreover, we show that a dual mandate can be observationally equivalent to average inflation targeting following a demand shock. However, this equivalence breaks down in the presence of supply shocks. We first illustrate these findings analytically and then examine their quantitative importance in a model with nominal rigidities and labor search frictions calibrated to match U.S. business-cycle moments. An employment mandate can naturally provide the stabilization benefits associated with history-dependent policy frameworks.","also_at":["https://ideas.repec.org/p/fip/fedfwp/103696.html"],"analysis":null,"authors":["Brent Bundick","Nicolas Petrosky-Nadeau"],"date":"2026-08-31","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"72eb59a60ff9ee59","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Analyzes dual mandate effects on inflation and employment, informing US monetary policy and market expectations.","screening_tag":"DM","selected_in":[],"source":"fed-kansas-city","source_name":"Federal Reserve Bank of Kansas City","tag":"DM","tag_inferred":false,"title":"A Dual Mandate Can Support Price Stability","url":"https://ideas.repec.org/p/fip/fedkrw/103722.html"},{"abstract":"We assess the degree of heterogeneity in monetary policy transmission (MPT) across euro area countries for the period 2000–2025. Using monthly local projections, we estimate the effects of monetary policy on a broad set of transmission variables at both euro area and national levels. First, we find limited heterogeneity of output and inflation responses to monetary policy shocks, despite asymmetric responses of mortgage market-related variables. Second, key structural differences, such as households’ indebtedness, debt maturity, interest rate rigidity and sectoral composition, do shape heterogeneities in MPT across euro area countries, according to our results. Considered jointly, though, these differences partly offset one another, leading to a relatively homogeneous transmission of monetary policy. Third, a monthly FAVAR estimation confirms and broadens our local projections results: asymmetry remains contained for output and inflation, but it is higher for sovereign spreads, food prices, credit variables and our consumption proxy. Finally, a rolling-window estimation of the FAVAR model shows that time-varying heterogeneity in MPT is characterized by temporary and crisis-driven divergences that consistently revert to a low baseline, reflecting key monetary policy interventions rather than deeper structural economic divergences. Unconventional monetary policies play a central role in this pattern: they tend to reduce country divergences during crisis periods, impacting more strongly the countries most affected, hence operating, by design, as a heterogeneous policy shock according to our main metric.","also_at":[],"analysis":null,"authors":["Agnès Bénassy-Quéré","Matthieu Bussière","Thaïs Masseï","Arthur Saint-Guilhem"],"date":"2026-08-31","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"4d60f6c1ba59ebc8","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"Assesses heterogeneity of monetary transmission in the euro area, directly impacting policy and market expectations.","screening_tag":"DM","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"DM","tag_inferred":false,"title":"Is Monetary Policy Transmission Heterogeneous across Euro Area Countries and over Time? A Reassessment","url":"https://ideas.repec.org/p/bfr/banfra/1062.html"},{"abstract":"We study how mass-layoff announcements affect electoral outcomes using a newly assembled dataset of US establishment-level administrative notices from the Worker Adjustment and Retraining Notification (WARN) Act. A matched event study compares same-state counties with and without sizable WARN-announced layoffs. Controlling for local labor-market conditions, layoff announcements increase the Democratic-Republican vote margin by reducing Republican votes and increasing Democratic votes without clearly altering election winners or incumbent support. Effects appear across political offices, are not driven by manufacturing decline, and are geographically localized. The responses operate through turnout composition rather than vote switching and result in no policy-induced changes in transfer payments.","also_at":[],"analysis":null,"authors":["Victor Hernandez Martinez","Pawel Krolikowski"],"date":"2026-08-31","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"3a546e3746546aa6","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":6,"screen_reason":"The paper provides empirical evidence on how localized economic shocks like mass layoffs influence political outcomes and voter behavior in the US.","screening_tag":"DM","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"DM","tag_inferred":false,"title":"From Pink Slips to Polling Stations: The Electoral Consequences of Mass-Layoff Announcements","url":"https://ideas.repec.org/p/fip/fedcwq/103764.html"},{"abstract":"Can governments use a carry-trade strategy to offset the fiscal costs of population aging? We examine this question through the consolidated balance sheet of Korea’s public sector, combining the assets and liabilities of the government, public pension and investment funds, and the central bank. The consolidated balance sheet reveals increasing reliance on a carry trade in which risky, increasingly foreign assets are financed with safe, low-yielding domestic liabilities. This strategy has generated a favorable return spread and strengthened public net worth. However, present-value accounting shows that projected government and pension deficits substantially exceed the public sector’s accumulated financial wealth. A VAR-based simulation similarly indicates that persistent structural deficits eventually overwhelm the returns from public assets and drive consolidated net worth deeply negative. Financial repression can delay this deterioration but cannot restore fiscal sustainability; moreover, it shifts the cost disproportionately to less financially sophisticated depositors. Neither the carry trade nor financial repression can substitute for fiscal and pension reform.","also_at":[],"analysis":null,"authors":["YiLi Chien","Hyungsuk Lee","Junsang Lee"],"date":"2026-08-29","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":["tag corrected from EM: tagged EM but the text names only advanced economies (Korea)"],"group":"regional-fed","id":"23ccc4a033a892c2","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":6,"screen_reason":"Examines Korea's public-sector carry-trade strategy, shedding light on fiscal sustainability and sovereign balance-sheet risks in an emerging market.","screening_tag":"DM","selected_in":[],"source":"fed-st-louis","source_name":"Federal Reserve Bank of St. Louis","tag":"DM","tag_inferred":false,"title":"Can the Public Carry Trade Restore Fiscal Sustainability? Evidence from Korea's Consolidated Balance Sheet","url":"https://ideas.repec.org/p/fip/fedlwp/103774.html"},{"abstract":"This paper examines UK mortgage refinancing around the 23 September 2022 mini-budget interest rate shock, exploiting predetermined expiry dates of discounted two and five year fixed-rate mortgages. We find: (a) a shift toward two-year fixes, even though they priced above five-year mortgages; and (b) deleveraging, with a 200 basis points rate rise linked to a 2–3 percentage points drop in average loan to value ratios. Although the adjustable-rate mortgage share increased, most borrowers still chose the pricier two-year fix, consistent with seeking rate risk protection plus near-term flexibility for equity extraction if rates fall, an interpretation supported by evidence that near-term equity extraction is likelier under two than five-year loans.","also_at":[],"analysis":null,"authors":["Philippe Bracke","João F. Cocco","Elena Markoska","Purnoor Tak"],"date":"2026-08-28","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"fded4c14eaacb985","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"The analysis of mortgage refinancing behavior following an interest rate shock provides insights into household financial resilience and monetary policy transmission.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":false,"title":"Locking in the rate or staying flexible? Mortgage refinancing around an interest rate shock","url":"https://ideas.repec.org/p/boe/boeewp/023579.html"},{"abstract":"What is the socially optimal long-run size of the central bank balance sheet, once interest rates are away from the effective lower bound and the balance sheet is no longer needed for monetary stimulus? I introduce a central bank into a model in which banks are liquidity mismatched and prone to sudden ‘bank runs’. Supplying central bank reserves reduces the likelihood and severity of runs, but comes at a cost: constraints on the set of securities the central bank can hold mean a larger balance sheet crowds out private investment and misallocates capital. I calibrate the model to pre-financial crisis conditions and empirical estimates of the non-linear reserve demand curve, and compute optimal policy. Under full information, it is optimal to expand reserve supply to the point where reserve demand is satiated, but no further. However, because under-supplying reserves is more costly than over-supplying them, robustness to parameter uncertainty calls for an additional buffer in reserve supply. But even for high degrees of robustness, the buffer needed is no larger than two and a half percentage points of bank assets. The policy prescription remains restrained: robustness moves the balance sheet modestly beyond satiation, but fails to justify an open-ended provision of abundant reserves.","also_at":[],"analysis":null,"authors":["William Pagel"],"date":"2026-08-28","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"ab3938129daf4be8","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":6,"screen_reason":"Evaluates optimal central-bank balance-sheet size post-ELB, with implications for reserve policy and banking stability in advanced economies.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":true,"title":"A welfare analysis of the central bank balance sheet","url":"https://ideas.repec.org/p/boe/boeewp/023578.html"},{"abstract":"We find that whether US import tariffs have supply-side effects or demand-side effects on US manufacturing sectors depends on where the affected sectors are located in the US production network. Using local projections in a panel of US manufacturing sectors, we find that US import tariffs - including the 2018-19 tariff hikes - led to sectoral output contractions via two different channels: (1) Tariff increases act as negative supply shifters for sectors that use goods from tariff-facing sectors as input in production and thus face rising input costs. (2) Tariff increases act as negative demand shifters for sectors whose customer sectors suffer negative supply side effects due to tariffs and reduce their production. We show that these results are consistent with a stylized production network model featuring complementarities in production. Overall, our finding suggests that tariffs markedly reduce US manufacturing production and that the role of input-output linkages is key for understanding the transmission of import tariff shocks to output and producer prices.","also_at":[],"analysis":null,"authors":["Khalil, Makram","Rouillard, Pierre M.","Strobel, Felix"],"date":"2026-08-28","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"69d7e5fa4e946c7a","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"Shows how US tariffs affect manufacturing output and prices via input-output links, directly relevant to policy and markets.","screening_tag":"DM","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"DM","tag_inferred":false,"title":"Import tariff transmission in a production network","url":"https://ideas.repec.org/p/zbw/bubdps/343558.html"},{"abstract":"In a turbulent world, effective policy requires granular estimates of firm responses to shocks as they unfold. We develop a replicable framework that combines high-frequency administrative and survey microdata with a pre-registered shift-share design to estimate multi-margin firm responses in real time. We show that the resulting coefficient vectors can be interpreted as first-order perturbations of firms’ optimal-response functions. We apply the framework to the 2021–23 UK energy price shock and find that energy-intensive firms pass on cost increases, build cash reserves and shift towards homeworking. We find little evidence of aggregate employment losses or firm exits. Responses are highly heterogeneous: small firms drive price pass-through; large firms, capital investment. We show that our real-time estimates are consistent with the UK’s structural business survey, released two years later, and across survey instruments. We apply the framework out of sample and in real time to the energy price shock triggered by the 2026 US–Israeli strikes on Iran and discuss implications for the design of energy support schemes and environmental policy.","also_at":[],"analysis":null,"authors":["Thiemo Fetzer","Christina Palmou","Jakob Schneebacher","Ivan Yotzov"],"date":"2026-08-28","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"2c8b477893d41f68","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"The paper introduces a real-time framework for assessing firm-level responses to economic shocks, which is valuable for policy design and monitoring.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":false,"title":"How do firms cope with economic shocks in real time?","url":"https://ideas.repec.org/p/boe/boeewp/023580.html"},{"abstract":"Most housing research relies on a single-margin model where a single housing price relates to a single housing quantity. We generalize this approach by introducing income inequality and housing quality. Two important challenges to studying housing supply (and demand) emerge: First, there is no singular housing supply function, instead there is a continuum of unit-supply functions indexed by quality. This implies that supply elasticity estimates are local average treatment effects (LATEs), not structural elasticities. Second, spillovers common in spatial settings may preclude even the LATE interpretation of estimates, which are instead local general equilibrium objects. Critically, these issues cannot be bypassed by using the land share of value to measure supply constraints as it is not even a diagnostic for supply constraints in the standard model. We suggest that understanding heterogeneity in incomes and housing services quality is likely critical to understanding housing markets more generally.","also_at":[],"analysis":null,"authors":["Schuyler Louie","John Mondragon","Rami Najjar","Johannes F. Wieland"],"date":"2026-08-27","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"feba75c3975ea4df","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":4,"screen_reason":"Provides a new theoretical framework for housing supply heterogeneity, mainly methodological with limited immediate market impact.","screening_tag":"Transversal","selected_in":[],"source":"fed-san-francisco","source_name":"Federal Reserve Bank of San Francisco","tag":"Transversal","tag_inferred":false,"title":"Quality, Inequality and Understanding Housing Markets","url":"https://ideas.repec.org/p/fip/fedfwp/103704.html"},{"abstract":"Following decades of secular decline, many estimates of r∗—the natural or steady-state short-term real interest rate—have risen roughly 1 percentage point since 2020 in the United States. The most prominent explanations attribute this reversal to heightened expectations of rising government debt and faster productivity growth from artificial intelligence (AI). However, a high-frequency event study finds that news about fiscal and AI developments does not explain this increase. Furthermore, contrary to earlier evidence that persistent shifts in longer-term yields occurred around monetary policy meetings, we find that monetary policy news does not account for the recent rise in r∗.","also_at":[],"analysis":null,"authors":["Jens H. E. Christensen","Glenn D. Rudebusch"],"date":"2026-08-27","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"6445472af699a715","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Finds fiscal, AI, and monetary news do not explain the recent US rise in r*, impacting expectations for real rates and bond markets.","screening_tag":"DM","selected_in":[],"source":"fed-san-francisco","source_name":"Federal Reserve Bank of San Francisco","tag":"DM","tag_inferred":false,"title":"Can Fiscal, AI, or Monetary News Explain the Rise in r∗?","url":"https://ideas.repec.org/p/fip/fedfwp/103705.html"},{"abstract":"Central bank communications frequently contain information about financial-market backstops that affect monetary policy transmission. We identify these transmission protection surprises in the euro area, alongside policy stance and central bank information surprises, by exploiting heteroskedasticity in minute-by-minute asset price movements. Unlike standard factor models, our approach allows active policy dimensions and their impacts to vary across events. Event-specific decompositions quantify the narrative record and reveal substantial heterogeneity of effects across announcements. We show that transmission protection is a distinct dimension of central bank announcements, with financial-market effects separate from both policy stance and information shocks.","also_at":[],"analysis":null,"authors":["Christoph Grosse Steffen","Stéphane Lhuissier","Daniel J. Lewis"],"date":"2026-08-26","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"b79b40ed167922ea","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"Identifies distinct transmission-protection surprises in ECB announcements, with clear market-impact implications.","screening_tag":"DM","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"DM","tag_inferred":false,"title":"The Missing Surprise: Transmission Protection in Central Bank Announcements","url":"https://ideas.repec.org/p/bfr/banfra/1061.html"},{"abstract":"We measure how workers use genAI for their jobs in a nationally representative survey linking genAI adoption to detailed occupations and tasks. Our data provide the first task-level genAI adoption indexes, which we show can inform analyses of genAI's labor market impact. Exposure scores explain some, but far from all, of the variation in adoption across occupations and tasks. We also distinguish our indexes from measures based on genAI platform chat logs, which differ conceptually and tend to over-classify chats into generic activities spanning many occupations. Finally, we highlight that current adoption is widespread but shallow: genAI is used across many occupations and tasks, yet within most of them, fewer than half of workers adopt. This indicates substantial variation among workers doing very similar work, suggesting that understanding who adopts may matter as much as understanding which tasks genAI assists.","also_at":[],"analysis":null,"authors":["Alexander Bick","Adam Blandin","David Deming","Tyler Schumacher"],"date":"2026-08-25","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"fc237173f91def2b","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":6,"screen_reason":"Measuring generative AI adoption at the task level helps assess the potential labor market impacts and productivity implications of new technology.","screening_tag":"Transversal","selected_in":[],"source":"fed-st-louis","source_name":"Federal Reserve Bank of St. Louis","tag":"Transversal","tag_inferred":false,"title":"What Work Does Generative AI Do?","url":"https://ideas.repec.org/p/fip/fedlwp/103693.html"},{"abstract":"While money has evolved from natural commodities to digital tokens, the debate about the ideal money has remained the same throughout the ages. Historical controversies about the origin, nature, and double-spending of money offer valuable insights for navigating the new forms of money tokens such as cryptocurrencies, central bank digital currencies and stablecoins.","also_at":[],"analysis":null,"authors":["Romain Baeriswyl"],"date":"2026-08-25","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"7849c50970dc4d4d","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":3,"screen_reason":"Historical discussion of money concepts offers limited immediate market or policy insight.","screening_tag":"Transversal","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"Transversal","tag_inferred":false,"title":"Yesterday's controversies for tomorrow's money","url":"https://ideas.repec.org/p/snb/snbwpa/2026-10.html"},{"abstract":"Trade financing through export credit agencies is a key tool of modern industrial policy. We provide a theory to evaluate its welfare effects, and we study its causal impact on trade, firm investment, and capital misallocation by using the effective shutdown of the US export credit agency from 2015 to 2019 as a natural experiment. First, we show that the US Export-Import Bank (EXIM) has large causal effects: comparing industries exposed and unexposed to the shutdown, we find that exposed industries experience a product-level export reduction of approximately $4.49 for each $1 lost in EXIM financing. EXIM-dependent firms also experience substantial contractions in revenues, investment, and employment. Second, shutting down EXIM increases capital misallocation because firms with high marginal revenue product of capital (MRPK) disproportionately contract while low-MRPK firms are largely unaffected. Terms-of-trade adjustments and freeing capital for domestic producers do not appear to offset these losses empirically. Our results indicate that even in advanced economies with developed financial markets, industrial policy that lowers financing constraints for exporters can raise output, improve capital allocation, and generate welfare gains.","also_at":[],"analysis":null,"authors":["Poorya Kabir","Adrien Matray","Karsten Müller","Chenzi Xu"],"date":"2026-08-24","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"9d23ba709934c670","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"Shows US export credit policy sharply affects trade, investment and capital allocation, directly informing policy and market outlooks.","screening_tag":"DM","selected_in":[],"source":"fed-atlanta","source_name":"Federal Reserve Bank of Atlanta","tag":"DM","tag_inferred":false,"title":"Industrial Policy and Capital Misallocation in Exporting","url":"https://ideas.repec.org/p/fip/fedawp/103700.html"},{"abstract":"While unemployment insurance systems are widely used to insure workers against income losses after separations, it is well known that they can inefficiently increase separations in the labor market. There are two distinct policy instruments commonly used by governments that can counter this known problem: layoff taxes and short-time work schemes. This study provides a search-and-matching model to evaluate which of the two is the better policy tool. We show that if only a few firms are financially constrained, layoff taxes are better because they do not distort working hours in the economy. With a large share of financially constrained firms, short-time work emerges as the superior tool, as layoff taxes cannot deter separations in financially constrained firms. Additionally, short-time work can help provide insurance against income losses to risk-averse workers that constrained firms cannot afford to provide in their wage contracts. Calibrating the model to the US economy, we find that short-time work is the superior policy instrument if at least 27.5 percent of firms in the economy are financially constrained. Finally, we show that combining both instruments can dominate either policy in isolation when sufficiently many firms of both types are present in the economy.","also_at":[],"analysis":null,"authors":["Gero Stiepelmann","Johannes Weber"],"date":"2026-08-24","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"845b1a8e1b9c40a0","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":5,"screen_reason":"Compares short-time work and layoff taxes in the US, offering policy insights but with modest direct market relevance.","screening_tag":"DM","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"DM","tag_inferred":false,"title":"Carrots or Sticks? Short-Time Work vs. Layoff Taxes","url":"https://ideas.repec.org/p/fip/fedcwq/103754.html"},{"abstract":"I propose a novel method to reliably estimate the conditional pricing kernel by incorporating conditioning variables. The VIX and the term spread are most informative variables for identifying state prices. The conditional kernel estimate exhibits significant time variation: the more favorable market expectations, the higher state prices in negative return states. During bad times, the equity premium implied by the conditional kernel is fully attributable to compensation for left-tail scenarios, in contrast to findings from the unconditional kernel. Lastly, the conditional kernel estimate yields superior out-of-sample option pricing performance compared to the unconditional kernel estimate.","also_at":[],"analysis":null,"authors":["Hyung Joo Kim"],"date":"2026-08-24","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"5b41cea3fcd3857b","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"A new method for estimating the conditional pricing kernel improves understanding of equity risk premia and option pricing, relevant for market participants.","screening_tag":"Transversal","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"Transversal","tag_inferred":false,"title":"Characterizing the Conditional Pricing Kernel: A New Approach","url":"https://www.federalreserve.gov/econres/feds/characterizing-the-conditional-pricing-kernel-a-new-approach.htm"},{"abstract":"Do capital gains tax cuts destabilize or stabilize asset prices? In an asset pricing model with heterogeneous agents and realization-based taxation, a tax cut has two opposing effects. It dampens volatility by reducing realization-based trading frictions, but also amplifies it by strengthening the pass through from expectations to prices, fuelling self-fulfilling fluctuations. Estimated on US stock-market data, the model implies that the sequence of tax cuts since the 1970s triggered a net increase in volatility of about +35%, driven primarily by stronger belief-to-price pass-through. Policy experiments suggest a tax on unrealized gains robustly reduces volatility, whereas a financial transaction tax has mixed effects.","also_at":[],"analysis":null,"authors":["Pau Belda"],"date":"2026-08-21","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"abd5b5143d2f0a35","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Links US capital-gains tax changes to stock-price volatility, offering clear policy-market implications.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":false,"title":"Capital gains taxation and asset price volatility","url":"https://ideas.repec.org/p/boe/boeewp/023541.html"},{"abstract":"This paper investigates the financial materiality of nature-related legal disputes, focusing on biodiversity loss, pollution, and ecosystem degradation. We analyze whether firms targeted by nature litigation experience statistically significant declines in market valuation using a dataset of 48 litigation (123 event dates) against 22 major companies in North America and Europe (1996–2025). Employing an event study methodology with the Fama-French three-factor model, we calculate Cumulative Abnormal Returns (CAR) over a [-5, +5] day window. Our results demonstrate that markets price in the impact of these events, leading to significant valuation declines following litigation decisions. In Europe, stock corrections occur immediately upon the filing of a complaint, suggesting a 'reputational premium' driven by investor ESG sensitivity. In North America, however, ruling/settlement dates yield larger market shocks, reflecting heavier financial penalties. Furthermore, we find evidence of sectoral spillover effects, where litigation against a single firm triggers negative contagion across the industry. The findings emphasize the necessity for financial institutions to integrate nature-related legal liabilities into their risk management frameworks.","also_at":[],"analysis":null,"authors":["Stéphane Dees","Eve Hanoune","Oriane Wegner"],"date":"2026-08-21","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"a650b9fc2a93332a","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Analyzes the financial materiality of nature-related litigation, offering insights into ESG-driven market reactions and sectoral contagion risks.","screening_tag":"DM","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"DM","tag_inferred":false,"title":"Jus naturale : The Impact of Nature-Related Litigation on Corporate Valuation","url":"https://ideas.repec.org/p/bfr/banfra/1060.html"},{"abstract":"We investigate Barro's random walk hypothesis according to which distortionary labor taxes should follow a random walk for any stochastic process of government expenditures, see Barro (1979). When agents experience cognitive discounting as in Gabaix (2020), they perceive government debt as wealth, and the random walk result breaks down except for knife-edge combinations of limited rationality by policymakers and the private sector. For these specific parameter values, the result can reemerge, but minor deviations from these knife-edge combinations lead to stationary equilibrium dynamics, reflecting the wealth effect of government debt. However, the dynamics turn explosive when policymakers discount the future excessively. Our results extend to other models with limited foresight such as Blanchard (1985), Weil (1989), or Woodford (2019).","also_at":[],"analysis":null,"authors":["Martin Bodenstein","Junzhu Zhao"],"date":"2026-08-21","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"921ed3fe31bc1775","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":5,"screen_reason":"The paper explores how cognitive discounting affects fiscal and monetary policy outcomes, offering theoretical insights into debt sustainability and policy dynamics.","screening_tag":"Transversal","selected_in":[],"source":"fed-ifdp","source_name":"Federal Reserve Board, IFDP","tag":"Transversal","tag_inferred":false,"title":"Optimal Monetary and Fiscal Policy under Limited Foresight","url":"https://ideas.repec.org/p/fip/fedgif/103681.html"},{"abstract":"How does higher productivity affect inflation? Productivity shifts both supply and demand (through real incomes), and its effect on inflation depends on their relative magnitude and timing, as well as on the monetary policy response. We distinguish between a one-off level shock that increases productivity temporarily (relative to trend) and a persistent rise in productivity growth. A one-off, temporary increase in productivity lowers marginal costs and raises potential output, generating downward pressure on the price level. Once prices adjust however, inflation returns to target. By contrast, higher productivity growth raises expected permanent income and stimulates investment and consumption, increasing the natural real rate. Absent a tightening of monetary policy, inflationary pressures may emerge. Anticipation effects are central: if demand rises ahead of realised supply gains, inflation can increase despite higher productive capacity. In an open economy, the sectoral incidence of the shock also determines the impact on inflation. In summary, the inflationary consequences of productivity gains are a priori ambiguous and depend on the balance and timing of demand and supply responses, the composition of demand, and crucially, the monetary policy response.","also_at":[],"analysis":null,"authors":["Ludovica Ambrosino","Jenny Chan","Silvana Tenreyro"],"date":"2026-08-21","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"16280fde4185a93f","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Analyzes how productivity shocks influence inflation and real rates, relevant for monetary policy and market expectations.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":true,"title":"Productivity and inflation dynamics","url":"https://ideas.repec.org/p/boe/boeewp/023542.html"},{"abstract":"Labor market variables frequently send conflicting signals about the degree of slack or tightness, often complicating policy assessments at critical junctures. This paper develops a Structural Labor Market Indicator (SLMI) for the U.S. economy that addresses the limitations of existing univariate measures or atheoretical statistical approaches that synthesize multiple labor market indicators but cannot distinguish between supply and demand driving forces. We construct the SLMI using a medium scale New Keynesian DSGE model featuring search and matching frictions, endogenous labor force participation, and variable hours. The model is disciplined by a comprehensive dataset that includes not only labor market variables but also other macroeconomic aggregates. The SLMI synthesizes model-implied gaps across multiple labor market dimensions using principal component analysis. We show that GDP growth and inflation provide substantial information about labor market slack beyond what labor market variables contain, validating our multi-variable structural approach. Relative to alternative measures, the SLMI often provides earlier warnings of deteriorating conditions at recession onset but recovers more gradually during expansions.","also_at":[],"analysis":null,"authors":["Isabel Cairó","Hess Chung","Francesco Ferrante","Cristina Fuentes-Albero","Camilo Morales-Jimenez","Damjan Pfajfar"],"date":"2026-08-20","date_kind":"published","date_precision":"day","date_source":"feed date","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"2ce8259667310c43","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":6,"screen_reason":"Introduces a structural labor-market indicator for the US, aiding policy assessment and recession forecasting.","screening_tag":"DM","selected_in":[],"source":"fed-feds","source_name":"Federal Reserve Board, FEDS","tag":"DM","tag_inferred":false,"title":"Beyond the Unemployment Rate: A Structural Labor Market Indicator","url":"https://www.federalreserve.gov/econres/feds/beyond-the-unemployment-rate-a-structural-labor-market-indicator.htm"},{"abstract":"Job mobility is risky, workers are risk averse, and insurance markets are incomplete. This paper studies how these features curb and distort job-to-job transitions by making workers excessively cautious, placing too much weight on job safety over wage and productivity gains. We demonstrate this tradeoff by eliciting employed workers’ wage-safety indifference curves in a custom, representative survey. On average, employed U.S. workers require a 1.63 percent pay raise to accept each additional percentage point of annual unemployment risk in a new job. We assess the macroeconomic consequences of our mechanism by embedding it into a general equilibrium search model. Jobs differ in both wages (productivity) and unemployment risk, and risk-averse workers self-insure against unemployment risk through a non-state-contingent bond while searching on and off the job. We find that a complete markets counterfactual would boost job mobility by 12 percent and productivity by 0.19 percent. We also highlight a new role for unemployment insurance—encouraging employed workers to accept risky but high-productivity offers, thereby increasing productivity (by 1.3 percent) and job creation, as well as job loss and unemployment.","also_at":[],"analysis":null,"authors":["Alex Clymo","Piotr Denderski","Yusuf Mercan","Benjamin Schoefer"],"date":"2026-08-19","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"63686d74fb78574d","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":5,"screen_reason":"Examines job-mobility frictions in the US and their macro productivity impact, a tangential labor-market insight.","screening_tag":"DM","selected_in":[],"source":"fed-kansas-city","source_name":"Federal Reserve Bank of Kansas City","tag":"DM","tag_inferred":false,"title":"Cautious Careers: Job Mobility Under Incomplete Markets","url":"https://ideas.repec.org/p/fip/fedkrw/103670.html"},{"abstract":"We develop a general-equilibrium model of the global economy that integrates heterogeneous firms competing in product markets with countries that allocate capital around the world. Combining a hedonic demand system on the product side with a mean-variance portfolio system on the asset side, we obtain almost closed-form solutions for the equilibrium of the model. We use firm-level data on balance sheets, geographic breakdowns of revenue and employment, and business descriptions along with country-level data on bilateral equity holdings and trade costs to quantify the model to a cross section of roughly 23,000 listed firms in 48 countries. We use the model to evaluate the reallocation and welfare effects of globalization. Both financial and trade liberalization concentrate activity among the largest firms and raise welfare, with gains being larger in emerging and mid-sized open economies respectively. Product- and capital-market frictions amplify each other, meaning that liberalizing one market reduces the gains from liberalizing the other.","also_at":[],"analysis":null,"authors":["Loukas Karabarbounis","Bruno Pellegrino","Juliana Salomao"],"date":"2026-08-19","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"61562209a596df52","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":6,"screen_reason":"Global firm-capital market model quantifies welfare effects of trade/financial liberalisation, relevant to both EM and DM outlooks.","screening_tag":"Transversal","selected_in":[],"source":"fed-minneapolis","source_name":"Federal Reserve Bank of Minneapolis","tag":"Transversal","tag_inferred":false,"title":"A Model of Global Firms and Capital Markets","url":"https://ideas.repec.org/p/fip/fedmwp/103674.html"},{"abstract":"The pandemic catalyzed an enduring shift to remote work. To measure this shift, we develop a large language model (LLM), fine tune and assess it using 30,000 human classifications, and apply it to nearly 600 million job vacancy postings across five English-speaking countries. Our model achieves a 98% classification accuracy, greatly outperforming dictionary-based approaches, and matching or surpassing the performance of frontier AI models at a fraction of the cost. From 2019 to 2026, the share of postings that indicate new employees can work remotely at least one day per week rose more than three-fold in the U.S. and by a factor of five or more in Australia, Canada, New Zealand and the U.K. These developments are highly non-uniform across and within cities, industries, occupations and companies. Even when focusing on employers in the same industry competing for talent in the same occupations, we find large differences in the share of job postings that explicitly offer remote work.","also_at":[],"analysis":null,"authors":["Nicholas Bloom","Steven J. Davis","Stephen Hansen","Peter John Lambert","Yabra Muvdi","Raffaella Sadun","Bledi Taska"],"date":"2026-08-19","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"34ea89e6a31ef3ef","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"The paper provides a large-scale empirical analysis of remote work trends across five advanced economies, which is highly relevant for labor market and productivity outlooks.","screening_tag":"DM","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"DM","tag_inferred":false,"title":"Remote Work Across Jobs, Companies and Space","url":"https://ideas.repec.org/p/fip/feddwp/103689.html"},{"abstract":"Trade flows are volatile and notoriously difficult to predict. This paper introduces trimmed import and export growth rates for the United States to help improve trade forecasts. We calculate the growth rates as a trimmed mean that strips out subcomponents with less predictive power. By separating the signal from the noise, our trimmed growth rates provide a better perspective on where aggregate imports or exports are heading, particularly at horizons four to 12 months ahead. Consequently, out-of-sample forecasts based on our trimmed growth rates reduce forecast errors by up to 15 percent relative to forecasts from aggregate import or export growth. These trimmed forecasts are simple to compute, outperform both naive forecasts and models that rely on a richer information set, and are particularly useful during episodes with heightened volatility. We update the trimmed growth rates monthly and make them publicly available.","also_at":[],"analysis":null,"authors":["Thomas R. Cook","Mariia Dzholos","Johannes Matschke"],"date":"2026-08-18","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"e2601ad63951592d","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Provides improved US import/export forecasts, directly useful for trade-related market predictions.","screening_tag":"DM","selected_in":[],"source":"fed-kansas-city","source_name":"Federal Reserve Bank of Kansas City","tag":"DM","tag_inferred":false,"title":"Introducing Trimmed Imports and Exports","url":"https://ideas.repec.org/p/fip/fedkrw/103656.html"},{"abstract":"This paper investigates whether supervisory climate stress tests change how euro-area banks price and allocate credit according to borrowers’ transition risk. We combine loan-level data from the Eurosystem’s AnaCredit database with a firm-level measure of greenhouse-gas (GHG) intensity and compare banks subject to the ECB’s 2021-22 climate stress test with non-participating banks. A difference-in-differences-in-slopes design estimates whether the sensitivity of new-loan spreads to carbon intensity changed after the exercise. The average shift in this spread-intensity relationship is small and statistically insignificant. However, decomposing the aggregate effect reveals economically meaningful and offsetting adjustments. Participating banks reallocate new credit away from more carbon-intensive incumbent borrowers, while applying more carbon-sensitive pricing to relationships that enter or exit their portfolios; for new borrowers, a one-standard-deviation increase in carbon intensity is associated with about 10 basis points higher spreads. By contrast, repricing within continuing bank-firm relationships remains limited. The effects are strongest among the most carbon-intensive firms, and participation in the more demanding bottom-up module does not generate a clearly additional response. Overall, climate stress tests appear to operate mainly through portfolio recomposition and extensive-margin pricing, consistent with an information-and-supervisory-scrutiny channel rather than a broad repricing of existing loans.","also_at":[],"analysis":null,"authors":["Olivier de Bandt","David Nefzi","Johannes-Gabriel Werner"],"date":"2026-08-18","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"a840b5f487b42a8d","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Evaluates ECB climate stress-test effects on bank pricing, directly linked to policy and credit markets.","screening_tag":"DM","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"DM","tag_inferred":false,"title":"Stress Testing European Banks’ Transition Risk and Lending Behavior","url":"https://ideas.repec.org/p/bfr/banfra/1059.html"},{"abstract":"Central bank collateral policy specifies which assets banks can pledge as collateral to obtain central bank funding and is an important determinant of liquidity in the banking system. We propose a high-frequency identification approach to study the systematic effects of central bank collateral policy on banks, financial markets, and asset prices. We identify collateral policy surprises using intraday bank stock price changes around Eurosystem collateral policy announcements. Expansionary collateral policy surprises lead to excess returns of bank stocks, a decline in common volatility measures, and a reduction in bank default risk, in particular for riskier banks. They also compress core-periphery government bond spreads, even for policy changes that are unrelated to the collateral treatment of government bonds. The uneven transmission of collateral policy through banks to sovereign bond markets is distinct from both central bank asset purchases and conventional monetary policy.","also_at":[],"analysis":{"correction":null,"current_prompt":false,"evidence":"Eurosystem collateral policy announcements","flags":[],"in_issue":false,"rationale":"The study focuses on the Eurosystem and European banks, an advanced-economy setting.","relevance_note":"Understanding collateral policy shocks helps policymakers gauge liquidity effects and informs market participants about potential impacts on bank valuations and sovereign spreads.","summary":"The paper develops a high-frequency method to detect unexpected changes in central-bank collateral rules and examines how these surprises affect banks, markets, and asset prices. It finds that expansionary collateral surprises boost bank stock returns, lower volatility and default risk, especially for riskier banks, and narrow sovereign bond spreads.","takeaways":["Expansionary collateral surprises raise bank stock excess returns","They reduce common volatility measures and bank default risk","Riskier banks benefit more from collateral policy shocks","Core-periphery government bond spreads compress after surprises"],"wording_correction":null},"authors":["Hüttl, Pia","Ider, Gökhan","Kaldorf, Matthias"],"date":"2026-08-18","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"609326bc020df364","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":9,"screen_reason":"Identifies collateral policy surprises’ impact on bank stocks and sovereign spreads, offering clear market-relevant insights.","screening_tag":"DM","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"DM","tag_inferred":false,"title":"Collateral policy surprises","url":"https://ideas.repec.org/p/zbw/bubdps/343110.html"},{"abstract":"I develop a dynamic quantitative spatial framework that combines key features of quantitative spatial and lifecycle housing models to study the distributional effects of spatially heterogeneous shocks. The model features many locations, moving costs, uninsurable income risk, lifecycle dynamics, housing tenure choice and housing frictions. The model is set in continuous time, which enables efficient computation. I apply the framework to analyze the welfare effects of heterogeneous productivity shocks across U.S. cities. I find that local productivity shocks have important distributional consequences: on average, a 1% shock to local productivity raises residents’ welfare by 0.37%. The pass-through from a local productivity shock to welfare varies substantially by age and housing tenure. I show that homeownership plays a central role in spatial redistribution: in an otherwise identical model without homeownership, the average welfare effect of a 1% local productivity shock is just 0.03%. This is because house price changes counteract the welfare effects of wage changes for renters, but augment them for owners. These results suggest that accounting for homeownership is essential for understanding the distributional effects of spatially heterogeneous shocks.","also_at":[],"analysis":null,"authors":["Brian Greaney"],"date":"2026-08-18","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"3dccb46576ef6245","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":5,"screen_reason":"Studies how US local productivity shocks affect welfare via homeownership, offering distributional but limited market relevance.","screening_tag":"DM","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"DM","tag_inferred":false,"title":"Homeownership and the Distributional Effects of Local Shocks","url":"https://ideas.repec.org/p/fip/feddwp/103688.html"},{"abstract":"The spatial distribution of wealth in the United States is very heterogeneous. We study the spatial distribution of wealth in a country and how it is shaped by regional earning characteristics and mobility frictions. For this, we develop a tractable model of consumption, savings and location choice with many regions, incomplete markets and heterogeneous agents facing persistent and transitory income shocks. Our theory extends a workhorse macroeconomic model of consumption and savings under uncertainty to an economy with multiple labor markets and costly mobility. Despite complex spatial and individual heterogeneity, we characterize the optimal consumption, savings and mobility decisions of workers in closed form. Mobility frictions increase precautionary savings as workers hedge against consumption fluctuations generated by moving decisions. The spatial distribution of wealth is primarily driven by the interaction between persistent income shocks, saving behavior and worker sorting over locations. Our results highlight the importance of accounting for worker mobility and regional heterogeneity in earnings dynamics when studying the spatial distribution of wealth.","also_at":[],"analysis":null,"authors":["Maximiliano Dvorkin","Brian Greaney"],"date":"2026-08-17","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"ddc3da4c19df5ad5","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":5,"screen_reason":"Analyzes US regional wealth and mobility, offering limited macro insight for policy.","screening_tag":"DM","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"DM","tag_inferred":false,"title":"The Geography of Wealth: Shocks, Mobility and Precautionary Savings","url":"https://ideas.repec.org/p/fip/feddwp/103686.html"},{"abstract":"This article documents the erosion of Portugal’s public capital stock since 2013 and assesses its macroeconomic implications. I extend the IMF capital series through 2027 using European Commission data and construct scenarios through 2035 for alternative infrastructure-project pipelines. In 2026, the stock is projected to remain 12.2 percent below its 2013 peak, while its ratio to GDP is projected to fall from 77.2 percent in 2013 to 52.6 percent. Short-horizon regressions show positive co-movement between public-capital and labor-productivity growth. A calibrated production-function exercise suggests that the capital decline may reduce 2026 GDP per capita by 0.7–5.3 percent, with a central estimate of 1.4 percent. Announced investment projects slow, but do not reverse, the projected decline in the capital-to-GDP ratio.","also_at":[],"analysis":null,"authors":["Miguel Faria-e-Castro"],"date":"2026-08-17","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"c430109b2a81628b","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":6,"screen_reason":"Shows how public-capital erosion could lower Portuguese growth, relevant for EU fiscal outlook.","screening_tag":"DM","selected_in":[],"source":"fed-st-louis","source_name":"Federal Reserve Bank of St. Louis","tag":"DM","tag_inferred":false,"title":"The Erosion of Public Capital in Portugal","url":"https://ideas.repec.org/p/fip/fedlwp/103629.html"},{"abstract":"What prevents productivity gains from translating into wages? This paper examines the roles of deflation and labor market frictions, with particular emphasis on job security, in driving the widening wage-productivity gap. Our empirical analysis shows that wage-setting in Japan was rigid in both upward and downward directions during the deflationary period, with upward rigidity being more pronounced. These wage freezes suppressed wage growth and contributed to the widening wage-productivity gap. Using a heterogeneous-firm general equilibrium model, we show that downward nominal wage rigidity, together with deflation and an emphasis on job security, suppresses wage growth and widens the wage-productivity gap by inducing firms to impose larger wage markdowns. Alleviating these factors raises not only wages but also aggregate productivity through labor reallocation across firms.","also_at":[],"analysis":null,"authors":["Nobuhiro Abe","Ryuichiro Hirano","Sohei Kaihatsu"],"date":"2026-08-14","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":["tag corrected from EM: tagged EM but the text names only advanced economies (Japan)"],"group":"g10-central-bank","id":"fec4deab1aa93a49","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"The paper examines the link between deflation, labor market rigidity, and wage growth in Japan, offering valuable lessons for understanding wage-productivity dynamics.","screening_tag":"DM","selected_in":[],"source":"boj","source_name":"Bank of Japan Working Papers","tag":"DM","tag_inferred":false,"title":"What Prevents Productivity Gains from Translating into Wages: Lessons from Japan's Deflationary Period","url":"https://ideas.repec.org/p/boj/bojwps/wp26e12.html"},{"abstract":"Cloud outsourcing may alter competition in banking by allowing smaller competitors to access scalable digital infrastructure. This paper studies the effects of banks’ outsourcing agreements with Cloud Service Providers (CSPs) in the UK banking sector using proprietary bank-provider contract data. We find that CSP spending is associated with lower operating costs and higher deposits, with reduced-form effects concentrated among large institutions. We also find that increases in capital requirements are associated with higher CSP spending, consistent with large institutions using CSP adoption to reduce dependence on legacy IT systems, improve operational efficiency, and strengthen long-term franchise value. We then estimate a structural model of competition in the UK deposit market to quantify depositor-demand effects from CSPs. We find that the demand-side benefits of CSP adoption are substantially larger for small and medium banks and building societies. We use the model to conduct two counterfactual analyses. First, we simulate a scenario in which cloud outsourcing was restricted prior to its widespread adoption. The counterfactual implies higher market concentration, lower market shares for smaller institutions, and lower depositor welfare. Second, we analyse a reduction in capital requirements. While lower capital requirements directly increase welfare through funding-cost effects, they also reduce incentives to invest in CSP adoption, offsetting roughly 32% of the direct welfare gain. Our findings suggest that cloud outsourcing has partly reduced technological barriers to competition in banking markets.","also_at":[],"analysis":null,"authors":["Alvaro Contreras","Peter Eccles","Paolo Siciliani"],"date":"2026-08-14","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"d25f6847abd426db","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"The paper analyzes how cloud outsourcing affects banking competition and market concentration, providing direct insights into financial sector digital transformation and policy.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":false,"title":"Outsourcing and competition in the banking sector: the rise of Cloud Service Providers","url":"https://ideas.repec.org/p/boe/boeewp/023540.html"},{"abstract":"I derive an analytical solution to the Kolmogorov forward equation for fixed cost models. This is a challenging PDE because the dynamic distribution depends on the flow of resetting agents, which is endogenously determined by the distribution itself. I show that there is a shortcut that allows the reset flow to be derived without first finding the entire distribution of agents. This shortcut is also valuable because many aggregate variables can be written in terms of the reset flow alone. Steady-state conditional adjustment behavior recovers the entire marginal reset-flow response to a common state shift. As an example, I solve an investment model with fixed costs of adjustment and study the effects of increased productivity growth. Aggregate dynamics can be derived from a one-dimensional weighted distribution of capital gaps. Because of adjustment frictions, the shock causes a boom-lull investment pattern whose shape depends on the shock size.","also_at":[],"analysis":null,"authors":["Jonathan Adams"],"date":"2026-08-14","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"9a3745360ceee0fc","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":4,"screen_reason":"The paper provides an analytical solution for fixed-cost models, which is a useful methodological tool for modeling investment dynamics and aggregate shocks.","screening_tag":"Transversal","selected_in":[],"source":"fed-kansas-city","source_name":"Federal Reserve Bank of Kansas City","tag":"Transversal","tag_inferred":false,"title":"The Dynamic Distribution in the Fixed Cost Model: An Analytical Solution","url":"https://ideas.repec.org/p/fip/fedkrw/103643.html"},{"abstract":"Under which conditions do usability constraints for regulatory capital buffers emerge? To answer this question, we build a non-linear structural banking sector model with a minimum capital requirement that banks are not allowed to breach, and a capital buffer requirement (CBR) that banks can breach but if they do so potential stigma applies. We prove that even very low stigma costs induce large buffer usability constraints, i.e. when faced with losses banks will deleverage significantly to avoid that their capital ratio falls below the CBR. Our findings imply that non-releas ble regulatory capital buffers are unlikely to fully achieve their macro stabilisation goal to support aggregate loan supply when the banking system faces losses.","also_at":[],"analysis":null,"authors":["Lang, Jan Hannes","Menno, Dominik"],"date":"2026-08-14","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"7ffcea9fbe8e3bd4","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Structural model of capital buffer usability highlights constraints on loan supply, relevant for banking stability and policy.","screening_tag":"DM","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"DM","tag_inferred":true,"title":"A structural model of capital buffer usability","url":"https://ideas.repec.org/p/zbw/bubdps/343105.html"},{"abstract":"We document a strong, positive relationship between occupational problem complexity, measured from US data on problem-solving requirements, and occupational wage growth since 1980. In contrast, employment shifts toward more complex occupations have been modest, suggesting a race between the demand for and supply of complex skills. We rationalize these findings by formulating and structurally estimating a quantitative general equilibrium model on the granular occupational level. In our model, workers have heterogeneous comparative advantages in solving complex problems and physical capital admits capital-skill complementarity in occupation space. The equilibrium features Positive Assortative Matching of worker skills to occupational problem complexity, and the model quantitatively explains the evolution of the occupational wage- and employment structure over the last four decades. The model estimates uncover two distinct periods of technological change. Until around 2000, rising complexity premia were driven by capital-skill complementarity and declining equipment capital prices. Post-2000 patterns reflect supply-side technological change whereby occupations became more efficient in utilizing worker skills for complex problem-solving. Our framework helps unify distinct approaches to studying task automation and task augmentation on the one hand and skill-biased technological change on the other.","also_at":[],"analysis":null,"authors":["Colin C. Caines","Florian Hoffmann","Gueorgui Kambourov"],"date":"2026-08-14","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"004ca73937575475","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":6,"screen_reason":"This quantitative analysis of U.S. wage inequality and occupational complexity provides useful context for understanding long-term structural shifts in labor markets.","screening_tag":"DM","selected_in":[],"source":"fed-ifdp","source_name":"Federal Reserve Board, IFDP","tag":"DM","tag_inferred":false,"title":"Occupational Complexity, Capital-Skill Complementarity, and the Evolution of U.S. Wage Inequality: A Quantitative Analysis","url":"https://ideas.repec.org/p/fip/fedgif/103645.html"},{"abstract":"American suburbs are generally characterized by single-family neighborhoods featuring large lots, with few businesses or apartments. To understand the origins of this pattern of development, we construct the first panel dataset of suburban zoning maps and bylaws for a major American metropolitan area and ask how comprehensive land use regulation shaped the form of the suburbs of Chicago today. Our strategy identifies the impact of zoning using land that was undeveloped before such regulations were adopted. The typical post-zoning suburban neighborhood sets aside over 90 percent of land for single-family homes, but adopting the most diverse zoning we observe reduces the single-family share by about half, with most of this land redistributed to businesses and apartments in equal measure. Supply restrictions were also binding earlier than widely believed, and prewar minimum lot size regulations were associated with lots that were 20 percent larger than those that emerged from unregulated markets. Comprehensive land use regulation thus substantially increased the prevalence of single-family residential neighborhoods relative to the suburban form that would have prevailed without zoning, which would have featured more mixed uses and smaller lots.","also_at":[],"analysis":null,"authors":["Ryan Gallagher","Allison Shertzer","Tate Twinam"],"date":"2026-08-13","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"e7959017371beecc","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":6,"screen_reason":"The paper quantifies the impact of zoning regulations on suburban development, providing insights into housing supply constraints and urban economic structure in the U.S.","screening_tag":"DM","selected_in":[],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"DM","tag_inferred":true,"title":"Zoning and the American Suburb","url":"https://ideas.repec.org/p/fip/fedpwp/103638.html"},{"abstract":"We show that AI technologies are oriented toward jobs and workers that typically exhibit greater volatility in labor market outcomes over the business cycle. Occupations currently most exposed to AI are those that have historically exhibited (i) greater volatility in employment levels over business cycles, (ii) higher job-switching rates by workers, (iii) higher job-finding rates, and (iv) a lower likelihood for workers to exit the labor force following a job loss. The sectors of the U.S. economy that produce AI technologies have also historically exhibited high volatility in productivity. We then quantify how technology-led structural changes in economic activities contribute to aggregate business cycle volatility. Growth in the production of AI-based technologies in recent years increased the volatility of U.S. output by 2.8 percent, roughly 3.5 times what resulted from the late 1990s’ IT boom. If the orientation of AI toward occupations that exhibit higher variability in labor market outcomes results in a higher aggregate labor supply elasticity, the effects on aggregate volatility are even greater.","also_at":[],"analysis":null,"authors":["Juan David Munoz Henao","Nicholas Sly"],"date":"2026-08-13","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"9f23758f2b7257cc","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"Links AI-driven tech change to higher US output volatility, directly informing market risk views.","screening_tag":"DM","selected_in":[],"source":"fed-kansas-city","source_name":"Federal Reserve Bank of Kansas City","tag":"DM","tag_inferred":false,"title":"Is the AI Boom Volatility-Biased Technological Change?","url":"https://ideas.repec.org/p/fip/fedkrw/103640.html"},{"abstract":"This study employs firm-to-firm transaction data to identify the multilayered and extensive supply chain structures in Japan's manufacturing sector and quantitatively analyze the characteristics of these supply chain structures. It also investigates the impacts of firm-level shocks, arising from both the supply and demand sides, on the overall manufacturing sector. The analysis reveals that automobile supply chains are exceptionally long and large-scale, with firms at the center of these chains exerting a larger influence on individual suppliers' production activities than in other industries. Furthermore, the findings indicate that supply constraints in products identified as potential bottlenecks can significantly dampen macroeconomic production. The results also highlight that holding inventory can serve as an effective measure to mitigate these impacts to a certain extent.","also_at":[],"analysis":null,"authors":["Ko Adachi","Kosuke Aoki","Yoshiyuki Kurachi","Taiki Ono","Akitoshi Toyoda"],"date":"2026-08-12","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"19ddee5f63003f9b","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Provides granular insights into Japanese manufacturing supply chains and the macroeconomic impact of supply bottlenecks, relevant for industrial policy and supply chain analysis.","screening_tag":"DM","selected_in":[],"source":"boj","source_name":"Bank of Japan Working Papers","tag":"DM","tag_inferred":false,"title":"Mapping Japan's Manufacturing Supply Chains Through Firm-to-Firm Transaction Data","url":"https://ideas.repec.org/p/boj/bojwps/wp26e13.html"},{"abstract":"This paper empirically analyzes the linkages of firm spending behavior along supply chains, with a focus on capital investment and wage-setting, using production network data from Japan's manufacturing sector. The analysis yields the following findings. First, there is evidence of bonus linkages within supply chains, originating from temporary foreign demand shocks. Second, more broadly, the capital investment of firms can be influenced by downstream investment activity in supply chains, whether domestically or internationally. In addition, the determination of regular wages within a firm appears to be influenced by the wage rates set by focal firms within the same supply chains. These results underscore the importance of analyzing firm behavior while taking into account the multilayered supply chain structure centered around large manufacturing firms in order to understand Japan's economic dynamics.","also_at":[],"analysis":null,"authors":["Ko Adachi","Kosuke Aoki","Yoshiyuki Kurachi","Taiki Ono","Akitoshi Toyoda"],"date":"2026-08-12","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":["tag corrected from EM: tagged EM but the text names only advanced economies (Japan)"],"group":"g10-central-bank","id":"09e51e75f0d0e485","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"The paper documents how supply chain linkages transmit investment and wage shocks, offering a granular view of economic dynamics in Japan's manufacturing sector.","screening_tag":"DM","selected_in":[],"source":"boj","source_name":"Bank of Japan Working Papers","tag":"DM","tag_inferred":false,"title":"Linkages of Firm Spending Behavior through Supply Chains","url":"https://ideas.repec.org/p/boj/bojwps/wp26e14.html"},{"abstract":"Financial institutions are required to incorporate a margin of conservatism for the general estimation error (MoC C) into their probability of default (PD) estimates. This paper presents three key contributions to the quantification of MoC C. First, the European banking regulation allows financial institutions to choose between overlapping and nonoverlapping one-year default rates for calculating their calibration targets, i.e., their long run average default rates (LRADRs). When overlapping one-year default rates are used, it is crucial to account for temporal dependencies to accurately calculate MoC C. We provide a MoC C quantification for overlapping one-year default rates. Second, the European Central Bank has established MoC C quantification at grade level rather than at calibration segment level as the standard. However, many financial institutions calculate their LRADRs at calibration segment level rather than at grade level. Therefore, we approximate the confidence level for MoC C quantification at grade level to achieve the same sum of risk weighted exposure amounts as the MoC C at calibration segment level. Third, we corroborate that the common practice of using the maximum likelihood estimator of asset correlation on samples with varying PDs results in a downward bias. We compensate for this downward bias using a simulation approach.","also_at":[],"analysis":null,"authors":["Wosnitza","Jan Henrik"],"date":"2026-08-11","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"dce8c7a1ed223070","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Addresses technical regulatory requirements for bank capital adequacy, specifically regarding the quantification of margins of conservatism in PD estimates.","screening_tag":"DM","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"DM","tag_inferred":false,"title":"Quantification of margin of conservatism category C: Correlations and quantification levels","url":"https://ideas.repec.org/p/zbw/bubdps/343101.html"},{"abstract":"We study how AI affects market competition based on a general equilibrium framework with heterogeneous firms facing idiosyncratic productivity and variable markups. Firms choose the AI technology subject to fixed costs, where AI production requires data and energy inputs. Our model predicts a non-monotonic relation of AI diffusion with industry concentration. As AI usage rises from an initially low level, large incumbent users gain market share. When AI usage is sufficiently diffused, entry of new and smaller adopters erodes the market share of incumbents, reducing industry concentration. The non-monotonic relations are robust when firms can complement AI with their own data. Our calibrated model predicts that industry concentration is likely to fall if AI adoption increases relative to the current level. In comparison, the relation of AI with the average markup depends on whether increased AI usage is driven by demand or supply factors. Our model also predicts that a modest subsidy of about 3 percent for AI adopter revenues maximizes social welfare, reflecting a tradeoff between aggregate productivity and the average markup associated with AI usage.","also_at":[],"analysis":null,"authors":["Hamid Firooz","Sylvain Leduc","Zheng Liu"],"date":"2026-08-10","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"f00d31bfa6719460","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"Examines the impact of AI on market competition and industry concentration, providing a framework for assessing future corporate profitability and antitrust policy.","screening_tag":"Transversal","selected_in":[],"source":"fed-san-francisco","source_name":"Federal Reserve Bank of San Francisco","tag":"Transversal","tag_inferred":false,"title":"Will AI Intensify or Weaken Market Competition?","url":"https://ideas.repec.org/p/fip/fedfwp/103630.html"},{"abstract":"We study the optimality of human groundwater extraction from many of the world’s 3,400 aquifers, where institutional or market failures may produce non-optimal extraction decisions. We use remote sensing and economic data to estimate a dynamic model of water extraction for each aquifer, recover the discount factor that rationalizes observed groundwater extraction, and compare it against Ramsey and market benchmarks. Three- to four-fifths of aquifers are extracted more rapidly than is optimal, decreasing aquifer present value by several percent, and creating trillions of dollars in present value welfare losses. Policies that guarantee users constant water quantities indefinitely, through subsidies or prior appropriation, or policy rules that fully discount future extraction, generate larger welfare costs. A sustainable extraction path that maintains current fill forever generates meaningfully lower welfare than the optimal extraction path, because most aquifer stocks are already inefficiently low.","also_at":["https://ideas.repec.org/p/nbr/nberwo/35904.html"],"analysis":null,"authors":["Brian Greaney","Joseph S. Shapiro","Katherine R. H. Wagner"],"date":"2026-08-10","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"c8858d7eb21af458","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":5,"screen_reason":"Analyzes global groundwater extraction optimality, offering a long-term perspective on resource management and welfare losses with potential implications for commodity and agricultural sectors.","screening_tag":"Transversal","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"Transversal","tag_inferred":false,"title":"Are We Consuming Too Much Groundwater?","url":"https://ideas.repec.org/p/fip/feddwp/103651.html"},{"abstract":"Using historical data on U.S. commercial bank balance sheets, we show that banks’ maturity mismatch has more than tripled since the mid-1980s, moving in close lockstep with declining interest rates and term premia. We rationalize these trends in a model of bank portfolio choice in which banks must cover operating costs out of current earnings. When term premia or short-term rates decline, banks extend the duration of their assets to remain profitable. This “reaching for duration” effect is convex in the degree of term premium compression. The resulting maturity mismatch renders banks increasingly vulnerable to self-fulfilling runs by uninsured depositors. Consistent with the model, less profitable banks subsequently raise their asset maturities, particularly in periods of low term premia and large Federal Reserve asset holdings. Quantitative easing, designed to remove duration risk from the private sector, may thus paradoxically concentrate it on bank balance sheets and undermine financial stability.","also_at":[],"analysis":null,"authors":["Thomas M. Mertens","Pascal Paul","Andrés Schneider"],"date":"2026-08-10","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"286ba46211edb541","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":9,"screen_reason":"Documents rising bank maturity mismatch and its stability risks, crucial for financial-market analysis.","screening_tag":"DM","selected_in":[],"source":"fed-san-francisco","source_name":"Federal Reserve Bank of San Francisco","tag":"DM","tag_inferred":false,"title":"Reaching for Duration","url":"https://ideas.repec.org/p/fip/fedfwp/103631.html"},{"abstract":"This paper examines how heterogeneous capital pledgeability shapes capital allocation. I first document, using French firm-level data, that firms holding more pledgeable capital are structurally more leveraged and display greater sensitivity of investment to credit supply shocks. I then incorporate heterogeneous capital pledgeability into a general equilibrium model with collateral constraints. This feature creates sectoral capital misallocation: high-pledgeability capital is less costly to accumulate and thus yields lower expected returns than low-pledgeability capital, both in steady state and in response to credit supply shocks. I estimate the model based on a simple distinction between commercial real estate and other types of capital goods, the former being more pledgeable. I then show that capital misallocation is substantial over the credit cycle. Because these capital goods are imperfect substitutes and firms face a unique interest rate, redistributive credit policies taxing debt issued by high-pledgeability firms while subsidizing that of less pledgeable firms raise welfare, particularly when implemented during a credit expansion.","also_at":[],"analysis":null,"authors":["Aurélien Espic"],"date":"2026-08-07","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"0612cc60a256fc23","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Links credit constraints to capital misallocation and welfare-impacting policy, directly relevant to credit markets.","screening_tag":"DM","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"DM","tag_inferred":false,"title":"Capital Pledgeability and Credit Misallocation","url":"https://ideas.repec.org/p/bfr/banfra/1058.html"},{"abstract":"Who bears the cost when a maritime chokepoint is disrupted? Combining ship-level AIS trajectories, port-call logs, freight indices, customs data and Turkish shipment-level data, we document the trade effects of the 2023 Red Sea crisis: seaborne trade between affected country pairs fell, rerouted around the Cape of Good Hope, and recovered within months as freight costs surged, while some exporters shifted persistently toward air freight. We build a quantitative trade model in which freight costs are endogenous to modal and route choice through congestion, a global shipping capacity constraint, and monopoly toll-setting by canal authorities. Calibrated to observed route choices and canal revenues, the model implies that a permanent Red Sea closure lowers global real income only mildly. Because the Suez Canal Authority, pricing to maximize revenue, already captures much of the route's surplus, the loss falls on the toll collector: Egypt forgoes 3.0 percent of real income, almost all of it canal rent, while the large trading economies each lose less than 0.02 percent. A transit fee on the Strait of Hormuz, a chokepoint without maritime substitutes, instead concentrates losses on the Gulf economies themselves. Whether a chokepoint has substitutes, and who prices it, jointly determine who pays for its disruption.","also_at":[],"analysis":null,"authors":["Carsten Philipp Brockhaus","Julian Hinz","Charles Serfaty"],"date":"2026-08-06","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"a068b8cbe05b0bbf","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"Provides a quantitative assessment of how maritime chokepoint disruptions impact global trade, inflation, and specific regional economies like Egypt.","screening_tag":"Transversal","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"Transversal","tag_inferred":false,"title":"Navigating Shocks: The Ripple Effects of Shipping Route Closures","url":"https://ideas.repec.org/p/bfr/banfra/1057.html"},{"abstract":"We draw on evidence from the 2026 Iran War to assess the validity of estimates of the short-run price elasticity of oil supply reported in the literature. Our analysis confirms that the one-month and one-quarter U.S. oil supply elasticity is effectively zero, consistent with estimates in Newell and Prest (2019). The data strongly reject the much higher elasticity estimates reported by more recent studies. This finding is consistent with evidence from surveys of oil company executives and with industry data about how long it takes to complete a well and start pumping oil. It is also consistent with theoretical arguments that the short-run oil supply elasticity is zero if adjusting oil production is costly, as is the case in practice. Our results have important implications for the construction and credibility of structural VAR models of the global oil market.","also_at":[],"analysis":null,"authors":["Lutz Kilian","Kunal Patel"],"date":"2026-08-06","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"5ad5a92b74708623","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":9,"screen_reason":"Uses recent geopolitical events to empirically confirm a zero short-run price elasticity of oil supply, which is critical for modeling global energy markets and inflation.","screening_tag":"DM","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"DM","tag_inferred":false,"title":"What the Iran War Teaches Us about the Price Elasticity of Oil Supply","url":"https://ideas.repec.org/p/fip/feddwp/103623.html"},{"abstract":"We measure the distributional incidence of U.S. motor-fuel tax holidays using transaction records from ∼13,200 gasoline stations linked to neighborhood income. The 2026 Iran War raised gasoline expenditure shares 2.9 times more in the lowest- than highest-income census tracts. Pre-shock exposure accounts for 89% of the gap while the residual heterogeneity widens rather than offsets it. State-level tax holiday lowered retail prices but offset the same fraction (28%) of the per-gallon burden across quintiles. A counterfactual federal holiday preserves this incidence. Per-gallon relief is burden-proportional as it attenuates the shock’s level without correcting its regressive income gradient.","also_at":[],"analysis":null,"authors":["Jacob T. Bradt","Reid Taylor"],"date":"2026-08-06","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"1e39fd096add44cb","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":4,"screen_reason":"Measures distributional impact of US fuel-price tax holidays, modest macro relevance.","screening_tag":"DM","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"DM","tag_inferred":false,"title":"The Incidence of Fuel-Price Shocks and Tax Holidays: Evidence from the 2026 Oil Shock","url":"https://ideas.repec.org/p/fip/feddwp/103622.html"},{"abstract":"Over nearly two centuries, U.S. inventions have become increasingly dissimilar: not just fewer head-to-head collisions between inventors, but growing distance between neighboring inventions. We document this secular decline in similarity using validated neural language models applied to the full text of claims in over 11 million U.S. patents (1836–2023), corroborated by a 98 percent decline in patent interference rates, a measure of independent simultaneous invention. Measuring this correctly requires validation, since different representations of the same patent text can yield opposite conclusions about whether inventions are converging or spreading out. Our validation framework, the first systematic comparison for patent text, selects among these locations in idea space. The model explains spreading out and connects it to several independently documented patterns — rising R&D investment per inventor, increasing patent values, weakening knowledge spillovers, and declining research productivity. The mechanism is spatial; as inventors spread out to capture new territory, inventions become more valuable but also more costly for others to absorb. In doing so, the model turns spillover intensity, innovation step size, and research productivity from fixed primitives into outcomes of inventor positioning. A calibrated decomposition attributes roughly 40 percent of the long-run decline in U.S. research productivity to these spatial forces, alongside traditional explanations such as fishing out and the burden of knowledge. Where inventors stand relative to each other in idea space matters as much for growth as how many of them there are.","also_at":[],"analysis":null,"authors":["Ina Ganguli","Jeffrey Lin","Vitaly Meursault","Nicholas Reynolds"],"date":"2026-08-05","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"a284c7affd8c9022","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":5,"screen_reason":"Documents long-term trends in U.S. innovation and R&D productivity, offering a structural perspective on economic growth and technological development.","screening_tag":"DM","selected_in":[],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"DM","tag_inferred":false,"title":"Spreading Out Across Expanding Idea Space","url":"https://ideas.repec.org/p/fip/fedpwp/103607.html"},{"abstract":"Utilities increasingly sell electricity using complex menus of time-constant and time-varying price schedules. We study how to design such a menu to maximize social welfare in a second-best environment where the marginal private and external costs of generating electricity vary over time, institutional constraints prevent mandating time-varying pricing and consumer behavior is distorted by frictions. We develop a model of plan choice, consumption and intertemporal substitution with time-varying marginal social costs and estimate it using administrative data from a large utility. We provide evidence of substantial intertemporal substitution in response to time-varying price incentives and selection across plans based on multidimensional heterogeneity. While the current menu’s time-varying plans substantially shift consumption from high-price to low-price hours, we find that they reduce social welfare. This loss is mitigated by information frictions. We show how to redesign the menu to simultaneously improve outcomes for consumers, the utility and the environment.","also_at":[],"analysis":null,"authors":["Maria Garcia-Osipenko","Nicolai V. Kuminoff","Spencer Perry","Nicholas Vreugdenhil"],"date":"2026-08-05","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"930f408c207a0d8d","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":4,"screen_reason":"Focuses on the design of residential electricity pricing menus, which is a micro-level utility regulation issue with limited direct impact on broader macro or financial markets.","screening_tag":"DM","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"DM","tag_inferred":true,"title":"Optimal Second-best Menu Design: Evidence from Residential Electricity Plans","url":"https://ideas.repec.org/p/fip/feddwp/103621.html"},{"abstract":"This paper provides the first causal estimates of the global social returns to U.S. public R&D. We use a narrative identification strategy to quantify the effects of exogenous shocks to U.S. R&D appropriations on the dynamic TFP response of 69 foreign economies from 1980–2019. A U.S. R&D appropriations shock equal to 1 percent of the federal R&D capital stock raises foreign TFP by approximately 1 percent after 12 years. This response is driven primarily by nondefense rather than defense R&D and is concentrated in non-OECD economies. These patterns are most consistent with diffusion occurring through openly accessible scientific content, capital-embodied trade and technological leapfrogging by economies further from the global frontier. A back-of-the-envelope calculation suggests that the global social returns to U.S. public nondefense R&D are roughly twice as large as the domestic returns, meaning the U.S. captures about half of these productivity benefits.","also_at":[],"analysis":null,"authors":["Gustavo de Souza","Andrew J. Fieldhouse","Karel Mertens","Ishan Nath","Valerie A. Ramey"],"date":"2026-08-04","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"89520e4ad6e3c85b","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Quantifies the global spillover effects of U.S. public R&D on foreign TFP, providing evidence on the international transmission of technological progress and growth.","screening_tag":"Transversal","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"Transversal","tag_inferred":false,"title":"The Effects of U.S. Public R&D on Global Growth","url":"https://ideas.repec.org/p/fip/feddwp/103620.html"},{"abstract":"This paper reviews the rapidly growing literature on mortgage lock-in and its effects on household mobility, labor reallocation, home sales, owner-occupied prices, and spillovers into rental and commercial markets. We then discuss two future research directions: (1) separately identifying lock-in effects from the direct effects of the existing interest rate on the mortgage, which have different implications for household behavior as market interest rates rise, and (2) assessing the general-equilibrium consequences of reduced mobility on labor markets and productivity. We close by discussing policy responses, including portability, broader assumability, and a Danish-style delivery option.","also_at":[],"analysis":null,"authors":["Kristopher Gerardi","Franklin Qian","David Hao Zhang"],"date":"2026-08-03","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"9c9215cc3fb7e7ab","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":6,"screen_reason":"Reviews mortgage lock-in effects on housing markets and policy, relevant to real-estate and monetary outlook.","screening_tag":"DM","selected_in":[],"source":"fed-atlanta","source_name":"Federal Reserve Bank of Atlanta","tag":"DM","tag_inferred":false,"title":"Mortgage Lock-in: A Review of the Literature","url":"https://ideas.repec.org/p/fip/fedawp/103593.html"},{"abstract":"The introduction of a digital euro (D€) would allow euro area residents to exchange bank deposits for digital currency, thus offering an efficient addition to the European payment sector. It is currently being discussed how the D€ impacts liquidity outflows from banks and financial stability. To mitigate these risks, the European Commission's legislative proposal permits the ECB to impose limits on the use of the D€ as a store of value. This study contributes to the calibration of appropriate holding limits for a D€. We examine how banks adjust their liquidity buffers and funding structures in response to the D€. We explore banks' potential strategies to minimise funding costs, including raising deposit rates and expanding wholesale funding, and approximate a market equilibrium. Applying our model to the German banking system, we find that imposing a holding limit of €3,000 would reduce the return on equity by approximately 0.2 percentage points and the Liquidity Coverage Ratio by about 7 percentage points in the most adverse scenario. These findings suggest that the long-term impact remains relatively contained.","also_at":[],"analysis":null,"authors":["Krüger, Ulrich","Wong, Lui Hsian"],"date":"2026-08-03","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"85a90a502d9d7542","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Evaluates digital euro effects on German banks’ liquidity and funding costs, relevant to euro-area policy and market participants.","screening_tag":"DM","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"DM","tag_inferred":false,"title":"Long-term implications of a digital euro on liquidity and funding costs in the German banking system","url":"https://ideas.repec.org/p/zbw/bubdps/343079.html"},{"abstract":"More than $65 billion annually flows through Mexico’s remittance corridor, the largest such pathway in the Western Hemisphere. Yet, the distribution of these flows across regions and the implications for financial inclusion—or alternatively, perpetuating inequality—remain poorly understood. This paper exploits bilateral remittance flows between U.S. and Mexican states during 2013–25 to construct and validate a multi-source origin–destination framework linking Banco de México’s U.S.-state outflows with Mexican state-level receipts. We develop allocation matrices from consular registrations, household surveys, and transaction records and validate them against official state-level inflows. Validation against official Mexican state-level receipts yields a clear hierarchy, suggesting that matrices based on consular records explain more than four-fifths of cross-sectional variance in official receipts, outperforming survey-based and transaction-based alternatives, as the matrices preserve the concentrated geography of the settled diaspora. Using the preferred specification, we recover the bilateral structure of the U.S.–Mexico remittance system and analyze its evolution during a period that includes the COVID-19 shock. At the national level, growth in remittance inflows is largely explained by scale effects. However, at the regional level, the South-Southeast is the only region where remittance growth exceeds scale predictions. Shifts in migrant composition drive this divergence, particularly an increasing share of migrants from Southern-origin states in the United States, as well as the rising importance of specific origin states such as Oaxaca. These results highlight the importance of accounting for bilateral flow structures when studying remittances. By preserving spatial concentration, our framework provides new insights into how external shocks transmit unevenly across regions and how remittances shape subnational development trajectories in Mexico.","also_at":[],"analysis":null,"authors":["Jesus Cañas","Miguel Flores"],"date":"2026-08-03","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"4d21a1ed6076e9f6","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":5,"screen_reason":"Maps US-Mexico remittance flows, shedding light on emerging-market financial links.","screening_tag":"EM","selected_in":[],"source":"fed-dallas","source_name":"Federal Reserve Bank of Dallas","tag":"EM","tag_inferred":false,"title":"Subnational Bilateral Remittance Flows in the U.S.-Mexico Corridor: A Multi-Source Imputation and Validation","url":"https://ideas.repec.org/p/fip/feddwp/103619.html"},{"abstract":"This paper studies how integration between the financial sector and production networks shapes business cycle transmission. We develop a dynamic model in which banks provide asset-based financing to firms embedded in supply chains. The model highlights two margins of bank–supply chain integration with opposite macroeconomic implications. Extensive-margin integration—captured by firms’ access to banks specializing in different supply chain segments—amplifies negative banking shocks. By contrast, intensive-margin integration—captured by the diffusion of factoring and invoice discounting—attenuates banking disruptions. The model reveals that the stabilizing effects of integration dominate when firm production linkages are tight. The predictions are consistent with matched bank–firm data from Italy.","also_at":[],"analysis":null,"authors":["Emanuele Brancati","Qingqing Cao","Raoul Minetti","Nicholas Jaehyun Yi"],"date":"2026-08-03","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"385fde7b7c49447d","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Explores bank-supply-chain integration effects on cycles, with implications for banking-sector risk.","screening_tag":"DM","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"DM","tag_inferred":false,"title":"Financial and Production Integration in the Macroeconomy","url":"https://ideas.repec.org/p/fip/fedcwq/103624.html"},{"abstract":"A production sector's size, as measured by its Domar weight, captures the contemporaneous aggregate effect of its productivity shocks. However, the presence of investment means that these aggregate effects can persist over time. We derive a dynamic generalization of Hulten's theorem in an environment that features sectoral linkages in both intermediate-inputs and investment. This generalization follows from production efficiency alone, and decomposes each sector's Domar weight into an impact and a propagation component. The relative size of these components then determines how persistent the aggregate effects of sectoral shocks are, but cannot be known absent information on the economy's production structure. We show in a tractable structural model that future GDP responses to sectoral shocks can alternatively be described as weighted sums of all sectors' Domar weights, with weights primarily dictated by the network positions and capital shares of downstream sectors. Quantifying the model with U.S. production data, we find that i) Domar weights become progressively less informative about the aggregate effects of sectoral shocks as the horizon lengthens and ii) over a three-year horizon, goods-producing sectors have larger cumulative aggregate effects than service-producing sectors, despite goods only accounting for less than one-third of GDP. Model-free local projections of U.S. GDP growth on sectoral TFP growth confirm these findings.","also_at":[],"analysis":null,"authors":["Paul Ho","Danial Lashkari","Pierre-Daniel G. Sarte"],"date":"2026-08-03","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"06e311f57c3f4a3d","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":6,"screen_reason":"Provides a dynamic model of sectoral shock persistence using US data, useful for growth forecasts.","screening_tag":"DM","selected_in":[],"source":"fed-richmond","source_name":"Federal Reserve Bank of Richmond","tag":"DM","tag_inferred":false,"title":"How Do Sectoral Shocks Shape Future GDP?","url":"https://ideas.repec.org/p/fip/fedrwp/103603.html"},{"abstract":"We apply a sufficient statistics framework to detect nonoptimal monetary policy decisions in Iceland. The method relies on two sufficient statistics: (1) forecasts of policy objectives and (2) impulse responses of those objectives to monetary policy shocks. The weighted product of these two sufficient statistics forms the gradient of the policy maker’s loss function. The Optimal Policy Perturbation (OPP) statistic, derived from this gradient, provides the test for optimization failures. Our results suggest that the Central Bank of Iceland’s key interest rate has, on average, been set too low over the past two decades. There are two notable deviations from optimality: the periods leading up to the financial crisis and following the Covid-19 pandemic.","also_at":[],"analysis":null,"authors":["Birta B. Haraldsdottir","Bjarni G. Einarsson"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":"series listing","doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"ec2bcc039b3c217e","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":5,"screen_reason":"Applies optimal-policy test to Iceland, indicating possible systematic interest-rate mis-setting.","screening_tag":"DM","selected_in":[],"source":"sedlabanki","source_name":"Central Bank of Iceland Working Papers","tag":"DM","tag_inferred":false,"title":"Too Little, Too Late? Testing The Optimality of Monetary Policy in Iceland","url":"https://ideas.repec.org/p/ice/wpaper/wp101.html"},{"abstract":"This paper documents large heterogeneity in the cyclicality of expenditure items within aggregate consumption and shows that a substantial part of this heterogeneity can be explained by differences in the household time required to consume. Combining data from the American Time Use Survey and Personal Consumption Expenditures, we construct a set of consumption activities and establish new stylized facts. We show that in a recession consumption expenditures fall to a greater extent for those activities to which households reallocate a larger share of foregone market hours, suggesting that time and expenditures are substitutes. We develop a two-sector New Keynesian model that rationalizes these patterns. Disciplining the model with microeconomic estimates of the elasticity of substitution between time and expenditures and of price stickiness, we find that our model accounts for roughly forty percent of the impact expenditure response to monetary policy shocks.","also_at":[],"analysis":null,"authors":["Daniela Hauser","Stefano Gnocchi","Laure Simon"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"dffc1738ee46b4a8","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":4,"screen_reason":"Explores time-use heterogeneity in consumption, limited immediate market or policy implications.","screening_tag":"DM","selected_in":[],"source":"boc","source_name":"Bank of Canada Staff Working Papers","tag":"DM","tag_inferred":true,"title":"Time Use and Consumption Expenditures","url":"https://ideas.repec.org/p/bca/bocawp/26-29.html"},{"abstract":"We compile a unique dataset linking micro price data underlying the official Swedish producer price index with administrative firm level data and provide new evidence on the inflationary effects of global supply chain shocks. For identification, we interact exogenous shocks to global supply chains, obtained through a VAR model, with firm specific import shares. Shocks to global supply chains lead to a signif icant and persistent increase in producer prices with a peak response after two years. Importantly, average responses mask heterogeneous responses across firms. Relatively larger firms, firms with lower labor costs and a higher market share raise prices more strongly.","also_at":[],"analysis":null,"authors":["Finck, David","Klein, Mathias","Tillmann, Peter"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"dc29717fc630fa3c","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"The research quantifies the inflationary impact of supply chain shocks at the firm level, offering a granular view of price transmission mechanisms.","screening_tag":"DM","selected_in":[],"source":"riksbank","source_name":"Sveriges Riksbank Working Papers","tag":"DM","tag_inferred":false,"title":"The Inflationary Effects of Global Supply Chain Shocks: Evidence from Swedish Microdata","url":"https://ideas.repec.org/p/hhs/rbnkwp/0470.html"},{"abstract":"Tariffs raise the prices of goods made at home, not just the imports they tax—an effect that standard pass-through estimates largely miss. Studying the 2025 U.S. tariffs, we find that about 26 percent of the tariff increase passes through to consumer prices. These estimates are measured relative to less-exposed goods and hold aggregate conditions fixed. The direct effect accounts for 64 percent of this increase, as tariffs raise the consumer prices of foreign varieties of a good. The remaining 36 percent arises indirectly—tariffs raise the cost of imported inputs used by U.S. producers, and domestic producers raise their markups because they face less competition from higher-priced imports. The direct effect passes through quickly, since tariffs raise import prices almost immediately, but the indirect effect takes nine to twelve months to work its way through supply chains. As a result, tariffs have a larger and more drawn-out impact on consumer prices than the direct effect alone would suggest.","also_at":[],"analysis":null,"authors":["Mary Amiti","Sebastian Heise","David E. Weinstein"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"db913dc972c76bae","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Quantifies tariff pass-through to consumer prices, useful for inflation and trade impact assessments.","screening_tag":"DM","selected_in":[],"source":"fed-new-york","source_name":"Federal Reserve Bank of New York","tag":"DM","tag_inferred":false,"title":"The Anatomy of Tariff Pass-Through into Consumer Prices","url":"https://ideas.repec.org/p/fip/fednsr/103701.html"},{"abstract":"We show that interactions across government policies affect firms’ cost of equity capital. Exploiting the 2018–2019 U.S. tariff shocks and concurrent federal procurement spending, we find that firms facing higher tariff exposure earn higher subsequent risk premia, but this effect is substantially attenuated for firms receiving greater procurement. A one-standard-deviation increase in procurement attenuates about two-thirds of the tariff-related risk premium. Procurement is relatively more favorable for politically connected and economically vulnerable firms. Larger procurement inflows also attenuate tariff-induced declines in subsequent earnings. Together, these findings reveal a form of fiscal insurance in which government procurement partially offsets the financing and real consequences of tariff exposure.","also_at":[],"analysis":null,"authors":["Leslie Sheng Shen","Nancy R. Xu"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"c976134377bede3d","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Links tariff shocks and procurement to equity risk premia, relevant for US market pricing.","screening_tag":"DM","selected_in":[],"source":"fed-boston","source_name":"Federal Reserve Bank of Boston","tag":"DM","tag_inferred":false,"title":"Cross-Policy Risk Pricing","url":"https://ideas.repec.org/p/fip/fedbwp/103725.html"},{"abstract":"We empirically document that contractionary monetary policy shocks, in addition to low ering output and prices, trigger an expansion in primary deficits and government debt. Inflation follows an S-shaped adjustment, implying that monetary policy shifts rather than permanently alters inflation. Structural counterfactuals show that front-loading fiscal con solidation considerably amplifies the monetary effects, and that the timing of consolidation alters the composition of the fiscal adjustment, with distinct implications for real and nom inal outcomes. The temporary impact of a monetary policy shock on prices is more than halved by the endogenous adjustment in social transfers, whereas the tax system significantly reduces the effect on output.","also_at":[],"analysis":null,"authors":["Breitenlechner, Max","Geiger, Martin","Klein, Mathias"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"b55bde6ab350f9b5","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":9,"screen_reason":"The paper documents the fiscal consequences of monetary policy, providing critical insights into the interaction between interest rates, debt, and fiscal consolidation.","screening_tag":"DM","selected_in":[],"source":"riksbank","source_name":"Sveriges Riksbank Working Papers","tag":"DM","tag_inferred":true,"title":"The Fiscal Channel of Monetary Policy","url":"https://ideas.repec.org/p/hhs/rbnkwp/0469.html"},{"abstract":"We study how guarantee fees affect lending by exploiting the Belgian COVID-19 loan guarantee program, which charged lower fees to SMEs than to large firms. Using this size-based fee discontinuity in a regression discontinuity design, we show that large firms facing higher fees are more likely to obtain non-guaranteed loans that are cheaper than comparable guaranteed loans. Both banks and firms benefit from avoiding the fee: borrowers pay lower rates, and lenders retain part of the avoided fee as higher returns. Overall, fees discourage guaranteed lending and concentrate guaranteed loans among ex-ante riskier large firms, resulting in higher ex-post defaults.","also_at":[],"analysis":null,"authors":["Ozan Güler","Ilia Samarin"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"9e355dddf7a3d028","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"This study offers insights into the design and efficiency of government loan guarantee programs, which are relevant for fiscal and banking policy analysis.","screening_tag":"DM","selected_in":[],"source":"nbb","source_name":"National Bank of Belgium Working Papers","tag":"DM","tag_inferred":false,"title":"Who Gets Publicly Guaranteed Loans? The Effect of Guarantee Fees on Loan Allocation and Pricing","url":"https://ideas.repec.org/p/nbb/reswpp/202608-495.html"},{"abstract":"A large literature on monetary policy transmission has emphasised many potential non-linear drivers. Transmission strength has been shown to vary with the business cycle, financial frictions, and uncertainty, amongst other mechanisms. However, most studies focus on a small number of channels at a time. Our study takes a “big data” approach to non-linearity, allowing us to rank the relative importance of a wide range of non-linear transmission channels. We focus on asset price responses to central bank statements. Using a large, mixed-frequency macro-financial dataset, we show that US monetary policy surprises feature a small number of important non-linear drivers, relating especially to financial variables. Monetary transmission to long-term interest rates is weaker at times of high interest rates and high credit growth, consistent with diminishing effectiveness over a hiking cycle. While non-linearity over the interest rate cycle appears to dominate other channels, we find some evidence that monetary policy is weaker in booms. Using euro area data, we find a prominent role for sovereign risk in state-dependent transmission.","also_at":[],"analysis":null,"authors":["Aydin Yakut, Dilan","Byrne, David","Goodhead, Robert"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"6fba2d374e6d315e","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":9,"screen_reason":"Direct analysis of US and euro area monetary transmission informs policy and market expectations.","screening_tag":"DM","selected_in":[],"source":"cbi","source_name":"Central Bank of Ireland","tag":"DM","tag_inferred":false,"title":"What makes Monetary Policy More Powerful? A Big Data Approach","url":"https://ideas.repec.org/p/cbi/wpaper/09-rt-26.html"},{"abstract":"We study the evolution of public perceptions of monetary policy and show that Bayesian learning provides a structural account of their time variation. Using a medium-scale DSGE model estimated on U.S. data, we first document substantial and persistent time variation in agents’ perceived monetary policy reaction coefficients. We then show that a Bayesian learning framework, in which agents gradually infer policy conduct under incomplete information, provides a compelling explanation for these dynamics and delivers a markedly better empirical fit than rational expectations. Learning about the inflation reaction coefficient plays a central role. Finally, we demonstrate that evolving perceptions generate state-dependent transmission: weaker perceived inflation responsiveness amplifies and prolongs inflationary responses to shocks, while stronger perceived responsiveness stabilizes inflation, with implications for real activity that depend on the type of shock. Monetary policy actions themselves feed back into beliefs, implying that credibility evolves endogenously and acts as an additional propagation channel.","also_at":[],"analysis":null,"authors":["Arnoud Stevens","Pavel Tretiakov"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"6f23d73591eba172","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"The paper provides a structural framework for understanding how evolving public perceptions of monetary policy impact inflation and real activity.","screening_tag":"DM","selected_in":[],"source":"nbb","source_name":"National Bank of Belgium Working Papers","tag":"DM","tag_inferred":false,"title":"Public beliefs and monetary policy","url":"https://ideas.repec.org/p/nbb/reswpp/202608-494.html"},{"abstract":"This paper estimates the macroeconomic effects of green and brown government spend-ing using public procurement data, focusing on how spending composition reshapes the energy sector. Classifying around 171,000 contracts by product codes, we con-struct a quarterly panel of green and brown procurement for ten Eurozone economies (2011–2023). We identify spending shocks using the institutional timing of contract award announcements, which is plausibly orthogonal to the business cycle, and es-timate impulse responses with panel local projections. Green and brown procure-ment have near mirror-image effects on the energy sector: green procurement lowers energy prices, reduces energy-sector output, and cuts oil import dependence, while brown procurement raises energy prices and depresses innovation, especially green patenting. These differences extend to aggregate output: the cumulative GDP multi-plier of green procurement is about 0.7 on impact and exceeds 1 within one and two years, whereas the brown multiplier remains statistically indistinguishable from zero over the first two years.","also_at":[],"analysis":null,"authors":["Fulvia Marotta","Giorgio Rossetto","Lennard Schlattmann"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"618d245d60e7da26","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Green vs brown spending effects on GDP and energy markets are relevant for fiscal policy and sector outlooks.","screening_tag":"DM","selected_in":[],"source":"dnb","source_name":"De Nederlandsche Bank Working Papers","tag":"DM","tag_inferred":false,"title":"The Macroeconomic Consequences of Green and Brown Government Spending","url":"https://ideas.repec.org/p/dnb/dnbwpp/866.html"},{"abstract":"Firm heterogeneity in financial constraints is a quantitatively important driver of how monetary policy transmits to inflation. Using detailed microdata on Swedish public and private firms, and high-frequency monetary policy surprises around Riksbank announcements, we document that smaller, financially constrained firms adjust prices significantly less than larger firms in response to changes in monetary policy. This heterogeneous price response materially dampens the aggregate PPI inflation response to monetary policy. Models of customer markets and financial frictions can explain our findings: because the external finance premium rises after a monetary contraction, constrained firms cut prices less to preserve cash flows, sacrificing future market share. Additional evidence on heterogeneous sales, debt, marginal cost, and markup responses further supports this channel. We consider several alternative explanations, including differences in price adjustments, working capital, market share, and export share, but these cannot rationalize our main heterogeneity result.","also_at":["https://ideas.repec.org/p/fip/fedfwp/103550.html"],"analysis":null,"authors":["Bauer, Michael","Czarnota, Alexander","Klein, Mathias"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"4cf1773ec6573b21","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Shows financially constrained firms dampen monetary-policy transmission, important for inflation dynamics.","screening_tag":"DM","selected_in":[],"source":"riksbank","source_name":"Sveriges Riksbank Working Papers","tag":"DM","tag_inferred":false,"title":"Prices and Monetary Policy: The Role of Financial Constraints","url":"https://ideas.repec.org/p/hhs/rbnkwp/0468.html"},{"abstract":"The EU has introduced an extensive ESG disclosure regime aimed at redirecting private capital to support the transition to a sustainable economy. Yet, it remains unclear whether these disclosure obligations lead to measurable shifts in the allocation and cost of capital to green firms or investments. This review aims to address this gap by developing a conceptual framework that identifies the mechanisms through which both voluntary and mandatory disclosures may influence the allocation and cost of private capital, and by systematically mapping the emerging empirical evidence against these channels. It draws on 99 publications from three academic databases (Scopus, Web of Science, EconLit) and EU institutions, published between 2010 and 2025. The review shows that the evidence base remains emerging and fragmented, but generally points to a positive association between ESG disclosure or performance and access to finance and more favourable funding conditions. At the same time, capital markets seem to anticipate regulatory compliance costs and risks, which can increase uncertainty, and in some settings, adversely affect firms with potential implications for market functioning and capital allocation and pricing. The review further highlights implications for academics and regulators. For academics, it identifies several gaps and limitations suggests avenues for future research. For regulators, it provides cautious support for disclosure regulation, while underscoring the need for credible, usable and proportionate requirements.","also_at":[],"analysis":null,"authors":["Anouk Levels"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"44631bc1729b3801","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"Evaluates the impact of EU ESG disclosure mandates on capital allocation, directly informing the debate on sustainable finance and regulatory effects on market functioning.","screening_tag":"DM","selected_in":[],"source":"dnb","source_name":"De Nederlandsche Bank Working Papers","tag":"DM","tag_inferred":true,"title":"ESG Disclosure and Green Investment in the EU","url":"https://ideas.repec.org/p/dnb/dnbwpp/867.html"},{"abstract":"We document three stylized facts about household inflation expectations that stood out during the 2021–23 inflation surge: i) a temporary dislocation in the term structure of expectations, ii) an earlier peak at longer horizons, and iii) a sharp increase in the share of households expecting deflation at medium and long horizons. We show that these stylized facts are consistent with households’ narratives attributing the inflation surge to temporary labor and supply disruptions. We also argue that they pose an empirical challenge to existing models of expectation formation. Implications for theory and expectations surveys are discussed.","also_at":[],"analysis":null,"authors":["Olivier Armantier","Gizem Koşar","Giorgio Topa","Wilbert Van der Klaauw","John C. Williams"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"3d624ba84d732db2","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Documents unusual inflation-expectation patterns during recent surge, informing monetary-policy expectations.","screening_tag":"DM","selected_in":[],"source":"fed-new-york","source_name":"Federal Reserve Bank of New York","tag":"DM","tag_inferred":true,"title":"Three Stylized Facts About Inflation Expectations During the 2021-23 Inflation Surge","url":"https://ideas.repec.org/p/fip/fednsr/103672.html"},{"abstract":"We study how climate policy risk is priced across the maturity structure of equity cash flows. Using textual analysis of European news articles, we construct indices of transition and physical climate risk and, drawing on recent advances in measuring the temporal dimension of text, classify climate news by the horizon it references. We combine these indices with prices of dividend futures and dividend swaps, which allow us to decompose stock price reactions to climate news into short- and long-term cash-flow components. Heightened transition-risk news lowers stock prices, and the decline is concentrated in long-maturity dividend claims. The evidence suggests that investors expect most firms to defer adaptation, leaving near-term earnings and payouts largely unchanged while bearing greater long-run exposure. Finally, firm-level sensitivities identify which companies the market perceives as adapting early — accepting short-term losses to invest in the transition — versus those most exposed to stranded-asset risk.","also_at":[],"analysis":null,"authors":["Rhys Bidder","Dimitris Papadimitriou","Lavinia Rognone","Shunshun Zhang"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"3adee832c89b456c","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Climate-risk pricing of equity cash flows impacts stock valuations and investment strategies.","screening_tag":"DM","selected_in":[],"source":"bog","source_name":"Bank of Greece","tag":"DM","tag_inferred":true,"title":"Climate risks, short and long","url":"https://ideas.repec.org/p/bog/wpaper/367.html"},{"abstract":"The paper explores how a small low-tax economy is affected by foreign corporatetax shocks. To address this question, I develop a dynamic general-equilibrium model, in which multinational firms engage in both tangible and intangible FDI. Intangible assets arise from multinationals’ R&D activities. Each multinational decides whether to place its intangibles in the parent firm or in an overseas affiliate. The placement decision shapes the intra-firm trade in royalties and R&D services. The model reveals that corporate taxes can directly impact arm’s-length prices of multinational firms. I investigate territorial corporate taxation as well as worldwide taxation of intangible income.","also_at":[],"analysis":null,"authors":["Sauer","Radek"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"2341ff448cb57eb8","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":7,"screen_reason":"Models corporate-tax shocks on intangibles, shedding light on multinational profit shifting and tax policy impacts.","screening_tag":"Transversal","selected_in":[],"source":"cbi","source_name":"Central Bank of Ireland","tag":"Transversal","tag_inferred":false,"title":"The Intangible Economy","url":"https://ideas.repec.org/p/cbi/wpaper/10-rt-26.html"},{"abstract":"This paper examines the local labor market effects of mega-scale semiconductor investment, using Maricopa County, Arizona, as a case study. The county has received about $300 billion in commitments through the 2030s under the CHIPS and Science Act of 2022, the largest place based industrial investment in recent US history. Using synthetic difference-in-differences, we find large employment gains, but few of these gains occur within the manufacturing sector. Semiconductor manufacturing shows no measurable net change, as hiring at new facilities offsets reductions at existing ones. The gains instead concentrate in construction—13 to 33 percent above the synthetic counterfactual—and in supply chain sectors—5 to 46 percent above—which together represent about 9,700 and 7,100 jobs, respectively. More than 80 percent of the latter fall into wholesale trade and technical services rather than manufacturing. We attribute this composition to the high capital-to-labor ratio of semiconductor fabrication and to a scale threshold in supplier relocation.","also_at":[],"analysis":null,"authors":["Annie Liu","Pinghui Wu"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"0c1dc2e0c3798818","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":6,"screen_reason":"Analyzes labor effects of massive US semiconductor investment, informing sectoral growth and supply-chain outlook.","screening_tag":"DM","selected_in":[],"source":"fed-boston","source_name":"Federal Reserve Bank of Boston","tag":"DM","tag_inferred":false,"title":"Where the CHIPS Fall: Local Labor Market Impacts of Semiconductor Mega-Investments in Maricopa County, Arizona","url":"https://ideas.repec.org/p/fip/fedbwp/103718.html"},{"abstract":"We study how stablecoins impact global capital flows by constructing a novel wallet-level dataset linking geotagged Ethereum Name Service registrations to stablecoin transactions around banking restrictions, currency crises, sanctions, and monetary disruptions. We find that crisis-country wallets experience significant increases in USD stablecoin inflows and receipt activity during crisis weeks. Motivated by this evidence, we develop a small-open-economy New Keynesian model in which household adoption of programmable stablecoins weakens the government’s enforcement technology for capital controls by making capital mobility endogenous. The empirical evidence validates the model’s central assumption that flight pressure increases stablecoin adoption. Stablecoins therefore tighten the Mundell–Fleming trilemma by reducing the government’s ability to sustain independent monetary policy under a fixed exchange-rate regime.","also_at":[],"analysis":null,"authors":["Pablo D. Azar","Maryam Farboodi","Nish Sinha"],"date":"2026-08-01","date_kind":"published","date_precision":"month","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"063be3a6a4239ea7","issue_date":null,"kind":"working_paper","publication_month":"2026-08","relevance":8,"screen_reason":"Links stablecoin adoption to capital-flow controls, directly affecting monetary policy and market stability.","screening_tag":"Transversal","selected_in":[],"source":"fed-new-york","source_name":"Federal Reserve Bank of New York","tag":"Transversal","tag_inferred":false,"title":"Stablecoins Meet the Mundell–Fleming Trilemma","url":"https://ideas.repec.org/p/fip/fednsr/103702.html"},{"abstract":"This study examines the effects of a government bailout on corporate disclosure when a firm is exposed to the risk of investors withdrawing their investments from the firm. The government bailout affects the behavior of investors, which, in turn, alters the disclosure behavior of the firm. We find that the firm discloses less (more) than the case without a bailout when investors have pessimistic (optimistic) beliefs about the firm. These changes in disclosure decision reduce investors’ expectations about the firm’s fundamentals. Therefore, the government bailout can increase the likelihood of the firm facing a liquidity crisis if it distorts the disclosure behavior of the firm.","also_at":[],"analysis":null,"authors":["Kyounghun Lee","Frederick Dongchuhl Oh","Junghum Park"],"date":"2026-07-30","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"de9317bd844308ee","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":5,"screen_reason":"Bailout-induced disclosure changes affect firm liquidity but have indirect market implications.","screening_tag":"DM","selected_in":[],"source":"bank-of-lithuania","source_name":"Bank of Lithuania","tag":"DM","tag_inferred":true,"title":"Corporate Disclosure, Government Bailout, and Liquidity Crisis","url":"https://ideas.repec.org/p/lie/wpaper/145.html"},{"abstract":"This paper examines how inflation expectations relate to household saving behavior across saving categories. We apply a generalized ordered logit model to survey data from 4, 824 German households during a high inflation period (March 2023). We find that income and precautionary motives dominate substitution effects: higher inflation expectations are associated with maintaining or increasing overall savings. Our disaggregated analysis reveals a non-linear threshold effect - only households with strongly elevated inflation expectations exhibit economically significant be- havioral responses, consistent with flight-to-liquidity behavior toward cash. De- composing saving shifts by inflation expectation level reveals further heterogeneity: the cash-bond substitution documented in the full sample is driven exclusively by low inflation expectation households, while high inflation expectation households accumulate both instruments simultaneously, reflecting broad portfolio expansion rather than reallocation. We further find that only dynamic - not static - infla- tion expectation formation is associated with behavioral responses. These findings have ambiguous implications for bank funding stability.","also_at":[],"analysis":null,"authors":["Krüger, Jacqueline","Dinger, Valeriya"],"date":"2026-07-29","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"bff7e87c9fa4531b","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":4,"screen_reason":"Links German inflation expectations to household saving choices, limited immediate market impact.","screening_tag":"DM","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"DM","tag_inferred":false,"title":"Expected inflation and saving in categories","url":"https://ideas.repec.org/p/zbw/bubdps/343043.html"},{"abstract":"We employ a medium-scale New Keynesian model with banks and endogenous financial panics (system-wide bank runs) to study whether and how (non-zero) average trend inflation affects the risk of bank runs. Consistent with descriptive empirical evidence for a panel of advanced economies, we find that trend inflation significantly affects the probability of banking panics - this probability more than doubles when annual trend inflation rises from 0% to 6% p.a. The incidence of a banking panic mainly depends on the magnitude of the associated decline in asset prices. With higher trend inflation this decline is stronger. The presence of an occasionally binding zero lower bound increases the likelihood of bank runs, but only for low levels of long-run inflation. Disinflations engineered by the central bank are associated with significantly higher bank-run probability in the short- run, especially when a sharp \"cold turkey\" disinflation is pursued. Finally, we discuss how trend inflation affects some of the trade-offs faced by monetary and macroprudential policy.","also_at":[],"analysis":{"correction":null,"current_prompt":false,"evidence":"Consistent with descriptive empirical evidence for a panel of advanced economies","flags":[],"in_issue":false,"rationale":"The study explicitly bases its empirical evidence on a panel of advanced economies.","relevance_note":"The findings highlight a critical trade-off for central banks, suggesting that inflation targets and disinflation strategies directly impact financial stability risks.","summary":"This paper uses a New Keynesian model to examine how long-run trend inflation influences the risk of systemic bank runs. The authors find that higher trend inflation increases the probability of financial panics by exacerbating asset price declines during downturns.","takeaways":["The probability of a banking panic more than doubles when annual trend inflation rises from 0% to 6%.","Higher trend inflation leads to stronger declines in asset prices, which drives the incidence of banking panics.","Rapid 'cold turkey' disinflation policies significantly increase the short-run probability of bank runs."],"wording_correction":null},"authors":["Hristov, Nikolay","Menno, Dominik"],"date":"2026-07-27","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"853a7e1830beffb8","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":9,"screen_reason":"Analyzes trend inflation’s impact on banking panics, offering direct insights for monetary-policy and financial-stability decisions.","screening_tag":"DM","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"DM","tag_inferred":true,"title":"Long-run inflation and financial panics","url":"https://ideas.repec.org/p/zbw/bubdps/343042.html"},{"abstract":"This paper develops an agent-based framework (DeTail) to assess the state-contingent tail effects of releasable macroprudential capital buffers. The model features heterogeneous firms, households, and banks, and a single central bank, all interacting in a fully integrated, stock-flow consistent framework which generates endogenous credit cycles. Using this approach, we evaluate how time-varying capital requirements affect the time-varying distributions of credit growth, firm and household default rates, and bank losses along the credit cycle. Policy experiments show that releasing capital buffers during economic downturns preserves credit supply by improving risky (lower-tail) credit outcomes, reduces both households and firms defaults, and supports macro-financial resilience by limiting tail bank losses. At the same time, capital buffer accumulation during upturns imposes minimal costs and does not significantly constrain lending. These findings support the active use of releasable buffers to mitigate systemic risk and smooth credit cycles without weakening the banking system.","also_at":[],"analysis":null,"authors":["Enrico Minnella","Ana Pereira","Eugen Tereanu"],"date":"2026-07-24","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"07639ab0c4d33388","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":8,"screen_reason":"Agent-based evaluation of releasable macroprudential buffers informs systemic risk policy.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":true,"title":"The devil in the DeTail: assessing state-contingent tail effects of a releasable macroprudential capital buffer using a parsimonious agent-based framework","url":"https://ideas.repec.org/p/boe/boeewp/023320.html"},{"abstract":"Central banks typically rely on the following heuristic: Look through transitory supply shocks to stabilize the output gap, but pivot toward inflation stabilization when supply shocks become persistent. Yet standard macroeconomic models provide little support for this heuristic. They justify it for markup shocks—a particular type of supply disturbance—but imply that, for the most common supply shocks, such as productivity, labor supply, or energy prices, stabilizing the output gap remains close to optimal even when these shocks are persistent. What, then, rationalizes a hawkish response to persistent supply shocks? This paper shows that, contrary to conventional wisdom, the risk that inflation expectations de-anchor is not sufficient. Even when expectations are backward-looking, output-gap stabilization remains close to optimal. Instead, real wage rigidity emerges as the key mechanism. When real wages are sufficiently rigid, stabilizing the output gap becomes substantially more costly, and optimal policy shifts toward inflation stabilization in response to persistent supply shocks, regardless of whether expectations can de-anchor. These findings suggest that monitoring real wage rigidity may be at least as important as monitoring inflation expectations when assessing the need for a hawkish policy pivot.","also_at":[],"analysis":null,"authors":["Stéphane Dupraz"],"date":"2026-07-23","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"fb2e1416fd403322","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":8,"screen_reason":"Challenges conventional heuristics on supply-shock policy, relevant for central-bank stance on inflation versus output.","screening_tag":"Transversal","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"Transversal","tag_inferred":false,"title":"When Do Persistent Supply Shocks Call for Hawkishness?","url":"https://ideas.repec.org/p/bfr/banfra/1054.html"},{"abstract":"We estimate a Structural Dynamic Factor Model for 165 NUTS 2 regions across 11 euro area countries over 2000–2023, decomposing regional GDP growth into common euro area, countryspecific, and regional components. This is the first structural shock decomposition at the regional level for the euro area, suitable to evaluate optimum currency area (OCA) properties along both shock-similarity and monetary policy transmission dimensions. Four findings emerge. First, the relative importance of common euro area shocks has increased steadily at both the country and union levels, indicating improving OCA properties, while country-specific components - most pronounced in peripheral economies - have declined, pointing to a gradual erosion of the border effect. Second, aggregate business cycle synchronization conceals substantial within-country heterogeneity, implying that the costs of relinquishing monetary policy autonomy are distributed unevenly across regions and countries. Third, euro area regional dynamics are driven predominantly by endogenous OCA convergence rather than specialization-induced divergence; regions with atypical sectoral compositions do face greater exposure to idiosyncratic shocks, but this reflects structural or geographic distinctiveness rather than integration-driven specialization. Fourth, monetary policy shocks generate smaller and more homogeneous regional output responses than demand or supply shocks, and transmission heterogeneity - while modestly increasing over the sample - reflects within-country regional divergence rather than cross-country fragmentation. Taken together, OCA properties at the regional and country levels are broadly comparable, and heterogeneous monetary transmission does not constitute a major threat to policy effectiveness.","also_at":[],"analysis":null,"authors":["Karlo Kotarac","Davor Kunovac","Ozana Nadoveza"],"date":"2026-07-23","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"a3617be0af91d6d2","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":7,"screen_reason":"Regional euro-area monetary transmission analysis relevant for policy and bond markets.","screening_tag":"DM","selected_in":[],"source":"hnb","source_name":"Croatian National Bank","tag":"DM","tag_inferred":false,"title":"The Regional Effects of Monetary Policy in the Euro Area: Does One Size Fit All or None?","url":"https://ideas.repec.org/p/hnb/wpaper/76.html"},{"abstract":"This paper studies how the prevailing level of public debt shapes the transmission of fiscal and monetary policy shocks in a tractable heterogeneous three-agent New Keynesian model. When households rely on the liquidity services of government bonds to self-insure against idiosyncratic risk, higher public indebtedness amplifies the deterioration in debt sustainability after expansionary government spending shocks. In such economies, fiscal expansions weaken precautionary bond demand, requiring the central bank to keep real interest rates higher for longer and thereby raising debt servicing costs and narrowing fiscal space. By contrast, the transmission of monetary expansions is largely invariant to the initial debt level, as such shocks have little effect on the insurance value of government bonds. These results highlight the central role of the liquidity premium and self-insurance motive in linking initial public indebtedness to long-run fiscal sustainability.","also_at":[],"analysis":null,"authors":["Cristiano Cantore","Matteo Gatto","Francesco Saverio Gaudio","Pascal Meichtry"],"date":"2026-07-23","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"2f68914c78359d7a","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":7,"screen_reason":"Explores how high public debt alters fiscal-monetary transmission, crucial for sovereign-risk and policy analysis.","screening_tag":"DM","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"DM","tag_inferred":true,"title":"Fiscal Sustainability when Public Debt is High: The Role of Portfolio Liquidity","url":"https://ideas.repec.org/p/bfr/banfra/1055.html"},{"abstract":"The results of nearly 100 prominent studies in empirical macroeconomics have been called into question by Baumeister and Hamilton (2018). We show that their concern about distributional asymmetry for a typical question of interest under a uniform prior with respect to the Haar measure is actually driven by an unacknowledged sign restriction. We also demonstrate that such a prior induces symmetric prior distributions over individual impulse responses conditional on the reduced-form parameters, or more generally when the prior over the reduced-form covariance matrix rules out correlation among the residuals, as in the typical implementation of the Minnesota prior. Furthermore, we provide a theory for avoiding the pitfalls of Baumeister and Hamilton’s critique. Key to our theory is a proposition establishing that any restriction can be decomposed into three types: scale, label, and economic. We use this theory to develop an algorithm for inference based on the unit modulus normalization that tackles a practical problem commonly faced by users of Bayesian SVAR methods.","also_at":[],"analysis":null,"authors":["Jonas E. Arias","Juan F. Rubio-Ramirez","Daniel F. Waggoner"],"date":"2026-07-22","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"33173e0d3394fabc","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":3,"screen_reason":"This is a technical methodological paper on Bayesian SVAR inference, primarily useful for researchers refining empirical macro models.","screening_tag":"Transversal","selected_in":[],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"Transversal","tag_inferred":false,"title":"Inference Based on Scale, Label, and Economic Restrictions","url":"https://ideas.repec.org/p/fip/fedpwp/103578.html"},{"abstract":"We develop a Transmission Growth-at-Risk (TGaR) framework that incorporates foreign financial vulnerabilities as predictors of U.S. downside growth risk. We distinguish financial conditions, which measure current tightness in credit markets, from financial vulnerabilities, which measure structural fragilities that can amplify shocks. Elevated foreign financial vulnerabilities are associated with lower U.S. growth-at-risk, with transmission through both trade linkages and dollar integration channels. Asset valuation pressures and financial sector leverage abroad have the largest estimated amplification effects. Financial conditions primarily affect near-term tail risk, while foreign vulnerabilities weigh on U.S. GDP at a medium-term horizon. Out of sample, adding foreign vulnerabilities raises the predictive score by 53 percent at the 8-quarter horizon. Crisis-episode evidence points to the same interpretation. These findings show that monitoring foreign financial vulnerabilities is important for gauging U.S. growth prospects.","also_at":[],"analysis":null,"authors":["Sai Ma","Viktors Stebunovs","Judit Temesvary"],"date":"2026-07-17","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"730e7dc7c27da8e3","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":8,"screen_reason":"Foreign financial vulnerabilities linked to US growth-at-risk, important for macro risk monitoring.","screening_tag":"Transversal","selected_in":[],"source":"fed-ifdp","source_name":"Federal Reserve Board, IFDP","tag":"Transversal","tag_inferred":false,"title":"Transmission Growth-at-Risk: How Foreign Financial Vulnerabilities Shape U.S. Growth Prospects","url":"https://ideas.repec.org/p/fip/fedgif/103562.html"},{"abstract":"We show that operationally similar central bank asset purchases can have markedly different effects. Combining security-level data on the Federal Reserve’s duration-adjusted asset holdings with narrative event-based identification reveals that purchases made for accommodation strongly affect yields, while purchases made for market functioning primarily enhance liquidity. We advance a partial equilibrium model of an intermediated bond market that can reconcile these findings. When trading flow is orderly, large-scale asset purchases (LSAPs) operate through the expected supply of duration with large effects on yields. When trading flow is disorderly, LSAPs reduce dealer inventories, improve liquidity, and compress bid-ask spreads.","also_at":[],"analysis":null,"authors":["Andrew Lee Smith","Victor J. Valcarcel"],"date":"2026-07-17","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"6cc81a840ed816f6","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":8,"screen_reason":"Distinguishes LSAP effects on yields vs liquidity, directly impacting bond market expectations.","screening_tag":"DM","selected_in":[],"source":"fed-kansas-city","source_name":"Federal Reserve Bank of Kansas City","tag":"DM","tag_inferred":false,"title":"Rethinking Central Bank LSAPs: The Power of Market Functioning Purchases","url":"https://ideas.repec.org/p/fip/fedkrw/103551.html"},{"abstract":"This paper proposes a flexible approach to departing from full information rational expectations (FIRE) in DSGE models using the sequence space framework. We implement a reduced-form behavioural expectations process in which agents can simultaneously overreact or underreact to current economic conditions and underreact to news, and we derive an associated behavioural expectations solver deployable to a wide class of DSGE and HANK models. The approach nests several different expectations models as special cases while remaining agnostic on the precise source of belief frictions. We apply it to a medium-scale two-asset HANK model and jointly estimate the model’s dynamic and behavioural parameters on US business cycle data, including inflation expectation data. Behavioural expectations quantitatively improve the empirical fit of the model and the qualitative properties of its impulse response functions.","also_at":[],"analysis":null,"authors":["Jamie Lenney","Biagio Rosso"],"date":"2026-07-17","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"3ea977a666488e71","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":7,"screen_reason":"The paper introduces a flexible framework for modeling non-rational expectations in DSGE/HANK models, improving the empirical fit for US business cycle analysis.","screening_tag":"DM","selected_in":[],"source":"boe","source_name":"Bank of England Staff Working Papers","tag":"DM","tag_inferred":false,"title":"A flexible deviation from FIRE in the sequence space","url":"https://ideas.repec.org/p/boe/boeewp/023319.html"},{"abstract":"Both historically and today, support of aging parents has largely taken the form of in-kind transfers that require physical proximity, such as housing and caregiving. If Social Security substitutes for such support, it can relax constraints on where recipients' children live and work. We investigate the long-run intergenerational effects of the early Social Security program, exploiting within-occupation, cross-industry differences in coverage, and a new dataset linking parents to their children's later-life outcomes. We find that sons whose parents had greater predicted coverage moved farther from their childhood homes, earned more, and lived in better neighborhoods late in life. We find no such effects for daughters, who tended to provide forms of support less easily replaced by Social Security. The gains considerably exceeded the associated Social Security benefits for the average family, with migration to better-matched labor markets a likely key driver. We propose that the early program enabled families to realize gains from migration that were back-loaded, uncertain, and difficult to contract on.","also_at":[],"analysis":null,"authors":["Daniel Fetter","Lee Lockwood","Paul Mohnen"],"date":"2026-07-16","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"db5a0d12fd0c939b","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":3,"screen_reason":"The paper examines historical intergenerational labor mobility effects of Social Security, offering limited direct insight for current monetary or fiscal policy.","screening_tag":"DM","selected_in":[],"source":"fed-atlanta","source_name":"Federal Reserve Bank of Atlanta","tag":"DM","tag_inferred":true,"title":"Long-Run Intergenerational Effects of Social Security","url":"https://ideas.repec.org/p/fip/fedawp/103553.html"},{"abstract":"We estimate a discrete-time Markov transition model of auto loan performance over the 2000-2025 period using multinomial logistic regressions. Using rolling pseudo out-of-sample forecasts, we document persistent declines in the sensitivity of the probability of default to an unemployment shock in both the global financial crisis and Covid recessions. The estimated effect of a 1 percentage point increase in unemployment on default risk declined from 16 percent in 2006 to 3 percent post-2020. Two-year cumulative default forecasts over 2020-2021 using pre-pandemic parameters overstate actual defaults by 100 basis points (25 percent), with forecast errors largest in absolute terms for subprime borrowers and largest in relative terms for prime borrowers. The instability persists after controlling for forbearance usage and pandemic-period dummy variables, and is driven primarily by changes in macroeconomic relationships rather than borrower composition. These findings have implications for stress testing models and loss forecasting practices that rely on stable unemployment-default relationships.","also_at":[],"analysis":null,"authors":["Nicholas Fritsch","Edward Simpson Prescott"],"date":"2026-07-16","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"93c9429d0ab94a08","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":7,"screen_reason":"Shows macro parameter instability affecting loan loss forecasts, relevant for stress testing and credit markets.","screening_tag":"DM","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"DM","tag_inferred":true,"title":"Macroeconomic Parameter Instability in Auto Loan Loss Models","url":"https://ideas.repec.org/p/fip/fedcwq/103571.html"},{"abstract":"A substantial portion of corporate debt remains hidden from balance sheets. I document two forms of off-balance-sheet leverage in nonfinancial corporations: operating leases (pre-2019) and intraperiod borrowing—short-term debt issued and repaid within reporting periods, which I am the first to study in nonfinancial firms. Approximately 29 percent of publicly traded firms used substantial operating leases and 12 percent show evidence of substantial intra-period borrowing, with a disproportionate subset using both types of hidden debt. Firms using substantial hidden leverage are generally smaller, more reliant on short-term funding, are less monitored by sophisticated market participants, and report lower leverage, suggesting they use off-balance-sheet debt to project false leverage profiles. When accounting changes in 2019 revealed substantial operating leases, affected firms subsequently cut capital expenditures by 25 percent and R&D by 14 percent, faced heightened risks of executive turnover and stakeholder scrutiny, and experienced more frequent accounting problems. Critically, revelation of substantial operating leases caused these exposed firms to curtail their intra-period borrowing and to raise their reported non-lease leverage.","also_at":[],"analysis":null,"authors":["Cody Kallen"],"date":"2026-07-16","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"0f472f2c6731f062","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":8,"screen_reason":"The study identifies significant hidden corporate leverage, which has direct implications for assessing credit risk and corporate financial health.","screening_tag":"DM","selected_in":[],"source":"fed-ifdp","source_name":"Federal Reserve Board, IFDP","tag":"DM","tag_inferred":true,"title":"Hidden Leverage in Nonfinancial Corporations","url":"https://ideas.repec.org/p/fip/fedgif/103561.html"},{"abstract":"How monetary policy is implemented can have significant implications for the dynamics of the central bank’s balance sheet. If liquid deposits increase the demand for reserves (Lopez-Salido and Vissing-Jorgensen 2025), then the “ample” level of reserves needed to close the spread between the policy rate and interest on reserves is itself a function of liquid deposits. The supply of reserves will continue to normalize after first reaching ample levels and until liquid deposits return to trend as well. Furthermore, if the supply of reserves encourages deposit creation (Acharya et al. 2024), then a feedback loop arises that can amplify the persistence of elevated deposits and even lead to explosive dynamics. An off-the-shelf calibration exercise finds that even modest amounts of intrinsic deposit persistence could trigger explosive dynamics. Attenuating the response of ample reserves to deposits removes the risk of instability at a modest cost in terms of rate deviations. Simulations with stable roots show that reserves first reach ample earlier and at a higher level than expected by the demand of reserves alone. However, the supply of reserves may decrease further thereafter, at least relative to trend, as liquid deposits remain elevated in the transition period.","also_at":[],"analysis":null,"authors":["Roc Armenter"],"date":"2026-07-15","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"80da0b55e8484134","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":10,"screen_reason":"The paper directly addresses the mechanics of central bank balance sheet normalization and the stability of reserve supply, which is critical for current monetary policy.","screening_tag":"DM","selected_in":[],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"DM","tag_inferred":true,"title":"The Dynamics of Ample Reserves","url":"https://ideas.repec.org/p/fip/fedpwp/103530.html"},{"abstract":"Place-based policies are often caught between two potentially conflicting aims: (i) directing aid to needy communities and (ii) spurring investment. We study this tradeoff in the context of the Opportunity Zones (OZ) program. Leveraging unique phase-level microdata on commercial construction projects, we show that US state governors prioritized designating tracts where construction projects were already being planned. About two-thirds of the greater construction growth in OZs can be attributed to this selection. States prioritizing tracts with greater investment opportunities observed larger construction increases in designated tracts. We calibrate a structural model to quantify the effects of the program and examine counterfactuals under alternative preferences or eligibility criteria.","also_at":[],"analysis":null,"authors":["David P. Glancy","Robert J. Kurtzman","Lara Loewenstein"],"date":"2026-07-15","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"3e2be1d1ab9bf3c7","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":7,"screen_reason":"This analysis of Opportunity Zones provides insights into the effectiveness and selection bias of place-based fiscal incentives for commercial real estate investment.","screening_tag":"DM","selected_in":[],"source":"fed-cleveland","source_name":"Federal Reserve Bank of Cleveland","tag":"DM","tag_inferred":false,"title":"CRE Development Potential and the Selection of Opportunity Zones","url":"https://ideas.repec.org/p/fip/fedcwq/103569.html"},{"abstract":"The expectations channel of monetary policy is state dependent because households endogenously adjust attention to macroeconomic conditions. We develop a behavioral framework in which attention trades off forecast accuracy against cognitive cost, so monetary policy operates through an expectations multiplier. Using the Michigan Survey, we proxy attentiveness from whether households’ reading of business conditions matches realized outcomes, measured before identified policy shocks arrive. Policy news moves inflation beliefs primarily among attentive households, especially those with greater economic exposure; others barely respond. In the aggregate, pass-through scales with attentiveness and strengthens in recessions and high-uncertainty periods, making monetary transmission nonlinear.","also_at":[],"analysis":null,"authors":["Jaemin Jeong","Eunseong Ma","Choongryul Yang"],"date":"2026-07-14","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"9f2aaa864a4b9416","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":8,"screen_reason":"Links household attention to monetary transmission, informing policy impact on inflation expectations.","screening_tag":"DM","selected_in":[],"source":"fed-atlanta","source_name":"Federal Reserve Bank of Atlanta","tag":"DM","tag_inferred":true,"title":"Attention-Dependent Monetary Transmission to Household Beliefs","url":"https://ideas.repec.org/p/fip/fedawp/103552.html"},{"abstract":"Trade policy in advanced economies is closely intertwined with concerns about technology and geopolitical rivalry. Using product-level data on export-related trade interventions, we characterize how contemporary export-side interventions are allocated across products, destinations, and bilateral trade relationships. We show that export controls are broad in regulatory scope but economically concentrated on high-value trade flows. Export controls disproportionately target high-technology products and economically important trade relationships, while geopolitical distance shapes their allocation in a nonlinear manner, with the strongest associations for high-technology trade between geopolitical rivals. Finally, a decomposition of targeting patterns shows that modern export controls are organized primarily around products rather than destinations, consistent with a technology-centered regulatory framework.","also_at":[],"analysis":null,"authors":["Bontu Ankit Patro","Ana Maria Santacreu"],"date":"2026-07-14","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"1fbe5ab0b1ff246d","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":9,"screen_reason":"This study provides a timely framework for understanding how geopolitical tensions and export controls are reshaping global trade and technology supply chains.","screening_tag":"Transversal","selected_in":[],"source":"fed-st-louis","source_name":"Federal Reserve Bank of St. Louis","tag":"Transversal","tag_inferred":false,"title":"Geopolitical Distance and Targeted Trade: Evidence from Product-Level Export Controls","url":"https://ideas.repec.org/p/fip/fedlwp/103525.html"},{"abstract":"Elevated mortgage rates discourage homeowners from moving, as relocating triggers a reset of mortgage terms — a phenomenon termed “lock-in.” This paper examines whether elevated rates explain recent real estate market tightness: low transaction volumes, low time-on-market, and sustained price growth. Using transaction-level data, we estimate survival models of housing tenures — the probability of sale as a function of tenure and market conditions, including mortgage rate gaps. These estimates quantify missing sellers who have not entered the market because of elevated rates. We then calibrate a search and matching model measuring mortgage rate effects on buyers alongside seller lock-in effects. Results indicate lock-in causes sellers to withdraw, reducing transactions. However, buyers are more sensitive to mortgage rates than sellers are to lock-in, meaning a rate drop would increase sales volumes but not reduce market tightness.","also_at":[],"analysis":null,"authors":["Aaron Graybill","Kyle Mangum"],"date":"2026-07-10","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"bfc359f11d6ada04","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":8,"screen_reason":"Examines mortgage lock-in effects on housing transactions, directly informing real-estate market and rate-policy analysis.","screening_tag":"DM","selected_in":[],"source":"fed-philadelphia","source_name":"Federal Reserve Bank of Philadelphia","tag":"DM","tag_inferred":true,"title":"Is Mortgage Lock-In Responsible for Housing Market Tightness?","url":"https://ideas.repec.org/p/fip/fedpwp/103512.html"},{"abstract":"This paper examines the effects of cryptocurrency regulation on price deviations in the Bitcoin market, focusing on regulatory implementations rather than announcements. I construct a unique database of regulations across 28 countries since 2009, categorized into seven types, and analyse Bitcoin price data since September 2013. Our findings indicate that the Law of One Price does not hold in the Bitcoin market. Contrary to initial conjectures, more regulated markets exhibit higher price convergence with the USD benchmark. According to the type of regulation, this result is mixed. Regulations enhancing reliability and transparency, such as the expansion of securities laws, banking and payment regulations, and the implementation of regulatory sandboxes foster price convergence. In contrast, partial bans—primarily targeting banks—exacerbate price divergence, underscoring the significant role of financial institutions in the Bitcoin market. Additionally, anti-money laundering/countering the financing of terrorism (AML/CFT) laws reduce local prices regardless of USD price level, suggesting the cryptoasset's use in illicit activities.","also_at":[],"analysis":null,"authors":["Mathilde Dufouleur"],"date":"2026-07-10","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"56a663aa1a626d68","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":7,"screen_reason":"Shows how crypto regulation shapes Bitcoin price convergence, informing market and policy views on digital assets.","screening_tag":"Transversal","selected_in":[],"source":"banque-de-france","source_name":"Banque de France Working Papers","tag":"Transversal","tag_inferred":false,"title":"Bitcoin Market Segmentation and Regulatory Effect","url":"https://ideas.repec.org/p/bfr/banfra/1052.html"},{"abstract":"Firms frequently revise not only their expectations, but also how uncertain they feel about those expectations. Using the U.S. Survey of Business Uncertainty, we study perceived uncertainty about firms’ own sales and employment growth. Reported uncertainty rises after larger revisions to firms’ point forecasts, with the strongest response to the most recent revision. This recency pattern remains visible outside elevated sectoral-volatility episodes. We develop a model in which agents learn about a constant-volatility process but recall older observations noisily. Noisy recall gives recent surprises disproportionate influence, even when objective volatility is constant.","also_at":[],"analysis":null,"authors":["Miguel Acosta","Yeji Sung"],"date":"2026-07-10","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"1c4076a93cc0e1f9","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":4,"screen_reason":"Analyzes firm uncertainty dynamics, modest relevance for macro forecasting but limited direct market implications.","screening_tag":"DM","selected_in":[],"source":"fed-san-francisco","source_name":"Federal Reserve Bank of San Francisco","tag":"DM","tag_inferred":false,"title":"Recency Effects in Perceived Uncertainty","url":"https://ideas.repec.org/p/fip/fedfwp/103549.html"},{"abstract":"The general search for US dollars in forward currency markets, combined with the balance-sheet constraints of intermediary dealers, induces persistent failure of covered interest parity (CIP). We investigate these CIP deviations across the entire maturity spectrum by analyzing the daily dynamics of the USD/CHF cross-currency basis curve. Applying functional principal component analysis, we identify three components that explain virtually all curve dynamics: a persistent, slow-moving level component, a temporary steepener, and a short-end component inducing sharp basis widenings and contractions around quarter-end dates. We provide empirical evidence that CIP-implied carry opportunities and US monetary policy announcements widen the entire basis curve, whereas Fed swap line announcements tend to narrow it. During periods of global turmoil, the slope inverts in response to rising credit and capital stress among dealer banks, while funding stress steepens the curve as swap line usage mitigates short-end distortions. Reporting date effects, funding stress, and deteriorating market liquidity widen the basis primarily at the short- end. We further show that regulatory reporting dates generate systematic window-dressing distortions not only at the short end but also in the slope of the basis curve. This effect has weakened since 2022, which is consistent with recent changes in the regulatory landscape.","also_at":[],"analysis":{"correction":null,"current_prompt":false,"evidence":"analyzing the daily dynamics of the USD/CHF cross-currency basis curve","flags":["tag differs from screening (Transversal); review"],"in_issue":false,"rationale":"The study focuses on the USD/CHF currency pair, which involves two advanced economies.","relevance_note":"Understanding these drivers helps market participants interpret liquidity conditions and the effectiveness of central bank interventions in global funding markets.","summary":"This paper examines the dynamics of the USD/CHF cross-currency basis curve to understand persistent violations of covered interest parity (CIP). The authors identify three functional components that explain curve movements, highlighting the roles of dealer balance-sheet constraints, US monetary policy, and regulatory reporting dates in driving these deviations.","takeaways":["Three functional components explain nearly all dynamics of the USD/CHF cross-currency basis curve.","US monetary policy announcements widen the basis curve, while Fed swap lines help narrow it.","Regulatory reporting dates and funding stress specifically cause sharp basis widenings at the short end of the curve."],"wording_correction":null},"authors":["David Borner","Heiko Sorg"],"date":"2026-07-09","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"756ee29587d79643","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":9,"screen_reason":"Identifies drivers of cross-currency basis movements, directly relevant to FX markets and monetary-policy transmission.","screening_tag":"Transversal","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"DM","tag_inferred":false,"title":"CIP violations as functional components of the dynamic cross-currency basis curve","url":"https://ideas.repec.org/p/snb/snbwpa/2026-09.html"},{"abstract":"We present a microfounded information mechanism that causes monetary policy transmission lags to be endogenously variable, even when firms are rational and face no exogenous costs of changing prices. Firms must form two distinct expectations, namely, a forecast of future demand and a nowcast of the current unobserved state, because information arrives at different frequencies. We model this setting as a partial-equilibrium, continuous-time optimal stopping problem in which firms receive a continuous noisy signal and a discrete precise signal. Because exercising the timing option to reprice has a sunk opportunity cost, an endogenous inaction region emerges; firms rationally delay adjustment until the discrete signal provides sufficient actionable information. The resulting dynamics reproduce observed Swiss price-adjustment patterns and the highly variable transmission lags of monetary policy. Thus, the framework provides a rational-agent microfoundation for lag heterogeneity.","also_at":[],"analysis":null,"authors":["Diego M. Hager","Samuel Reynard"],"date":"2026-07-08","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"8ff0d27ae99ff6cc","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":6,"screen_reason":"Microfounded model of monetary-policy transmission lags explains price-adjustment dynamics, pertinent to policy impact assessment.","screening_tag":"DM","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Forecasts, nowcasts and monetary policy lags","url":"https://ideas.repec.org/p/snb/snbwpa/2026-08.html"},{"abstract":"We develop a business cycle model with perfectly competitive product and labor markets in which production requires a minimum labor input, generating endogenous capacity utilization. The aggregate production function is kinked, featuring constant returns to scale below capacity—typically in recessions—and decreasing returns at capacity in expansions. Motivated by new empirical evidence that narratively identified labor tax shocks have significantly larger effects on hours and output when capacity utilization is below trend, we calibrate the model to U.S. data and show that the aggregate hours elasticity is higher in recessions, differing markedly from the micro elasticity implied by preferences.","also_at":[],"analysis":null,"authors":["Domenico Ferraro","Giuseppe Fiori","Damián Pierri"],"date":"2026-07-08","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"0fbda26cef9b5b36","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":6,"screen_reason":"The model offers a nuanced view of how labor market responses to policy shocks vary across the business cycle, relevant for macro forecasting.","screening_tag":"DM","selected_in":[],"source":"fed-ifdp","source_name":"Federal Reserve Board, IFDP","tag":"DM","tag_inferred":false,"title":"Multi-Plant Firms, Variable Capacity Utilization, and the Aggregate Hours Elasticity","url":"https://ideas.repec.org/p/fip/fedgif/103520.html"},{"abstract":"The utilisation rate of technical capacity is a key indicator of an economy's cyclical position and plays a crucial role in the estimation of production functions. Despite its importance, economy-wide measures of capacity utilisation are often not available. Instead, single sector series, typically that for manufacturing, are used as a proxy. However, this approach overlooks the heterogeneity of sectoral developments. Using Swiss data, we develop a methodology to estimate a series of aggregate capacity utilisation. Our measure covers eleven sectors, accounting for two thirds of the economy, and is mostly based on survey data retropolated back to Q1 1995. The sectoral shares of the capital stock are used to aggregate the sectoral capacity utilisation series. Several evaluations show that our aggregate series provides valuable information for the analysis of overall economic activity and is superior to the use of manufacturing capacity utilisation. Our methodology can serve as a basis for the construction of an aggregate capacity utilisation rate series for other countries.","also_at":[],"analysis":null,"authors":["Andreas Bachmann","Elizabeth Steiner"],"date":"2026-07-07","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"654159164db20d5f","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":4,"screen_reason":"Develops aggregate capacity-utilisation metric for Switzerland, mainly methodological with modest market relevance.","screening_tag":"DM","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Economy-wide capacity utilisation rate: Methodological framework and application to Swiss data","url":"https://ideas.repec.org/p/snb/snbwpa/2026-07.html"},{"abstract":"Innovation booms are often fueled by easy financing, allowing new technology firms to pay high wages that attract skilled labor. Studying the information and communication technology (ICT) boom in the late 1990s, we show that high-skill workers who joined the ICT sector during the boom experienced sizeable long-term earnings losses. These earnings patterns stem from accelerated skill obsolescence rather than worker selection or the subsequent bust in the ICT sector. Moreover, during the boom, financing disproportionately flowed to firms whose workers would later experience the largest productivity declines, amplifying the negative effect of labor reallocation on aggregate human capital accumulation.","also_at":[],"analysis":null,"authors":["Johan Hombert","Adrien Matray"],"date":"2026-07-06","date_kind":"published","date_precision":"day","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"regional-fed","id":"20089e63378cf40f","issue_date":null,"kind":"working_paper","publication_month":"2026-07","relevance":5,"screen_reason":"The paper explores the long-term labor market consequences of innovation-driven capital misallocation, providing a historical perspective on tech-sector labor dynamics.","screening_tag":"DM","selected_in":[],"source":"fed-atlanta","source_name":"Federal Reserve Bank of Atlanta","tag":"DM","tag_inferred":true,"title":"Innovation Booms, Easy Financing, and Human Capital Accumulation","url":"https://ideas.repec.org/p/fip/fedawp/103489.html"},{"abstract":"Drawing on a novel dataset of more than 10,000 speeches from 1914 to 2024, we track the evolution of Federal Reserve communication and identify three stylized facts. (1) Although the overall volume of speeches has declined over the past decade, the composition of Fed communication has remained notably consistent for forty years, with Federal Reserve Bank (FRB) presidents accounting for the majority of public engagements. Variation in communicative participation is driven primarily by dispositional factors, including professional background, gender, and other speaker-specific idiosyncrasies, rather than the particular time frame in which the speeches were delivered. (2) While governors' communication reacts to financial stability, FRB presidents' schedules remain decoupled from both regional shifts in their districts and broader macroindicators. (3) A \"complexity paradox\" has emerged: while the syntactic structure simplifies during crises, the conceptual density increases. When adjusted for abstractness, the communication patterns of governors and FRB presidents appear remarkably similar.","also_at":[],"analysis":null,"authors":["Thomas Lustenberger","Enzo Rossi","Anna Zeitz"],"date":"2026-06-22","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"6cc99cc040376121","issue_date":null,"kind":"working_paper","publication_month":"2026-06","relevance":6,"screen_reason":"Provides extensive Fed speech data and stylized facts on communication, useful for understanding monetary policy signaling.","screening_tag":"DM","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"DM","tag_inferred":false,"title":"Central bank communication: New data and stylized facts from a century of Fed speeches","url":"https://ideas.repec.org/p/snb/snbwpa/2026-06.html"},{"abstract":"This paper applies machine learning methods and anomaly detection to sudden stop analysis of portfolio flows. Using the isolation forest methodology, univariate as well as bivariate sudden stops of equity and bond fund flows to emerging markets are generated. An anomaly score and an anomaly classification are provided. The results point to an increase in anomalous portfolio flows to emerging markets in recent years. In addition, the isolation forest methodology appears to yield better results than the traditional approach to sudden stop analysis in classifying anomalies connected with the recent capital flow volatility related to the outbreak of the COVID-19 pandemic as well as the interest rate reversal in advanced economies in recent years. The bivariate approach to anomaly detection is better able to identify anomalous episodes of financial stress, where both equity and bond markets are simultaneously affected. Most of the classified anomalies are related to fund flow stops (i.e. simultaneous stops to both equity and bond flows) or surges (i.e. surges in both equity and bond flows). In general, univariate and bivariate anomaly detection using machine learning techniques can play an important part and lead to a better understanding of sudden stops and surges.","also_at":[],"analysis":{"correction":null,"current_prompt":false,"evidence":"sudden stop analysis of equity and bond fund flows to emerging markets","flags":[],"in_issue":false,"rationale":"The paper focuses exclusively on the analysis of portfolio fund flows directed toward emerging market economies.","relevance_note":"The findings provide a new analytical framework for monitoring capital flow volatility and financial stress in emerging markets, which is critical for assessing systemic risk.","summary":"This paper uses machine learning, specifically the isolation forest method, to detect sudden stops in equity and bond fund flows to emerging markets. The authors find that this bivariate approach identifies financial stress more effectively than traditional methods, particularly during the COVID-19 pandemic and recent interest rate shifts.","takeaways":["Machine learning improves the detection of anomalous portfolio flow episodes compared to traditional sudden stop analysis.","Bivariate analysis better captures financial stress when equity and bond markets are simultaneously affected.","Anomalous portfolio flows to emerging markets have increased in recent years."],"wording_correction":null},"authors":["Griebsch, Susanne","Röthig, Andreas"],"date":"2026-06-08","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"23b6c1b05235a8fd","issue_date":null,"kind":"working_paper","publication_month":"2026-06","relevance":8,"screen_reason":"Applies ML to detect sudden stops in EM equity and bond flows, directly informing capital-flow risk assessments.","screening_tag":"EM","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"EM","tag_inferred":false,"title":"Bivariate sudden stop analysis of equity and bond fund flows to emerging markets using isolation forest","url":"https://ideas.repec.org/p/zbw/bubdps/341638.html"},{"abstract":"The US dollar (USD) is involved in 88% of global foreign exchange transactions, partly due to its role as a vehicle currency. Using high-frequency data from primary interdealer platforms, we develop a novel methodology to identify USD cross-trades. We show both theoretically and empirically that such trades can generate price fluctuations in USD exchange rates. Employing an instrumental variables approach, we find that increased cross-trading activity amplifies aggregate USD volatility. These results highlight a fundamental trade-off: while dollar dominance enhances market liquidity, it also increases the currency’s exposure to shocks originating in other currency pairs.","also_at":[],"analysis":null,"authors":["Cara Bordier","Lukas Frei","Simon Stalder"],"date":"2026-05-13","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"4233fc7b4b999f58","issue_date":null,"kind":"working_paper","publication_month":"2026-05","relevance":8,"screen_reason":"Identifies how USD cross-trading drives dollar volatility, crucial for global FX market risk assessment.","screening_tag":"Transversal","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"Transversal","tag_inferred":false,"title":"Dollar dominance: A source of dollar volatility?","url":"https://ideas.repec.org/p/snb/snbwpa/2026-05.html"},{"abstract":"Geopolitical risk is a major concern for the euro area, yet widely used measures largely reflect a US perspective. We introduce a geopolitical risk indicator tailored to the euro area using local European news sources. Shocks to this index have significant recessionary and inflationary consequences in the euro area, effects that would be missed when relying on the corresponding US-based measure. We estimate that the Russo-Ukrainian War imposed substantial output losses and inflationary pressures on the euro area in 2022. Combining structural scenario analysis with end-of-sample now-casting, we show that euro area prospects are highly sensitive to future developments in geopolitical risk. We complement these analyses with two news-based measures of sanctions intensity and shortages for the euro area.","also_at":[],"analysis":{"correction":null,"current_prompt":false,"evidence":"Geopolitical risk is a major concern for the euro area","flags":[],"in_issue":false,"rationale":"The paper focuses exclusively on the economic impact of geopolitical risk within the euro area.","relevance_note":"Policymakers and market participants should note that regional geopolitical risk metrics are essential for accurately forecasting economic performance in the euro area.","summary":"This paper introduces a new geopolitical risk indicator specifically designed for the euro area using local European news sources. The authors find that shocks to this index cause significant recessionary and inflationary impacts that are not captured by US-centric measures, highlighting the specific economic consequences of events like the Russo-Ukrainian War.","takeaways":["Geopolitical risk measures tailored to the euro area provide a more accurate assessment of local economic impacts than US-based indices.","Shocks to the new euro area risk index lead to measurable recessionary and inflationary consequences.","The Russo-Ukrainian War caused substantial output losses and inflationary pressures within the euro area during 2022."],"wording_correction":null},"authors":["Bondarenko, Yevheniia","Kang, Nayeon","Lewis, Vivien","Rottner, Matthias","Schüler, Yves"],"date":"2026-05-06","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"c6643fd5794826b7","issue_date":null,"kind":"working_paper","publication_month":"2026-05","relevance":9,"screen_reason":"Develops a region-specific geopolitical risk index for the euro area, demonstrating its direct impact on inflation and output.","screening_tag":"DM","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"DM","tag_inferred":false,"title":"Geopolitical risk in the euro area: Measurement and transmission","url":"https://ideas.repec.org/p/zbw/bubdps/341100.html"},{"abstract":"We use a randomized experiment in the Bundesbank Online Panel-Households (n ≈ 3, 900) to show that the estimated link between inflation expectations and household consumption flips sign depending on survey wording. This finding reconciles prior contradictory results and has direct implications for central bank survey design. Our experiment systematically varies elicitation framing of consumption question along three dimensions: the reference unit (individual vs. household), the time horizon (past one, 3, or 12 months), and the question type (attitudinal, planned, qualitative and quantitative recall-based). We find that the time horizon and question type significantly influence the estimated relationship between inflation expectations and durable consumption. While the average effect is weak, its sign and magnitude vary strongly with question design. Planned spending and attitudinal questions, such as whether it is a good time to buy, produce very similar negative associations, suggesting that respondents interpret the former as a proxy for future intentions. In contrast, quantitative recall-based questions on past spending yield a modestly positive link, especially for shorter horizons. These results highlight the critical role of survey design in shaping behavioral measurements, offering a novel explanation for mixed findings in the literature and guidance for both research and policy.","also_at":[],"analysis":null,"authors":["Assenza, Tiziana","Huber, Stefanie J.","Mogilevskaja, Anna","Schmidt, Tobias"],"date":"2026-05-05","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"6f952709d4e9efb2","issue_date":null,"kind":"working_paper","publication_month":"2026-05","relevance":5,"screen_reason":"Experimental evidence on survey wording affecting inflation-expectation-spending link, relevant for data interpretation.","screening_tag":"DM","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"DM","tag_inferred":false,"title":"When wording changes what we find: The impact of inflation expectations on spending","url":"https://ideas.repec.org/p/zbw/bubdps/341099.html"},{"abstract":"We examine how foreign macroprudential tightening transmits through multinational firms' internal capital markets. Using subsidiary exposure to countercyclical capital buffer (CCyB) increases, we find that while bank credit to subsidiaries falls 10 percent, parents fully substitute this via internal debt. Parents refinance this internal support by increasing borrowing from domestic banks and nonbanks, meeting the substitution needs of their subsidiaries. As a result, foreign CCyB tightening increases the exposure and risk borne by the parent's home jurisdiction. These findings reveal an unintended spillover: tightening in one country raises credit exposure and thereby borrower risk borne by lenders elsewhere through proactive internal financial redistributions within multinational corporations.","also_at":[],"analysis":null,"authors":["Imbierowicz, Björn","Loeffler, Axel","Ongena, Steven","Vogel, Ursula"],"date":"2026-04-08","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"b64ac9063b5fb5a5","issue_date":null,"kind":"working_paper","publication_month":"2026-04","relevance":8,"screen_reason":"Shows macroprudential spillovers via multinational internal capital markets, affecting credit risk across jurisdictions.","screening_tag":"Transversal","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"Transversal","tag_inferred":false,"title":"How CCyBs travel – Internal capital markets & domestic borrowing","url":"https://ideas.repec.org/p/zbw/bubdps/340012.html"},{"abstract":"Hybrid threats encompass a range of hostile activities aimed at achieving geopolitical objectives, including cyberattacks, infrastructure sabotage, espionage, economic and political coercion, disinformation, and other forms of hybrid warfare. We construct a Geopolitical Hybrid Threat (GHT) index based on newspaper coverage of these activities. The index surges from the mid-2010s, surpassing the high levels observed during the late Cold War. Using a narrative instrument in a vector autoregression, we find that hybrid threat shocks suppress aggregate demand by raising uncertainty, reducing confidence, and tightening financial conditions, while triggering policy responses in the form of increased defense spending and monetary easing.","also_at":[],"analysis":null,"authors":["Metiu, Norbert","Völpel, Martin"],"date":"2026-03-30","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"32de1de040482d8e","issue_date":null,"kind":"working_paper","publication_month":"2026-03","relevance":8,"screen_reason":"Shows hybrid threats affect demand, confidence and trigger policy responses, key for macro outlook.","screening_tag":"Transversal","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"Transversal","tag_inferred":false,"title":"Geopolitical hybrid threats","url":"https://ideas.repec.org/p/zbw/bubdps/340011.html"},{"abstract":"Since 2018, tariffs have re-emerged as a tool for protecting domestic economies, particularly in the US. This paper examines the macroeconomic and welfare effects of various import tariff scenarios using a four-region dynamic general equilibrium model with a multi-sectoral production network. The scenarios include unilateral US tariffs, coordinated US-EU tariffs, Chinese retaliation, Europe's non-participation, and sector-specific versus broad tariffs. Our results show that tariffs initially boost domestic value-added output by making local goods relatively cheaper. While consumption can increase permanently, the output benefits are short-lived. Increased production costs and reduced global income largely offset the output gains over time. Tariff-targeted countries have an incentive to retaliate, and when they do, these output/consumption gains do not materialize. As a result, welfare effects are negative. Regardless of direct involvement in tariff conflicts, the rest of the world suffers from reduced aggregate income. The effects of tariffs and strategic interac- tions depend on which sectors are subject to tariffs. Overall, tariffs appear to be an inefficient tool for economic protection due to the high probability of retaliation.","also_at":[],"analysis":{"correction":null,"current_prompt":false,"evidence":"tariffs have re-emerged as a tool for protecting domestic economies, particularly in the US.","flags":["tag differs from screening (Transversal); review"],"in_issue":false,"rationale":"The paper focuses on the macroeconomic implications of tariffs specifically within the context of the US economy.","relevance_note":"The findings suggest that protectionist trade policies are inefficient tools for long-term economic growth, as they trigger negative global income effects and retaliatory cycles.","summary":"This paper uses a four-region dynamic general equilibrium model to analyze the macroeconomic consequences of punitive tariffs. It finds that while tariffs may provide temporary boosts to domestic output, these gains are eventually offset by higher production costs and reduced global income, ultimately leading to negative welfare effects.","takeaways":["Tariffs provide only short-lived output benefits that are eventually negated by increased production costs.","Retaliation by targeted countries eliminates potential consumption and output gains.","Tariff conflicts reduce aggregate income for the rest of the world, regardless of direct participation."],"wording_correction":null},"authors":["Ernst, Anne","Hinterlang, Natascha","Jäger, Marius","Stähler, Nikolai"],"date":"2026-03-23","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"c58c15ecb996f41a","issue_date":null,"kind":"working_paper","publication_month":"2026-03","relevance":9,"screen_reason":"Assesses US-led tariff scenarios on global output and welfare, directly relevant to trade policy and markets.","screening_tag":"Transversal","selected_in":[],"source":"bundesbank","source_name":"Deutsche Bundesbank Discussion Papers","tag":"DM","tag_inferred":false,"title":"America first? The macroeconomic implications of punitive tariffs in a production network model","url":"https://ideas.repec.org/p/zbw/bubdps/340010.html"},{"abstract":"We develop a resource-efficient methodology for measuring economic outlook in news text that combines document embeddings with synthetic training data generated by large language models. Applied to 27 million news articles, the resulting indicator significantly improves GDP growth forecast accuracy and captures sentiment shifts weeks before official releases, proving particularly valuable during crises. The indicator outperforms both survey-based benchmarks and traditional dictionary methods and is interpretable, allowing identification of specific drivers of economic sentiment. Our approach addresses key institutional constraints: it performs sentiment classification locally, enabling analyses of proprietary news content without transmission to external services while requiring minimal computational resources compared to direct large language model classification.","also_at":[],"analysis":null,"authors":["Elliot Beck","Franziska Eckert","Linus Kühne","Helge Liebert","Rina Rosenblatt-Wisch"],"date":"2026-02-18","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"50d9cb52b4b12603","issue_date":null,"kind":"working_paper","publication_month":"2026-02","relevance":7,"screen_reason":"Presents news-based economic outlook indicator that improves GDP forecasts, useful for market timing.","screening_tag":"Transversal","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"Transversal","tag_inferred":false,"title":"Measuring economic outlook in the news","url":"https://ideas.repec.org/p/snb/snbwpa/2026-04.html"},{"abstract":"In a monetary system in which risk-free and risky money coexist, Gresham's law predicts that people will prefer to hoard risk-free money as a store of value and spend risky money as a medium of exchange. Establishing a payment system on the basis of risk-free money, such as a retail CBDC, while maintaining the fractional reserve banking system in place poses numerous challenges. In a laboratory experiment, we demonstrate that when the holding of risk-free money is unrestricted, people hold and pay with it extensively. However, when the ability to hold risk-free money is limited by a ceiling or an unattractive interest rate, people tend to hoard risk-free money and use risky money for payments.","also_at":[],"analysis":null,"authors":["Romain Baeriswyl","Kene Boun My","Camille Cornand"],"date":"2026-01-23","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"2ba662511f7b4135","issue_date":null,"kind":"working_paper","publication_month":"2026-01","relevance":6,"screen_reason":"Experimental evidence on CBDC effects on money demand informs monetary policy design.","screening_tag":"Transversal","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"Transversal","tag_inferred":false,"title":"Central Bank Digital Currency and Gresham's law: An experimental analysis","url":"https://ideas.repec.org/p/snb/snbwpa/2026-03.html"},{"abstract":"Rents are the largest component of the Consumer Price Index (CPI) in many countries, making accurate and timely measurements of rental price developments essential for inflation monitoring and policy decisions. Market (asking) rent indices are often available in near real-time and with high detail, but differ substantially from the rents paid by the overall tenant population, as typically measured in the CPI. This paper proposes a model to bridge the gap between asking and all-tenant rents. First, using rental-unit listings for Switzerland, we construct timely, granular, and high-frequency indices of asking rents. Second, using a probabilistic model that accounts for the duration of tenants' stays, we estimate all-tenant rents based on historical asking rents. Additionally, we incorporate rent changes during ongoing tenancies. For Switzerland, this corresponds to adjustments permitted under Swiss tenancy law in response to changes in the mortgage reference rate and inflation. This allows us to provide weekly, real-time, and highly disaggregated estimates of all-tenant rents, which are highly correlated with the official quarterly survey-based rental index in the Swiss CPI. Our approach provides a tool for timely rental price monitoring and forecasting that can be adapted for use in other countries.","also_at":[],"analysis":null,"authors":["Emanuel Nussli","Rachel Arulraj-Cordonier","Flurina Strasser","Marko Nanut Petrič","Morten Bech","Antonio Pipino"],"date":"2026-01-22","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"db82299f14920e80","issue_date":null,"kind":"working_paper","publication_month":"2026-01","relevance":8,"screen_reason":"Proposes a high-frequency model for all-tenant rents, offering a more timely and accurate tool for monitoring CPI inflation.","screening_tag":"DM","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"DM","tag_inferred":false,"title":"From listings to all-tenant rents: A probabilistic model","url":"https://ideas.repec.org/p/snb/snbwpa/2026-02.html"},{"abstract":"We present novel evidence on the global transmission of monetary policy (MP) surprises via bond funds. Using daily MP surprise measures and a multi-country panel of weekly fund flows, we document that bond fund flows respond systematically to MP surprises. The direction, intensity, and persistence of these responses, however, vary across destination countries, fund investment strategies, and fund domiciles. Furthermore, bond fund flows react not only to domestic MP surprises, but also to foreign MP surprises, indicating cross-border spillovers. We explore two mechanisms driving these responses: the relative importance of MP shocks versus information shocks, and the impact of exchange rate movements on portfolio rebalancing. Our findings highlight the role of nonbank financial intermediaries in global MP transmission.","also_at":[],"analysis":{"correction":null,"current_prompt":false,"evidence":"global transmission of monetary policy (MP) surprises via bond funds","flags":[],"in_issue":false,"rationale":"The paper explicitly analyzes a multi-country panel to study global transmission and cross-border spillovers.","relevance_note":"The findings suggest that nonbank financial intermediaries are key channels for cross-border monetary policy spillovers, which is essential for understanding global capital flow dynamics.","summary":"This paper examines how monetary policy surprises influence global bond fund flows. The authors find that these flows react systematically to both domestic and foreign policy shocks, though the specific responses depend on the destination country, fund strategy, and domicile.","takeaways":["Bond fund flows are sensitive to both domestic and foreign monetary policy surprises.","Responses to policy shocks vary significantly based on fund investment strategies and domiciles.","Nonbank financial intermediaries play a critical role in the global transmission of monetary policy."],"wording_correction":null},"authors":["Sébastien Blanco","Miriam Koomen","Pinar Yesin"],"date":"2026-01-13","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"63a0490ddcc5a6d5","issue_date":null,"kind":"working_paper","publication_month":"2026-01","relevance":9,"screen_reason":"Documents global bond-fund flow reactions to monetary-policy surprises, directly informing market and policy analysis.","screening_tag":"Transversal","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"Transversal","tag_inferred":false,"title":"Heterogeneous effects of monetary policy surprises on bond fund flows","url":"https://ideas.repec.org/p/snb/snbwpa/2026-01.html"},{"abstract":"We examine the demand for retail treasury bonds and time deposits in Poland, a typical small open economy with an independent monetary policy. To this end we first employ instrumental variable, OLS and two GMM regressions based on asset demand functions derived from the microfounded household utility maximization model. We find that bonds and deposits are imperfect substitutes with the elasticity of substitution somewhat higher than the US counterpart. Next, we construct an asset aggregate consisting of bonds and deposits and find that it depends negatively on interest rate in Poland consistent with theoretical predictions with the price elasticity being close to the one estimated for the United States. Our findings suggest an effective monetary policy transmission to household assets as well as a need for active bond issuance policy of the government in countries like Poland.","also_at":[],"analysis":null,"authors":["Michał Łesyk","Grzegorz Wesołowski"],"date":"2025-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"fee0b3f7e21c7d3b","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Analyzes household demand for bonds in Poland, informing bond market transmission in a small open economy.","screening_tag":"EM","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"EM","tag_inferred":false,"title":"Household demand for treasury bonds and time deposits in a small open economy","url":"https://ideas.repec.org/p/nbp/nbpmis/378.html"},{"abstract":"This study evaluates the credit risk of sustainable loans in a preferential capital requirement programme. We utilise loanlevel data from a uniquely implemented programme from Hungary, applying logistic regressions and survival analysis techniques. We observe a significantly reduced credit risk for firms with renewable energy and electromobility loans, even after accounting for all relevant covariates. Models incorporating green characteristics predict a substantially lower credit risk for firms with green loans compared to models excluding green characteristics. These results are economically significant and robust to model specifications, alternative definitions of green firms and varying default definitions. We show that green loans' lower probability of default can justify a reduction of several percentage points in capital requirements.","also_at":[],"analysis":null,"authors":["Balint Vargedo","Csaba Burger","Donat Kim"],"date":"2025-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"f62c85c68ff21b45","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Finds lower credit risk for green loans in Hungary, informing emerging-market sustainable finance and capital requirements.","screening_tag":"EM","selected_in":[],"source":"mnb","source_name":"Magyar Nemzeti Bank","tag":"EM","tag_inferred":false,"title":"Green Firms Are Less Risky: Results from a Preferential Capital Requirement Programme in Emerging Europe","url":"https://ideas.repec.org/p/mnb/wpaper/2025-2.html"},{"abstract":"The paper evaluates the impact of the European Commission's Seventh Framework Programme (FP7) grants on profit-oriented firms' post-treatment performance. Using a quasi-experimental design and a dataset covering applicants from 46 countries, we find that FP7 grants increase firms' sales and labour productivity by about 18%. However, there is no significant impact on employment levels, pointing to potential growth barriers that prevent firms from scaling production despite improved productivity. The effectiveness of these grants varies significantly based on factors such as financial constraints, project risk profiles, market structure, and the innovation environment. Smaller, less productive firms with tighter financial constraints in technologyintensive sectors operating in concentrated markets and favourable innovation environments, particularly those undertaking longer and riskier projects, tend to benefit more.","also_at":[],"analysis":null,"authors":["Gabor Katay","Palma Filep-Mosberger","Francesco Tucci"],"date":"2025-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"e12c66d46caa6161","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Evaluates EU research grants on firm performance, relevant for innovation policy but indirect market effects.","screening_tag":"DM","selected_in":[],"source":"mnb","source_name":"Magyar Nemzeti Bank","tag":"DM","tag_inferred":true,"title":"The Impact of EU Grants for Research and Innovation on Firms' Performance","url":"https://ideas.repec.org/p/mnb/wpaper/2025-1.html"},{"abstract":"We examine peer effects in mortgage borrowing decisions. We find that having financially literate colleagues improves the borrowing decisions of financially less literate co-workers. Interest rates on the mortgage loans of these co-workers are significantly lower than for similar employees, whose peers have lower financial literacy. The magnitude of the effect is economically significant, amounting to roughly 4 to 5 monthly instalments until maturity. The results are heterogeneous: advice is more valuable for borrowers with low mathematical skills, and the peer effect is considerably higher in districts, where competition is weaker among banks. We also find that introducing a standardised loan product can offset the impact of the peer effect by making the decision problem of borrowers less complex.","also_at":[],"analysis":null,"authors":["Ákos Aczél","Lajos Tamás Szabó"],"date":"2025-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"c7201de0c5d753d6","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":4,"screen_reason":"Finds peer financial literacy affects mortgage rates, modest implications for banking competition.","screening_tag":"DM","selected_in":[],"source":"mnb","source_name":"Magyar Nemzeti Bank","tag":"DM","tag_inferred":true,"title":"Birds of a Feather Indebted Together - Solutions to the Information Problem in the Case of Mortgage Loans","url":"https://ideas.repec.org/p/mnb/wpaper/2025-3.html"},{"abstract":"We investigate whether the transmission of monetary shocks in Poland depends on the level of economic slack. To this end, we estimate smooth transition panel local projections using Poland’s regional data and analyze how monetary shocks affect unemployment and prices in regimes of high and low unemployment. Our key finding aligns with economic intuition: the response of unemployment to monetary policy shocks is stronger when economic slack is high, compared to when it is low. Conversely, the adjustment of prices to monetary innovations is more pronounced when idle resources in the economy are scarce, compared to when they are abundant. Our main conclusion is further supported by evidence showing that the difference in the strength of the employment response to monetary shocks, depending on the unemployment level, is more pronounced in sectors producing non-tradable goods than in those manufacturing tradable goods. Moreover, comparing our model with its linear counterpart confirms that monetary transmission in Poland indeed exhibits state-dependence, while the analysis of monetary shock distributions under low and high unemployment shows that our results are not driven by the presence of a regime-dependent pattern in monetary disturbances.","also_at":[],"analysis":null,"authors":["Paweł Kopiec","Małgorzata Walerych"],"date":"2025-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"952568ca1dc13038","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Shows state-dependent monetary transmission in Poland, informing policy and market expectations.","screening_tag":"EM","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"EM","tag_inferred":false,"title":"Unemployment level and the non-linear effects of monetary policy in Poland","url":"https://ideas.repec.org/p/nbp/nbpmis/377.html"},{"abstract":"Following the Russian military invasion of Ukraine on February 24, 2022, a large wave of Ukrainian refugees arrived in Poland. By 2024, about 1 million Ukrainian refugees have settled in Poland, on top of about 1.5 million Ukrainians who had immigrated between 2014 and 2022, and about 0.9 million immigrants coming from other countries. In this paper we estimate the contribution of Ukrainian refugees, as well as economic migrants from Ukraine and immigrants from other source countries, to labour supply and economic growth in Poland. Using a unique survey dataset compiled at NBP, we are able to carefully account for the different socio-economic and demographic characteristics of these three distinct groups. We find that in 2021-23, immigrants contributed on average about 0.5 pp. to annual GDP growth per annum (18% of all growth), and 0.5 pp. (13% of all growth) in the preceding period 2013-21. While a significant group of pre-war Ukrainian immigrants left Poland after the Russian military invasion of their country, the contribution of labour of Ukrainian refugees alone amounted to 0.8 pp. per annum in 2021-23 (29% of all GDP growth). These contributions helped sustain economic growth in Poland despite the gradual decline in the dynamics of total factor productivity.","also_at":[],"analysis":null,"authors":["Paweł Strzelecki","Jakub Growiec","Robert Wyszyński"],"date":"2025-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"8d548c7b6ea90abb","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Quantifies Ukrainian refugee contributions to Polish growth, informing labor-market and growth outlooks for an emerging-market economy.","screening_tag":"EM","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"EM","tag_inferred":false,"title":"How Much Are Ukrainian Refugees Contributing to the Polish Economy?","url":"https://ideas.repec.org/p/nbp/nbpmis/376.html"},{"abstract":"We show that weak judicial enforcement and credit frictions jointly govern the transmission of corporate distress through trade-credit networks. Weak judicial enforcement increases the losses associated with defaulted trade credit, while credit frictions limit trade creditors' ability to absorb those losses. We exploit variation in court congestion generated by a nationwide reform that reassigned pending bankruptcy cases across courts. Trade creditors are more likely to go bankrupt when their trade debtor's case is handled by a congested court and when they face binding credit frictions. Bank relationships mitigate these frictions and insulate trade creditors from distress transmission. A counterfactual exercise shows that moving from the least tothe most efficient courts would reduce bankruptcy propagation by 40% and increase aggregate sales by 2%.","also_at":[],"analysis":null,"authors":["Gil Nogueira","Geraldo Cerqueiro"],"date":"2025-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"7c97caf5afb06255","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Links judicial enforcement and credit frictions to bankruptcy propagation, with clear implications for corporate credit markets.","screening_tag":"DM","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"DM","tag_inferred":true,"title":"Judicial Enforcement, Credit Frictions, and the Transmission of Bankruptcy through Firm Networks","url":"https://ideas.repec.org/p/ptu/wpaper/w202529.html"},{"abstract":"This paper examines the non-linear impact of unemployment levels on the effectiveness of monetary policy. Using a standard heterogeneous-agent model with uninsured income risk, integrated with a canonical frictional labor market framework, I compare two versions of the model calibrated to reflect high- and low-unemployment regimes in the Polish economy. The findings reveal that the output response to a policy rate change is 60% larger in the high-unemployment scenario than in the low-unemployment one, while price reactions are more pronounced when unemployment is low. Additionally, I investigate the role of incomplete insurance markets in the transmission of monetary policy and assess the welfare implications of policy changes, both at the aggregate level and across different household subgroups.","also_at":[],"analysis":null,"authors":["Paweł Kopiec"],"date":"2025-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":["tag corrected from DM: tagged DM but the text names only emerging or developing economies (Poland)"],"group":"european-central-bank","id":"76fb1daa3ed2b2a0","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Examines how labour slack alters monetary-policy effectiveness in Poland, with implications for policy design.","screening_tag":"EM","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"EM","tag_inferred":false,"title":"Labor market slack, household inequality and monetary policy","url":"https://ideas.repec.org/p/nbp/nbpmis/375.html"},{"abstract":"Natural disasters dramatically affect firms, but they also provide an opportunity to start anew. We exploit the 15-16 October 2017 Portuguese wildfires and the ensuing official assistance that subsidized 85% of the losses and entailed bank screening, applying a differences-in-differences approach. Firms that received government assistance subsequent to the wildfires increase output, the book value of fixed assets, employment, productivity, borrow long-term credit, and hoard cash. Overall, the evidence supports the “build back better” effect, the “broken window” fallacy at the one-year horizon, and a Keynesian multiplier effect in a two- to three-year window.","also_at":[],"analysis":null,"authors":["Sujiao Zhao","José Jorge"],"date":"2025-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":["tag corrected from EM: tagged EM but the text names only advanced economies (Portugal)"],"group":"european-central-bank","id":"72fbd2ebe27a45aa","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":4,"screen_reason":"Analyzes disaster aid effects on Portuguese firms; limited macro impact but relevant for emerging-market policy debates.","screening_tag":"DM","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"DM","tag_inferred":false,"title":"Government Assistance, Bank Screening, and Firm Investment: Evidence from a Natural Disaster","url":"https://ideas.repec.org/p/ptu/wpaper/w202530.html"},{"abstract":"We extend the two-level factor model to account for cointegration between groupspecific factors in large datasets. We propose two nonlinear specifications: (i) a threshold vector error correction model (VECM) that accounts for asymmetric responses across regimes; and (ii) a band VECM that captures discontinuous state-dependent adjustment which activates only when deviations from equilibrium exceed a certain threshold. We examine the small-sample performance of both models through Monte Carlo simulations. In an empirical application, we estimate a band factor VECM on a panel of government bond yields from multiple countries, estimating one global factor and two group-specific factors associated with long- and short-term maturities. The results provide evidence of a discontinuous adjustment in the global term structure of interest rates.","also_at":[],"analysis":null,"authors":["Paulo M.M. Rodrigues","Daniel Abreu"],"date":"2025-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"31c322ebb0952af7","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Introduces large-dimensional cointegrated factor models for global bond yields, useful for interest-rate risk modeling.","screening_tag":"Transversal","selected_in":[],"source":"bdp","source_name":"Banco de Portugal","tag":"Transversal","tag_inferred":false,"title":"Large-dimensional cointegrated threshold factor models: The Global Term Structure of Interest Rates","url":"https://ideas.repec.org/p/ptu/wpaper/w202528.html"},{"abstract":"In this paper we examine the role of the electromobility transformation for exports of the automotive sector. To do so, we propose a novel mapping of granular codes of automotive products into three categories: (i) combustion-specific, (ii) neutral, and (iii) electric-specific. We estimate a standard gravity model of the trade flows of automotive products, comparing the three categories with each other. We demonstrate that key drivers of export of the electric-specific products are similar to the combustion-specific ones. However, exports related to electric vehicles are more technologically intensive and supported by either a domestic R&D potential or international knowledge spillovers through FDI. In particular, export-oriented production of electric-specific intermediates proves to be to a large extent R&D intensive. Our results also suggest that the ongoing structural change in the automotive industry leads rather to intra-industry reorganization than to more fundamental restructuring of existing Global Value Chains.","also_at":[],"analysis":null,"authors":["Jan Baran","Patryk Czechowski","Jakub Mućk"],"date":"2025-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"311ce9452b3f4b47","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":5,"screen_reason":"Analyzes trade shifts in automotive electrification, relevant to sectoral export trends.","screening_tag":"Transversal","selected_in":[],"source":"nbp","source_name":"Narodowy Bank Polski","tag":"Transversal","tag_inferred":false,"title":"The gravity of electromobility. An early investigation of structural change in automotive industry","url":"https://ideas.repec.org/p/nbp/nbpmis/379.html"},{"abstract":"In this paper, we analyze the effects of the introduction of the liquidity coverage ratio (LCR) on banks' funding behavior. We use changes in regulatory liquidity requirements in Switzerland as a natural experiment. Using data for the period before and after the LCR was applied for all banks in Switzerland, our dataset allows us to analyze how the introduction of the LCR affects the banks' funding structure. Our results show that the LCR had its intended effects as banks reduced their exposure to short-term funding. At the same time, we find evidence for optimization of the LCR by banks. Banks optimize their LCR by extending the maturities of liabilities slightly over 30 days, which leads to an improvement in the LCR by 10 percentage points on average. Our results imply that it makes sense to complement the 30-day LCR with longer-term liquidity requirements to reduce cliff risks.","also_at":[],"analysis":null,"authors":["Marc Blatter","Joséphine Molleyres"],"date":"2025-12-18","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"99e4764410980fac","issue_date":null,"kind":"working_paper","publication_month":"2025-12","relevance":7,"screen_reason":"Empirical evidence on LCR effects in Switzerland shows banks’ funding adjustments, informing liquidity regulation.","screening_tag":"DM","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"DM","tag_inferred":false,"title":"LCR optimization by banks: Evidence from changes in liquidity requirements in Switzerland","url":"https://ideas.repec.org/p/snb/snbwpa/2025-18.html"},{"abstract":"This paper investigates the interaction between the rise of inelastic intermediaries, e.g. mutual funds and exchange traded funds (ETFs), and exchange rate dynamics. By leveraging regulatory microdata on the universe of mutual funds domiciled in Switzerland, we first document the remarkable rise of the market share of this industry. Mutual funds went from holding 5% of domestic currency fixed income instruments in 2005 to 51% in 2024. We show that these intermediaries have strict mandates and trade only when faced with in(out)-flows. This makes the market more price-inelastic on aggregate in response to asset demand shocks. We develop an analytical model that we bring to the microdata. We find that (i) an inflow into domestic mutual funds with a large portfolio weight on the domestic currency appreciates it and (ii) the reduced aggregate elasticity makes the exchange rate more sensitive to capital flows. Finally, using a weekly panel of five advanced economies, we document the external validity of this mechanism. We show that the currencies whose markets see a higher prevalence of inelastic intermediaries react significantly more strongly to capital inflows.","also_at":[],"analysis":null,"authors":["Johannes Eugster","Giovanni Rosso","Pinar Yesin"],"date":"2025-12-17","date_kind":"published","date_precision":"day","date_source":"official page","doi":null,"doi_registered":null,"flags":[],"group":"g10-central-bank","id":"e2ab25341c71132d","issue_date":null,"kind":"working_paper","publication_month":"2025-12","relevance":8,"screen_reason":"Shows how inelastic fund intermediaries amplify exchange-rate responses to capital flows, affecting FX markets.","screening_tag":"DM","selected_in":[],"source":"snb","source_name":"Swiss National Bank Working Papers","tag":"DM","tag_inferred":false,"title":"The rise of inelastic intermediaries and exchange rate dynamics","url":"https://ideas.repec.org/p/snb/snbwpa/2025-17.html"},{"abstract":"This paper estimates the impact of acquisitions on various firm-level performance measures of Hungarian firms. Using difference-in-differences estimation with matching, we show that the performance of the acquirer improves significantly following an acquisition. By controlling for the – typically weaker – efficiency of the target, we also estimate the overall efficiency gain. Our results indicate that acquisitions are powerful tools to improve efficiency in the Hungarian economy. The estimated impacts are heterogeneous. Efficiency gains are higher if the acquirer is smaller and less efficient prior to the acquisition, highlighting that improving scale efficiency is an important motive for acquisitions. Furthermore, if the acquirer and target companies had business links beforehand, the productivity gain is twice as large. Acquisitions made during recessions are also different in some ways. Firms make fewer acquisitions, although the number of potential target companies increases. Because acquirers become more selective, the efficiency gains remain sizeable even in the unfavourable business environment.","also_at":[],"analysis":null,"authors":["Marianna Endresz","Peter Gabriel"],"date":"2024-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"e42de3be432a1813","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":4,"screen_reason":"The paper analyzes firm-level acquisition performance in Hungary, offering narrow insights into corporate efficiency gains in an emerging market context.","screening_tag":"EM","selected_in":[],"source":"mnb","source_name":"Magyar Nemzeti Bank","tag":"EM","tag_inferred":false,"title":"Impact of Acquisitions on Firms’ Performance","url":"https://ideas.repec.org/p/mnb/wpaper/2024-3.html"},{"abstract":"Local currency borrowers are statistically significantly affected by exchange rate fluctuations due to the bank lending channel. Using microdata on borrowers from Hungary, this study examines the spillover effects of foreign currency loans on local currency borrowers following an unexpected appreciation of the Swiss franc (CHF) in January 2015. CHF corporate loans are considered unhedged since the majority of the borrowers did not have income in CHF. Our analysis indicates that banks holding a larger portion of unhedged CHF corporate loans reduced their lending in local currency corporate loans after the shock. This relationship is robust across both extensive (loans terminated by a given bank and no new loans at a bank or banks different from the account holder bank or banks) and intensive (no new loans at its current bank or banks) margins. Further investigation into the mechanisms reveals that banks with more unhedged CHF corporate loans experience an increase in non†performing CHF loans post†shock, reducing their capital adequacy. Furthermore, the evidence in our paper suggests that reductions in banks’ local currency lending due to exchange rate shocks adversely affect the investment activity of small firms and increase their likelihood of default.","also_at":[],"analysis":null,"authors":["Palma Filep-Mosberger","Lorant Kaszab","Zhou Ren"],"date":"2024-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"6566609260cc1fb5","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Examines spillovers from unhedged foreign-currency loans in Hungary, highlighting exchange-rate risk for bank lending.","screening_tag":"EM","selected_in":[],"source":"mnb","source_name":"Magyar Nemzeti Bank","tag":"EM","tag_inferred":false,"title":"Spillover Effects of Foreign Currency Loans: the Role of the Bank Lending Channel","url":"https://ideas.repec.org/p/mnb/wpaper/2024-2.html"},{"abstract":"We exploit a nation-wide introduction of mandatory disclosure of borrowers’ total credit exposures and show that sharing such information increases credit access independent of borrowers’ history. Differentiating between borrowers applying to competitor banks and those reapplying to their current banks, as well as between borrowers with and without default history, we find an overall increase in credit access measured by both loan application acceptance and credit amount. While credit access increases, default rates decrease, generating an increase in aggregate welfare. (78 words)","also_at":[],"analysis":null,"authors":["Tamas Briglevics","Artashes Karapetyan","Steven Ongena","Schindele Ibolya"],"date":"2024-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"4ab563427736f1b6","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":7,"screen_reason":"Shows mandatory credit-exposure disclosure boosts household lending and reduces defaults, relevant for banking policy.","screening_tag":"DM","selected_in":[],"source":"mnb","source_name":"Magyar Nemzeti Bank","tag":"DM","tag_inferred":true,"title":"Tamas Briglevics-Artashes Karapetyan-Steven Ongena-Ibolya Schindele: More Data, More Credit? Information Sharing and Bank Credit to Households","url":"https://ideas.repec.org/p/mnb/wpaper/2024-1.html"},{"abstract":"Liquidity and market risk are key considerations in financial markets, especially in times of financial crises. For this reason, regulatory attention to and measures in these fields have been on the rise for the past years. Based on practical experience, regulations aiming at ensuring funding liquidity or, in general, reducing certain risky positions have the side effect of reducing market liquidity. To understand this effect, we extend a standard general equilibrium model with transaction costs of trading, endogenous market liquidity, and the modeling of regulation. We prove that higher regulatory requirements or divesting bad ESG assets reduces market liquidity.","also_at":[],"analysis":null,"authors":["Peter Csoka","Judit Hever"],"date":"2023-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"e861ce88bdecafbf","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Theoretical model links regulation/ESG to reduced market liquidity, pertinent for policy-driven liquidity risk.","screening_tag":"Transversal","selected_in":[],"source":"mnb","source_name":"Magyar Nemzeti Bank","tag":"Transversal","tag_inferred":false,"title":"The Effect of Regulatory Requirements and ESG Promotion on Market Liquidity","url":"https://ideas.repec.org/p/mnb/wpaper/2023-1.html"},{"abstract":"I carry out an empirical analysis to recover stock analysts’ loss functions from observations on forecasts, actual realizations and a proxy for the publicly observed part of the analyst’s information set. The forecasts I use are analyst stock (buy/hold/sell) recommendations for two Blue Chip stocks. I estimate an asymmetry parameter that captures the analyst’s relative cost from overpredicting versus underpredicting the stock performance. I find that the results are sensitive to the categorization of ‘hold’ recommendations. When substituting ‘holds’ with the recommendation from the previous period, in most cases the estimated bounds for the asymmetry parameter suggest that analysts are more likely to issue a ‘false buy’ than a ‘false sell’ recommenda- tion. This is in line with the frequent statement from the analyst recommendations literature, that optimism relative to the consensus is rewarded in analyst recommendations. By shedding light on the direction of bias in individual analysts’ stock recommendations, we can better understand the operation of financial markets and we can build more accurate models by controlling for these biases.","also_at":[],"analysis":null,"authors":["Viola Monostoriné Grolmusz"],"date":"2023-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"85d794d2d1af30be","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":5,"screen_reason":"Recovers analysts’ loss functions from recommendations, offering methodological insight with limited immediate market impact.","screening_tag":"Transversal","selected_in":[],"source":"mnb","source_name":"Magyar Nemzeti Bank","tag":"Transversal","tag_inferred":false,"title":"Recovering Stock Analysts’ Loss Functions from Buy/Sell Recommendations","url":"https://ideas.repec.org/p/mnb/wpaper/2023-4.html"},{"abstract":"We study the nexus between endogenous growth and asset prices. We show that endogenous growth models with either horizontal and vertical innovation match financial data well due to countercyclical dividends which are either procyclical or acyclical in US data. Countercyclical dividends redistribute income from consumption towards investment in innovation improving growth prospects which are reflected in asset prices. In the horizontal innovation model of Kung and Schmid (2015) countercyclical dividends are the result of high monopoly markups. When markup is lowered from their benchmark 65 percent to 60 or 55 percent dividends become procyclical, the price-dividend ratio countercyclical, and the mean of the equity risk premia reduces from 290 to 82 or 46 basis points, respectively. When we introduce leisure preferences the wealth effect of technology shocks makes the aggregate dividends countercyclical as long as labour supply is not too elastic even with low values of the monopolist markup.","also_at":[],"analysis":null,"authors":["Palma Filep-Mosberger","Lorant Kaszab","Zhou Ren"],"date":"2023-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"3b0abb1bb2e63649","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":5,"screen_reason":"Links endogenous growth theory to asset prices via dividend dynamics, offering indirect insight for equity markets.","screening_tag":"DM","selected_in":[],"source":"mnb","source_name":"Magyar Nemzeti Bank","tag":"DM","tag_inferred":false,"title":"Endogenous Growth, Countercyclical Dividends, and Asset Prices","url":"https://ideas.repec.org/p/mnb/wpaper/2023-2.html"},{"abstract":"This paper presents a complex, modular, 1:1 scale model of the Hungarian residential housing market. All the 4 million households and their relevant characteristics are represented based on empirical micro-level data coming from the Central Credit Information System, the Pension Payment database and transaction data of property sales collected by the National Tax and Customs Administration and the largest real estate agencies. The model features transactions in the housing and rental markets, a construction sector, buy-to-let investors, housing loans, house price dynamics and a procyclical banking sector regulated by a macroprudential authority. The flats in the model are characterized with detailed attributes regarding their size, state and neighbourhood quality. Households choose the flat with the highest consumer surplus according to standard utility maximization theory. Additionally, we have also implemented demographic trends, including childbearing, marriage and inheritance. This way the model is suitable for analysing various types of macroprudential, fiscal and monetary policies as well as for the assessment of exogenous shock scenarios. Initiating the model simulation from 2018, it managed to reproduce the number of transactions and the observed house price dynamics in most of the regions of Hungary for 2018-2019, while the volume of new housing loans and their distribution regarding income deciles and loan-to-value ratios were also in compliance with the empirical data.","also_at":[],"analysis":null,"authors":["Bence Mero","Andras Borsos","Zsuzsanna Hosszu","Zsolt Olah","Nikolett Vago"],"date":"2022-12-31","date_kind":"published","date_precision":"year","date_source":null,"doi":null,"doi_registered":null,"flags":[],"group":"european-central-bank","id":"82baeafa31da770a","issue_date":null,"kind":"working_paper","publication_month":null,"relevance":6,"screen_reason":"Agent-based Hungarian housing model evaluates macroprudential, fiscal and monetary policies for a specific emerging market.","screening_tag":"EM","selected_in":[],"source":"mnb","source_name":"Magyar Nemzeti Bank","tag":"EM","tag_inferred":false,"title":"A High Resolution Agent-based Model of the Hungarian Housing Market","url":"https://ideas.repec.org/p/mnb/wpaper/2022-7.html"}]