Staff working papers provide a forum for staff to publish work-in-progress research intended for journal publication.
1295
result(s)
Supply Drivers of US Inflation Since the COVID-19 Pandemic
Staff Working Paper 2023-19
Serdar Kabaca,
Kerem Tuzcuoglu
This paper examines the contribution of several supply factors to US headline inflation since the start of the COVID-19 pandemic. We identify six supply shocks using a structural VAR model: labor supply, labor productivity, global supply chain, oil price, price mark-up and wage mark-up shocks.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Econometric and statistical methods,
Inflation and prices
JEL Code(s):
C,
C3,
C32,
E,
E3,
E31,
E32
Central Bank Forecasting: A Survey
Staff Working Paper 2023-18
Carola Conces Binder,
Rodrigo Sekkel
We review the literature on central bank forecasting with a special focus on the Federal Reserve, European Central Bank, Bank of England and Bank of Canada.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Monetary policy
JEL Code(s):
E,
E4,
E47,
E5,
E52,
E58
Persistent Debt and Business Cycles in an Economy with Production Heterogeneity
Staff Working Paper 2023-17
Aubhik Khan,
Soyoung Lee
We examine the role of debt in amplifying and propagating recessions. Firms’ debt adjustment makes recessions deeper but makes expansions gradual. In particular, when the aggregate business leverage is ten percentage points above average, the half-life of the recovery doubles.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Firm dynamics,
Productivity
JEL Code(s):
E,
E2,
E23,
E3,
E30,
E32
Cost Pass-Through with Capacity Constraints and International Linkages
Staff Working Paper 2023-16
Reinhard Ellwanger,
Hinnerk Gnutzmann,
Piotr Śpiewanowski
How are regional cost shocks passed through into global prices? We investigate the role of short-run capacity constraints and show that they can induce stark non-linearities in the pass-through. We highlight this effect for the market for ammonia, a commodity produced largely from natural gas.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Climate change,
Econometric and statistical methods,
Inflation and prices,
International topics
JEL Code(s):
L,
L1,
L13,
L6,
L65,
Q,
Q4,
Q40,
Q5,
Q54
We Didn’t Start the Fire: Effects of a Natural Disaster on Consumers’ Financial Distress
Staff Working Paper 2023-15
Anson T. Y. Ho,
Kim Huynh,
David T. Jacho-Chávez,
Geneviève Vallée
We use detailed consumer credit data to investigate the impact of the 2016 Fort McMurray wildfire, the costliest wildfire disaster in Canadian history, on consumers’ financial stress. We focus on the arrears of insured mortgages because of their important implications for financial institutions and insurers’ business risk and relevant management practices.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Climate change,
Credit and credit aggregates,
Econometric and statistical methods,
Financial stability
JEL Code(s):
C,
C2,
C21,
D,
D1,
D12,
G,
G2,
G21,
Q,
Q5,
Q54
On the Fragility of DeFi Lending
Staff Working Paper 2023-14
Jonathan Chiu,
Emre Ozdenoren,
Kathy Yuan,
Shengxing Zhang
We develop a dynamic model to capture key features of decentralized finance lending. We identify a price-liquidity feedback: the market outcome in any given period depends on agents' expectations about lending activities in future periods, with higher future price expectations leading to more lending and higher prices in that period.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Digital currencies and fintech,
Financial stability
JEL Code(s):
G,
G0,
G01,
G1,
G10
Learning in a Complex World: Insights from an OLG Lab Experiment
Staff Working Paper 2023-13
Cars Hommes,
Stefanie J. Huber,
Daria Minina,
Isabelle Salle
This paper brings novel insights into group coordination and price dynamics in complex environments. We implement a chaotic overlapping-generation model in the lab and find that group coordination is always on the steady state or on the two-cycle and that behavior is non-monotonic.
The Role of Intermediaries in Selection Markets: Evidence from Mortgage Lending
Staff Working Paper 2023-12
Jason Allen,
Robert Clark,
Jean-François Houde,
Shaoteng Li,
Anna Trubnikova
This paper looks at the role mortgage brokers play in helping borrowers generate quotes and qualify for credit. We find that, on average, borrowers that engage with a mortgage broker pay lower interest rates. However, in about 15% of cases, borrowers are steered towards longer amortizing mortgages than they would have chosen absent a broker. Since mortgages with longer amortization have higher total interest costs over the entire life of the mortgage, this steering is expensive.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial institutions,
Financial services,
Market structure and pricing
JEL Code(s):
D,
D4,
G,
G2,
G21,
L,
L2
Inflation, Output, and Welfare in the Laboratory
Staff Working Paper 2023-11
Janet Hua Jiang,
Daniela Puzzello,
Cathy Zhang
We investigate the effect of inflation on output and welfare in the laboratory. Consistent with monetary theory, we find that inflation acts as a tax on monetary exchange and reduces output and welfare.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices,
Inflation: costs and benefits,
Monetary policy
JEL Code(s):
C,
C9,
C92,
D,
D8,
D83,
E,
E4,
E40