New: Portage: Path Dependence and Increasing Returns in U.S. History
The authors examine portage sites in the U.S. South, Mid-Atlantic, and Midwest, including those on the fall line, a geomorphologic feature in the southeastern U.S. marking the final rapids on rivers before the ocean. Historically, waterborne transport of goods required portage around the falls at these points, while some falls provided water power during early industrialization. These factors attracted commerce and manufacturing. Although these original advantages have long since been made obsol
New: Maturity Mismatch and Financial Crises: Evidence from Emerging Market Corporations
Substantial attention has been paid in recent years to the risk of maturity mismatch in emerging markets. Although this risk is micro economic in nature, the evidence advanced thus far has taken the form of macro correlations. We evaluate this mechanism empirically at the micro level by using a database of over 3,000 publicly traded firms from fifteen emerging markets. We measure the risk of maturity mismatch by estimating, at the firm level, the effect on investment of the interaction of short-
New: Mishmash on Mismatch? Balance-Sheet Effects and Emerging-Markets Crises
We critically assess the recent empirical literature on the importance of dollar debt and balance-sheet effects in the emerging-market financial crises of the 1990s. Using a simple model, we discuss which specifications are theoretically appropriate, and provide additional insights as to the proper interpretation of the reduced-form evidence in the literature. We show that the variety of results found in the existing literature are related to the heterogeneity of regression specifications. Using
New: Thick-Market Effects and Churning in the Labor Market: Evidence from U.S. Cities
Using U.S. Census microdata, the authors show that, on average, workers change occupation and industry less in more densely populated areas. The result is robust to standard demographic controls, as well as to including aggregate measures of human capital and sectoral mix. Analysis of the displaced worker surveys shows that this effect is present in cases of involuntary separation as well. On the other hand, the authors actually find the opposite result (higher rates of occupational and industri
REVISION: On the Market Discipline of Informationally‐Opaque Firms: Evidence from Bank Borrowers in the
Using plausibly exogenous variation in demand for federal funds created by daily shocks to reserve balances, we identify the supply curve facing a bank borrower in the inter‐bank market, and study how access to overnight credit is affected by changes in public and private measures of borrower creditworthiness. While there is evidence that lenders respond to adverse changes in public information about credit quality by restricting access to the market in a fashion consistent with market dis
Maturity Mismatch and Financial Crises: Evidence from Emerging Market Corporations
Substantial attention has been paid in recent years to the risk of maturity mismatch in emerging markets. Although this risk is microeconomic in nature, the evidence advanced thus far has taken the form of macro correlations. We evaluate this mechanism empirically at the micro level by using a database of over 3000 publicly traded firms from fifteen emerging markets. We measure the risk of short-term exposure by estimating, at the firm level, the effect on investment of the interaction of sho
Corporate Dollar Debt and Depreciations: Much Ado About Nothing?
Much has been written recently about the problems for emerging markets that might result from a mismatch between foreign-currency denominated liabilities and assets (or income flows) denominated in local currency. In particular, several models, developed in the aftermath of financial crises of the late 1990s, suggest that the expansion in the "peso" value of "dollar" liabilities resulting from a devaluation could, via a net-worth effect, offset the expansionary competitiveness effect. Assessing
Computationally Efficient Solution and Maximum Likelihood Estimation of Nonlinear Rational Expectati...
This paper presents new, computationally efficient algorithms for solution and estimation of nonlinear dynamic rational expectations models. The innovations in the algorithms are as follows: (1) The entire solution path is obtained simultaneously by taking a small number of Newton steps, using analytic derivatives, over the entire path; (2) The terminal conditions for the solution path are derived from the uniqueness and stability conditions from the linearization of the model around the terminu