#2009-057A "Is the International Border Effect Larger than the Domestic Border Effect? Evidence from U.S. Trade"
by Cletus C. Coughlin, and Dennis Novy
November 2009

Many studies have found that international borders represent large barriers to trade. But how do international borders compare to domestic border barriers? More...

#2009-056A "Outside Versus Inside Bonds: A Modigliani-Miller type result for liquidity constrained economies"
by Aleksander Berentsen, and Christopher J. Waller
October 2009

When agents are liquidity constrained, two options exist – sell assets or borrow. We compare the allocations arising in two economies: in one, agents can sell government bonds (outside bonds) and in the other they can borrow (issue inside bonds). More...

#2009-055A "Common Fluctuations in OECD Budget Balances"
by Christopher J. Neely, and David E. Rapach
October 2009

We analyze comovements in four measures of budget surpluses for 18 OECD countries for 1980–2008 with a dynamic latent factor model. More...

#2009-054A "Are U.S. Banks too Large?"
by David C. Wheelock, and Paul Wilson
October 2009

The substantial consolidation of the U.S. banking industry since the mid-1980s has brought a large increase in average (and median) bank size, which along with concerns about banks that are “too-big-to-fail,” has led many analysts to wonder whether banks are “too large.” More...

#2009-053A "Biofuel Subsidies: An Open-Economy Analysis"
by Subhayu Bandyopadhyay, Sumon Bhaumik, and Howard J. Wall
October 2009

We present a general equilibrium analysis of biofuel subsidies in an open-economy context. In the small-country case, when a Pigouvian tax on conventional fuels such as crude is in place, the optimal biofuel subsidy is zero. More...

#2009-052A "The Effects of Recessions Across Demographic Groups"
by Kristie M. Engemann, and Howard J. Wall
October 2009

The burdens of a recession are not spread evenly across demographic groups. The public and media, for example, noticed that, from the start of the current recession in December 2007 through June 2009, men accounted for more than three quarters of net job losses. More...

#2009-051A "In-Sample Tests of Predictive Ability: A New Approach"
by Todd E. Clark, and Michael W. McCracken
October 2009

This paper presents analytical, Monte Carlo, and empirical evidence linking in-sample tests of predictive content and out-of-sample forecast accuracy. More...

#2009-050A "Nested Forecast Model Comparisons: A New Approach to Testing Equal Accuracy"
by Todd E. Clark, and Michael W. McCracken
October 2009

This paper develops bootstrap methods for testing whether, in a finite sample, competing out-of-sample forecasts from nested models are equally accurate. More...

#2009-049A "Taylor-Type Rules and Permanent Shifts in Productivity Growth"
by William T. Gavin, Benjamin D. Keen, and Michael R. Pakko
September 2009

This paper examines the impact of a permanent shock to the productivity growth rate in a New Keynesian model when the central bank does not immediately adjust its policy rule to that shock. More...

#2009-048A "The Local Effects of Monetary Policy"
by Neville Francis, Michael T. Owyang, and Tatevik Sekhposyan
September 2009

Previous studies have documented disparities in the regional responses to monetary policy shocks; this variation has been found to depend, in part, on differences in the industrial composition of the regional economies. However, because of computational issues, the literature has often neglected the richest level of disaggregation: the city. More...