Suchergebnisse

"I describe two amplifications mechanisms that operate during liquidity crises and discuss the scope for central bank policies during crises as well as preventive policies in advance of crises. The first mechanism works through asset prices and balance sheets. A negative shock to the balance sheets of asset-holders causes them to liquidate assets, lowering prices, further deteriorating balance sheets, culminating in a crisis. The second mechanism involves investors' Knightian uncertainty. Unusual shocks to untested financial innovations lead agents to become uncertain about their investments causing them to disengage from markets and increase their demand for liquidity. This behavior leads to a loss of liquidity and a crisis"--National Bureau of Economic Research web site

AbstractExisting research provides conflicting accounts of whether indirect exposure to the American carceral state mobilizes geographically proximate community voters. One possible reason for these mixed findings may be a missing connection between electoral participation and expectations of change in criminal legal policies. To remedy this problem, I leverage the inclusion of a well‐publicized ballot initiative in California, Proposition 47. The 2014 measure would substantially reduce the incarcerated population in the state and lower sanctions for non‐violent criminal offenses. Using census tract‐level vote returns and incarceration rates, I show that increasing levels of tract incarceration are associated with an increase in turnout during the year of Proposition 47 (3.8 to 6.9 pp) relative to past turnout levels. In addition, I show that higher tract incarceration rates are associated with more support for the Proposition (6.9 pp. difference). These results suggest that carceral state exposure may affect community political engagement differently based on the direct policy relevance of a given election for changing carceral state functioning.

We model the dynamics of risk premia during crises in asset markets where the marginal investor is a financial intermediary. Intermediaries face an equity capital constraint. Risk premia rise when the constraint binds, reflecting the capital scarcity. The calibrated model matches the nonlinearity of risk premia during crises and the speed of reversion in risk premia from a crisis back to precrisis levels. We evaluate the effect of three government policies: reducing intermediaries borrowing costs, injecting equity capital, and purchasing distressed assets. Injecting equity capital is particularly effective because it alleviates the equity capital constraint that drives the model's crisis. (JEL E44, G12, G21, G23, G24)