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Insights / Research BriefJul 26, 2023

Exporting, Global Sourcing, and Multinational Activity: Theory and Evidence from the United States

Pol Antràs, Teresa C. Fort, Evgenii Fadeev, Felix Tintelnot
Multinational firms (MNEs) are more likely to trade not only with countries in which they have affiliates, but also with other countries within their affiliates’ region. These patterns point to firm-level scale economies that arise when the fixed costs to source from, or sell in, a market are shared across all the MNE’s plants.
Topics:  Financial Markets
Insights / Research BriefJul 20, 2023

Price Level and Inflation Dynamics in Heterogeneous Agent Economies

Greg Kaplan, Georgios Nikolakoudis, Giovanni L. Violante
This work offers new insights into the effects of persistent fiscal deficits on US inflation, revealing that targeted income redistribution during COVID increased short-term inflation significantly. The largest sustainable primary deficit is 4.6% of GDP, or 40% higher than current levels, dependent on how deficit spending is distributed.
Topics:  Financial Markets, Monetary Policy
Insights / Research BriefJul 06, 2023

Carbon Prices and Forest preservation Over Space and Time in the Brazilian Amazon

Juliano J. Assunção, Lars Peter Hansen, Todd Munson, José A. Scheinkman
With modest transfers per ton of net CO2, Brazil would find it optimal to choose policies that produce substantial capture of greenhouse gasses in the next 30 years, suggesting that the management of tropical forests could play an important role on climate change mitigation in the near future.
Topics:  Energy & Environment, Financial Markets
Insights / Research BriefJun 30, 2023

Monetary Policy Transmission Through Online Banks

Samuel Earnest, Isil Erel, Jack Liebersohn, Constantine Yannelis
Monetary transmission is significantly larger for online banks; compared to brick-and-mortar banks, a 100-basis point increase in the federal funds rate leads to an approximately-30-basis-point larger increase in deposit rates offered by online banks.
Topics:  Financial Markets, Monetary Policy
Insights / Research BriefJun 22, 2023

Finance and Climate Resilience: Evidence From the Long 1950s US Drought

Raghuram G. Rajan, Rodney Ramcharan
Areas affected by the 1950s drought where access to credit was constrained experienced sharp declines in bank lending, net emigration, and population declines. In contrast, agricultural investment and long-run productivity increased in drought-exposed areas with access to credit, even allowing some of these areas to surpass similar areas that were unaffected by the drought.
Topics:  Energy & Environment, Financial Markets
Insights / Research BriefJun 20, 2023

Profitability Context and the Cross-Section of Stock Returns

Alex G. Kim, Valeri V. Nikolaev
This novel study documents the importance of contextual information for asset pricing, revealing context-adjusted profitability’s superior ability to explain expected returns, both statistically and economically, compared to conventional operating profitability.
Topics:  Financial Markets
Insights / Research BriefJun 20, 2023

When Cryptomining Comes to Town: High Electricity-Use Spillovers to the Local Economy

Matteo Benetton, Giovanni Compiani, Adair Morse
Households and small businesses paid an extra $204 million and $92 million annually, respectively, in Upstate New York because of increased electricity consumption from cryptominers; while in China, where electricity prices are fixed, rationing of electricity in cities with cryptomining deteriorates wages and investments.
Topics:  Energy & Environment, Financial Markets
Insights / Research BriefJun 14, 2023

Do You Even Crypto, Bro? Cryptocurrencies in Household Finance

Bernardo Candia, Olivier Coibion, Yuriy Gorodnichenko, Michael Weber
Cryptocurrency holders are younger, male, less likely to be white, and more libertarian relative to non-crypto holders. They also expect much higher rates of returns for crypto and perceive it as relatively safer than do other households. Information about historical returns for cryptocurrencies leads individuals to increase their desired share of crypto holdings and makes them more likely to purchase cryptocurrency.
Topics:  Financial Markets