Federal Reserve System

About: Federal Reserve System is a other organization based out in Washington D.C., District of Columbia, United States. It is known for research contribution in the topics: Monetary policy & Inflation. The organization has 2373 authors who have published 10301 publications receiving 511979 citations.

Classroom Peer Effects and Student Achievement

Abstract: We analyze the impact of classroom peers’ ability (measured by their individual fixed effects) on student achievement for all Florida public school students in grades 3–10 over a 6-year period. We control for both student and teacher fixed effects, thereby alleviating biases due to endogenous assignment of both peers and teachers. Under linear-in-means specifications, estimated peer effects are small to nonexistent, but we find some sizable and significant peer effects within nonlinear models. We also find that classroom peers, as compared with the broader group of grade-level peers at the same school, exert a greater influence on individual achievement gains.

The efficiency effects of bank mergers: An overview of case studies of nine mergers

Abstract: This paper summarizes nine case studies, by nine authors, on the efficiency effects of bank mergers. The mergers selected for study were ones that seemed relatively likely to yield efficiency gains. That is, they involved relatively large banks generally with substantial market overlap, and most occurred during the early 1990s when efficiency was getting a lot of attention in banking. All nine of the mergers resulted in significant cost cutting in line with premerger projections. Four of the nine mergers were clearly successful in improving cost efficiency but five were not. It is not possible to isolate specific factors from these mergers that are most likely to yield efficiency gains, but the most frequent and serious problem was unexpected difficulty in integrating data processing systems and operations.

External Constraints on Monetary Policy and the Financial Accelerator

Abstract: We develop a small open economy macroeconomic model where financial conditions influence aggregate behavior. We use this model to explore the connection between the exchange rate regime andfinancial distress. We show that fixed exchange rates exacerbate financial crises by tieing the hands of the monetary authorities. We then investigate the quantitative significance by first calibrating the model to Korean data and then showing that it does a reasonably good job of matching the Korean experience during its recent financial crisis. In particular, the model accounts well for the sharp increase in lending rates and the large drop in output, investment and productivity during the 1997-1998 episode. We then perform some counterfactual exercises to illustrate the quantitative significance of fixed versus floating rates both for macroeconomic performance and for welfare. Overall, these exercises imply that welfare losses following a financial crisis are significantly larger under fixed exchange rates relative to flexible exchange rates.

Macroeconomic Dynamics and Credit Risk: A Global Perspective

Abstract: This paper presents a new approach to modeling conditional credit loss distributions. Asset value changes of firms in a credit portfolio are linked to a dynamic global macroeconometric model, allowing macroeffects to be isolated from idiosyncratic shocks from the perspective of default (and hence loss). Default probabilities are driven primarily by how firms are tied to business cycles, both domestic and foreign, and how business cycles are linked across countries. We allow for firm-specific business cycle effects and the heterogeneity of firm default thresholds using credit ratings. The model can be used, for example, to compute the effects of a hypothetical negative equity price shock in South East Asia on the loss distribution of a credit portfolio with global exposures over one or more quarters. We show that the effects of such shocks on losses are asymmetric and nonproportional, reflecting the highly nonlinear nature of the credit risk model.