To understand the effects of large-scale asset purchase programs recently implemented by central banks, we study how markets absorb large demand shocks for risk-free debt. Using high-frequency identification, we exploit the structure of the primary market for U.S. Treasuries to isolate demand shocks. These shocks are sizable, leading to large movements in Treasury yields and impacting corporate borrowing rates. Informed by a preferred habitat model of the term structure, we test for “local” demand effects and find evidence consistent with theoretical predictions. Crucially, this local effect is strongest when financial markets are disrupted. Our estimates are consistent with the view that quantitative easing worked mainly via market segmentation, with a potentially limited role for other channels.
{"title":"Unbundling Quantitative Easing: Taking a Cue from Treasury Auctions","authors":"Walker Ray, Michael Droste, Y. Gorodnichenko","doi":"10.1086/729581","DOIUrl":"https://doi.org/10.1086/729581","url":null,"abstract":"To understand the effects of large-scale asset purchase programs recently implemented by central banks, we study how markets absorb large demand shocks for risk-free debt. Using high-frequency identification, we exploit the structure of the primary market for U.S. Treasuries to isolate demand shocks. These shocks are sizable, leading to large movements in Treasury yields and impacting corporate borrowing rates. Informed by a preferred habitat model of the term structure, we test for “local” demand effects and find evidence consistent with theoretical predictions. Crucially, this local effect is strongest when financial markets are disrupted. Our estimates are consistent with the view that quantitative easing worked mainly via market segmentation, with a potentially limited role for other channels.","PeriodicalId":16875,"journal":{"name":"Journal of Political Economy","volume":null,"pages":null},"PeriodicalIF":8.2,"publicationDate":"2024-01-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139605156","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"When It Rains It Pours: Cascading Uncertainty Shocks","authors":"Anthony M. Diercks, Alex Hsu, Andrea Tamoni","doi":"10.1086/726705","DOIUrl":"https://doi.org/10.1086/726705","url":null,"abstract":"Journal of Political Economy, Ahead of Print. <br/>","PeriodicalId":16875,"journal":{"name":"Journal of Political Economy","volume":null,"pages":null},"PeriodicalIF":8.2,"publicationDate":"2024-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139518848","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
M. Eichenbaum, Miguel Godinho de Matos, Francisco Lima, Sergio Rebelo, M. Trabandt
The Covid epidemic had a large impact on economic activity. In contrast, the dramatic decline in mortality from infectious diseases over the past 120 years had a small economic impact. We argue that people’s response to successive Covid waves helps reconcile these two findings. Our analysis uses a unique administrative data set with anonymized monthly expenditures at the individual level that covers the first three Covid waves. Consumer expenditures fell by about the same amount in the first and third waves, even though the risk of getting infected was larger in the third wave. We find that people had pessimistic prior beliefs about the case-fatality rates that converged over time to the true case-fatality rates. Using a model where Covid is endemic, we show that the impact of Covid is small when people know the true case-fatality rate but large when people have empirically-plausible pessimistic prior beliefs about the case-fatality rate. These results reconcile the large economic impact of Covid with the small effect of the secular decline in mortality from infectious diseases estimated in the literature. JEL Classification: E1, I1, H0.
{"title":"Expectations, Infections, and Economic Activity","authors":"M. Eichenbaum, Miguel Godinho de Matos, Francisco Lima, Sergio Rebelo, M. Trabandt","doi":"10.1086/729449","DOIUrl":"https://doi.org/10.1086/729449","url":null,"abstract":"The Covid epidemic had a large impact on economic activity. In contrast, the dramatic decline in mortality from infectious diseases over the past 120 years had a small economic impact. We argue that people’s response to successive Covid waves helps reconcile these two findings. Our analysis uses a unique administrative data set with anonymized monthly expenditures at the individual level that covers the first three Covid waves. Consumer expenditures fell by about the same amount in the first and third waves, even though the risk of getting infected was larger in the third wave. We find that people had pessimistic prior beliefs about the case-fatality rates that converged over time to the true case-fatality rates. Using a model where Covid is endemic, we show that the impact of Covid is small when people know the true case-fatality rate but large when people have empirically-plausible pessimistic prior beliefs about the case-fatality rate. These results reconcile the large economic impact of Covid with the small effect of the secular decline in mortality from infectious diseases estimated in the literature. JEL Classification: E1, I1, H0.","PeriodicalId":16875,"journal":{"name":"Journal of Political Economy","volume":null,"pages":null},"PeriodicalIF":8.2,"publicationDate":"2024-01-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139532437","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Morality of Markets","authors":"M. Dewatripont, J. Tirole","doi":"10.1086/729445","DOIUrl":"https://doi.org/10.1086/729445","url":null,"abstract":"","PeriodicalId":16875,"journal":{"name":"Journal of Political Economy","volume":null,"pages":null},"PeriodicalIF":8.2,"publicationDate":"2024-01-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139532399","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Florian Englmaier, Stefan Grimm, Dominik Grothe, David Schindler, S. Schudy
{"title":"The Effect of Incentives in Non-Routine Analytical Team Tasks","authors":"Florian Englmaier, Stefan Grimm, Dominik Grothe, David Schindler, S. Schudy","doi":"10.1086/729443","DOIUrl":"https://doi.org/10.1086/729443","url":null,"abstract":"","PeriodicalId":16875,"journal":{"name":"Journal of Political Economy","volume":null,"pages":null},"PeriodicalIF":8.2,"publicationDate":"2024-01-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139623810","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Life Cycle of Products: Evidence and Implications","authors":"David Argente, Munseob Lee, Sara Moreira","doi":"10.1086/726704","DOIUrl":"https://doi.org/10.1086/726704","url":null,"abstract":"Journal of Political Economy, Ahead of Print. <br/>","PeriodicalId":16875,"journal":{"name":"Journal of Political Economy","volume":null,"pages":null},"PeriodicalIF":8.2,"publicationDate":"2024-01-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139420152","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Journal of Political Economy, Volume 132, Issue 1, January 2024.
政治经济学杂志》，第 132 卷第 1 期，2024 年 1 月。
{"title":"Recent Referees","authors":"","doi":"10.1086/729401","DOIUrl":"https://doi.org/10.1086/729401","url":null,"abstract":"Journal of Political Economy, Volume 132, Issue 1, January 2024. <br/>","PeriodicalId":16875,"journal":{"name":"Journal of Political Economy","volume":null,"pages":null},"PeriodicalIF":8.2,"publicationDate":"2024-01-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139407923","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Journal of Political Economy, Volume 132, Issue 1, January 2024.
政治经济学杂志》，第 132 卷第 1 期，2024 年 1 月。
{"title":"Front Matter","authors":"","doi":"10.1086/729400","DOIUrl":"https://doi.org/10.1086/729400","url":null,"abstract":"Journal of Political Economy, Volume 132, Issue 1, January 2024. <br/>","PeriodicalId":16875,"journal":{"name":"Journal of Political Economy","volume":null,"pages":null},"PeriodicalIF":8.2,"publicationDate":"2024-01-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139407870","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Journal of Political Economy, Volume 132, Issue 1, Page 336-336, January 2024.
政治经济学杂志》，第 132 卷第 1 期，第 336-336 页，2024 年 1 月。
{"title":"JPE Turnaround Times","authors":"","doi":"10.1086/729108","DOIUrl":"https://doi.org/10.1086/729108","url":null,"abstract":"Journal of Political Economy, Volume 132, Issue 1, Page 336-336, January 2024. <br/>","PeriodicalId":16875,"journal":{"name":"Journal of Political Economy","volume":null,"pages":null},"PeriodicalIF":8.2,"publicationDate":"2024-01-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139407903","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Journal of Political Economy, Volume 131, Issue 12, December 2023.
政治经济学杂志》，第 131 卷第 12 期，2023 年 12 月。
{"title":"Front Matter","authors":"","doi":"10.1086/729272","DOIUrl":"https://doi.org/10.1086/729272","url":null,"abstract":"Journal of Political Economy, Volume 131, Issue 12, December 2023. <br/>","PeriodicalId":16875,"journal":{"name":"Journal of Political Economy","volume":null,"pages":null},"PeriodicalIF":8.2,"publicationDate":"2023-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138794280","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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