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Working Paper
Is \"Fintech\" Good for Small Business Borrowers? Impacts on Firm Growth and Customer Satisfaction
?Fintech? is a rapidly expanding segment of the financial market that is receiving much attention from investors and increasing regulatory scrutiny. While the attention is rising, very little is known about the performance of these lending sources on the outcomes of small businesses that make use of them. The Federal Reserve?s 2015 Small Business Credit Survey has data on the experiences of business owners with this new funding source and can provide some useful insights into this expanding sector, if compositional differences among the businesses that get bank loans, those that get fintech ...
Working Paper
The Rise of Fintech Lending to Small Businesses: Businesses’ Perspectives on Borrowing
Online lending through fintech firms is a rapidly expanding segment of the financial market that is receiving much attention from investors and increasing scrutiny from regulators. Research is only beginning to assess how fintech firms’ entry is altering the choices and outcomes of small businesses that borrow from them. The Federal Reserve Small Business Credit Survey is a unique data source on the experiences of business owners with new and more traditional sources of credit. We find that the businesses using online lenders are not representative of small and medium-size enterprise in the ...
Working Paper
A Local Projections Approach to Difference-in-Differences Event Studies
Many of the challenges in the estimation of dynamic heterogeneous treatment effects can be resolved with local projection (LP) estimators of the sort used in applied macroeconometrics. This approach provides a convenient alternative to the more complicated solutions proposed in the recent literature on Difference in-Differences (DiD). The key is to combine LPs with a flexible ‘clean control’ condition to define appropriate sets of treated and control units. Our proposed LP-DiD estimator is clear, simple, easy and fast to compute, and it is transparent and flexible in its handling of ...
Working Paper
The Local Fiscal Multiplier of Intergovernmental Grants: Evidence from Federal Medicaid Assistance to States
Advocates of Medicaid expansion argue that federal Medicaid assistance to states fosters economic activity, generating positive local multiplier effects. Furthermore, during economic downturns, Congress regularly tweaks federal match rates for state Medicaid spending – including during the COVID-19 public health emergency – in order to assist states. Despite heavy reliance on Medicaid funding formulas, identifying the economic effect of these federal transfers has proved challenging. This is because federal Medicaid assistance (to states) is endogenous, since funding levels are correlated ...
Working Paper
Large panel data models with cross-sectional dependence: a survey
This paper provides an overview of the recent literature on estimation and inference in large panel data models with cross-sectional dependence. It reviews panel data models with strictly exogenous regressors as well as dynamic models with weakly exogenous regressors. The paper begins with a review of the concepts of weak and strong cross-sectional dependence, and discusses the exponent of cross-sectional dependence that characterizes the different degrees of cross-sectional dependence. It considers a number of alternative estimators for static and dynamic panel data models, distinguishing ...
Working Paper
Modelling Dependence in High Dimensions with Factor Copulas
his paper presents flexible new models for the dependence structure, or copula, of economic variables based on a latent factor structure. The proposed models are particularly attractive for relatively high dimensional applications, involving fifty or more variables, and can be combined with semiparametric marginal distributions to obtain flexible multivariate distributions. Factor copulas generally lack a closed-form density, but we obtain analytical results for the implied tail dependence using extreme value theory, and we verify that simulation-based estimation using rank statistics is ...
Working Paper
Evidence on the Production of Cognitive Achievement from Moving to Opportunity
This paper performs a subgroup analysis on the effect of receiving a Moving to Opportunity (MTO) housing voucher on test scores. I find evidence of heterogeneity by number of children in the household in Boston, gender in Chicago, and race/ethnicity in Los Angeles. To study the mechanisms driving voucher effect heterogeneity, I develop a generalized Rubin Causal Model and propose an estimator to identify transition-specific Local Average Treatment Effects (LATEs) of school and neighborhood quality. Although I cannot identify such LATEs with the MTO data, the analysis demonstrates that ...
Working Paper
Risk-Shifting, Regulation, and Government Assistance
This paper examines an episode when policy response to a financial crisis effectively incentivized financial institutions to reallocate their portfolios toward safe assets. Following a shift to a regime of enhanced regulation and scaled-down public assistance during the savings and loan crisis in 1989, I find that thrifts with a high probability of failure increased their composition of safe assets relative to thrifts with a low probability of failure. The findings also show a shift to safe assets among stock thrifts relative to mutual thrifts, thereby providing evidence of risk-shifting from ...
Working Paper
When is the Fiscal Multiplier High? A Comparison of Four Business Cycle Phases
We synthesize the recent, at times conflicting, empirical literature regarding whether fiscal policy is more effective during certain points in the business cycle. Evidence of state dependence in the multiplier depends critically on how the business cycle is defined. Estimates of the fiscal multiplier do not change when the unemployment rate is above or below its trend. However, we find that the multiplier is higher when the unemployment rate is increasing relative to when it is decreasing. This result holds using both a long time-series at the U.S. national level and for a panel of U.S. ...
Working Paper
A distinction between causal effects in structural and rubin causal models
Structural Causal Models define causal effects in terms of a single Data Generating Process (DGP), and the Rubin Causal Model defines causal effects in terms of a model that can represent counterfactuals from many DGPs. Under these different definitions, notationally similar causal effects make distinct claims about the results of interventions to the system under investigation: Structural equations imply conditional independencies in the data that potential outcomes do not. One implication is that the DAG of a Rubin Causal Model is different from the DAG of a Structural Causal Model. Another ...