5 Works

International Borrowing, Specialization and Unemployment in a Small, Open Economy

Patrick N. Osakwe & Shouyong Shi
Empirical evidence suggests that the unemployment rate and the export/GNP ratio are positively correlated with external debt across developing countries. This paper develops a dynamic model that provides an explanation for the aforementioned relationships. The central idea of our paper is that international borrowing affects unemployment and specialization patterns by unevenly changing the risk-sharing structure—across sectors—between firms and workers. The economy produces a domestic good and an export good and faces uncertainty in its terms...

Adoption Costs of Financial Innovation: Evidence from Italian ATM Cards

Kim Huynh, Philipp Schmidt-Dengler, Gregor W. Smith & Angelika Welte
The discrete choice to adopt a financial innovation affects a household’s exposure to inflation and transactions costs. We model this adoption decision as being subject to an unobserved cost. Estimating the cost requires a dynamic structural model, to which we apply a conditional choice simulation estimator. A novel feature of our method is that preference parameters are estimated separately, from the Euler equations of a shopping-time model, to aid statistical efficiency. We apply this method...

Trading Dynamics with Adverse Selection and Search: Market Freeze, Intervention and Recovery

Jonathan Chiu & Thorsten V. Koeppl
We study the trading dynamics in an asset market where the quality of assets is private information of the owner and finding a counterparty takes time. When trading of a financial asset ceases in equilibrium as a response to an adverse shock to asset quality, a large player can resurrect the market by buying up lemons which involves assuming financial losses. The equilibrium response to such a policy is intricate as it creates an announcement...

Empirical Likelihood Block Bootstrapping

Jason Allen, Allan W. Gregory & Katsumi Shimotsu
Monte Carlo evidence has made it clear that asymptotic tests based on generalized method of moments (GMM) estimation have disappointing size. The problem is exacerbated when the moment conditions are serially correlated. Several block bootstrap techniques have been proposed to correct the problem, including Hall and Horowitz (1996) and Inoue and Shintani (2006). We propose an empirical likelihood block bootstrap procedure to improve inference where models are characterized by nonlinear moment conditions that are serially...

Debt-Relief Programs and Money Left on the Table: Evidence from Canada's Response to COVID-19

Jason Allen, Robert Clark, Shaoteng Li & Nicolas Vincent
During the COVID-19 pandemic, Canadian financial institutions offered debt-relief programs to help borrowers cope with job losses and economic insecurity. We consider the low take-up rates for these programs and suggest that to be effective, such programs must be visible and easy to use.

Registration Year

  • 2021

Resource Types

  • Text


  • Queen's University
  • Bank of Canada
  • University of Vienna
  • HEC Montréal