Sandra E. Black is an economist in the Research and Market Analysis Group, Federal Reserve Bank of New York. The opinions expressed here are the author’s and do not necessarily reflect opinions of the Federal Reserve Bank of New York or the Federal Reserve System. How competition affects the ability of companies to favor particular groups is a longstanding issue in the economics literature. In ...

A quantitative framework is developed to bring forward the insurance motive for holding international reserves. The insurance value of reserves is quantified as the market price of an equivalent option that provides the same insurance coverage as the reserves. This quantitative framework is applied to calculating the cost of a regional insurance arrangement (e.g. an Asian Monetary Fund) and to ...

Reserve requirements have been part of the regulator)' apparatus of banking in the United States for more than a century and a half. No matter what their original purpose may have been, maintaining the burden of reserve requirements needs a contemporary rationale that can justify the problems they create. The problems attributed to reserve requirements are woven into the fabric of financial mar...

The original analysis of sponsored search auctions by Varian and independently by Aggarwal et al. did not take into account the notion of reserve prices, which are common across all major search engines. We investigate this further and show that the separability assumption derived by Aggarwal et al. is not sufficient for aligning the greedy allocation employed by GSP and the efficient allocatio...

We build a hybrid model of the aggregate labor market that features both standard labor supply forces and frictions in order to study the cyclical properties of gross worker flows across the three labor market states: employment, unemployment, and nonparticipation. Our goal is to assess the relative importance of frictions and labor supply in accounting for fluctuations in labor market outcomes...

Recently the Board of Governors of the Federal Reserve System solicited comment on a proposal to return to a lagged reserve requirement structure such as that in effect from September 1968 until February 1984. Under such a system the reserve computation period would end well before the beginning of the reserve maintenance period. Individual depository institutions would know their required rese...

Working papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded offi cial Federal Reserve Bank of Cleveland publications. The views stated herein are those of the authors and are not necessarily those of the Federal Reserve Ban...

The high U.S. unemployment rate after the Great Recession is usually considered as a result of changes in factors influencing either the demand side or the supply side of the labor market. However, no matter what factors have caused the changes in the unemployment rate, these factors should have influenced workers’ and firms’ decisions. Therefore, it is important to take into account workers’ e...