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 official Federal Reserve Bank of Cleveland publications. The views stated herein are those of the authors and are not necessarily those of the Federal Reserve Bank...

This paper evaluates the effects of introducing labor market flexibility into a small open economy characterized by tenure-increasing separation taxes. The model, which is calibrated to Argentinean observations, is subjected to different reforms: 1) the elimination of all separation costs, 2) the introduction of temporary contracts, and 3) the elimination of the separation costs from all new hi...

Intellectual property protection involves a trade-off between the undesirability of monopoly and the desirable encouragement of creation and innovation. As the scale of the market increases, due either to economic and population growth or to the expansion of trade through treaties such as the World Trade Organization, this trade-off changes. We show that, generally speaking, the socially optima...

The views in this paper are solely the responsibility of the authors and should not be interpreted as reflecting the views of the Federal Reserve Bank of San Francisco or the Board of Governors of the Federal Reserve System. ABSTRACT A recent decline in internal migration in the United States may have been caused in part by falling house prices, through the " lock in " effects of financial cons...

The market for corporate credit is characterized by significant seasonal variation, both in interest rates and the volume of new lending. Firms borrowing from banks during seasonal “sales” in late spring and fall issue at 19 basis points cheaper than winter and summer borrowers. Issuers during cheap seasons appear to have less immediate needs, but are enticed by low rates to engage in precautio...

In moral hazard models, bank shareholders have incentives to transfer wealth from the deposit insurer --that is, maximize put option value-by pursuing riskier strategies. For safe banks with large charter value, however, the risk-taking incentive is outweighed by the possibility of losing charter value. Focusing on the relationship between book value, market value, and a risk measure, this pape...

Abstract A decision to invest in the development of an oil reserve requires an in-depth analysis of several uncertainty factors. Such factors may involve either technical uncertainties related to the size and economic quality of the reserve, or market uncertainties. When a great number of investment alternatives are involved, the task of selecting the best alternative or a decision rule is very...

The fast development of renewable energy has resulted in great challenges to the power system, which urgently needs more flexible resources maintain a system supply/demand balance. This paper established multi-stage electricity market framework presence load aggregator (LA) including day-ahead energy/reserve and real-time balanced market. To actively participate reserve market, profile percepti...

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 official Federal Reserve Bank of Cleveland publications. The views stated herein are those of the authors and are not necessarily those of the Federal Reserve Bank...