Working Papers - Federal Reserve Bank of Atlanta
Working papers present the scholarly research of Atlanta Fed staff economists and visiting scholars. The papers are published throughout the year mainly for academic and professional economists. Available only online.

• Assessing the Welfare Impact of the 2001 Tax Reform on Dual-Earner Families
  Working Paper 2007-27 by Julie L. Hotchkiss and Robert E. Moore. Using a household labor supply model, the authors find that high-education families and families with multiple children experienced the largest welfare gains from the 2001 tax reforms.
• Optimal Fiscal Feedback on Debt in an Economy with Nominal Rigidities
  Working Paper 2007-26 by Tatiana Kirsanova and Simon Wren-Lewis. The authors examine the extent to which different degrees of fiscal feedback influence the ability of monetary policy to stabilize output and inflation.
• Equilibrium Mortgage Choice and Housing Tenure Decisions with Refinancing
  Working Paper 2007-25 by Matthew S. Chambers, Carlos Garriga, and Don Schlagenhauf. Mortgage loan products that allow low down payments or an increasing repayment schedule can temporarily increase participation of young and lower-income households, but not without potential future costs.
• Optimal Simple and Implementable Monetary and Fiscal Rules
  Working Paper 2007-24 by Stephanie Schmitt-Grohé and Martín Uribe. Examining the welfare consequences of alternative monetary and fiscal policy rules, the authors find that optimal monetary policy features an aggressive response to inflation but a muted response to output.
• Asymmetric Expectation Effects of Regime Shifts and the Great Moderation
  Working Paper 2007-23 by Zheng Liu, Daniel F. Waggoner, and Tao Zha. Expectation effects of regime changes are quantitatively important and asymmetric when monetary policy switches between a hawkish regime and a dovish one. Thus, these effects need be taken into account in dynamic stochastic general equilibrium modeling.
• A Discrete Choice Model of Dividend Reinvestment Plans: Classification and Prediction
  Working Paper 2007-22 by Thomas P. Boehm and Ramon P. DeGennaro. The authors construct a model to predict whether firms will add or drop dividend reinvestment plans and determine the factors driving this decision. They provide managerial and investment implications of their research.
• Accounting for Changes in the Homeownership Rate
  Working Paper 2007-21 by Matthew Chambers, Carlos Garriga, and Don E. Schlagenhauf. The U.S. homeownership rate increased during the 1994-2005 period after thirty years of relative stability. The authors examine demographic changes and mortgage market innovations to determine reasons for the increase.
• What Determines the Output Drop after an Energy Price Increase: Household or Firm Energy Share?
  Working Paper 2007-20 by Rajeev Dhawan and Karsten Jeske. Firms' reduced average energy share during the past twenty years has increased the economy's resilience to energy price shocks, the authors find.
• Cigarette Smoking and Food Insecurity among Low-Income Families in the United States, 2001
  Working Paper 2007-19 by Brian S. Armour, M. Melinda Pitts, and Chung-won Lee. Low-income families with a household head or spouse who smokes are more prone to food insecurity—having insufficient funds to buy enough food to maintain a healthy lifestyle.
• Federal Home Loan Bank Advances and Commercial Bank Portfolio Composition
  Working Paper 2007-17 by W. Scott Frame, Diana Hancock, and Wayne Passmore. Using both a theoretical model and empirical estimates, the authors find little relationship between Federal Home Loan Bank advances and the additional provision of mortgage credit.
• Evidence of Demand Factors in the Determination of the Labor Market Intermittency Penalty
  Working Paper 2007-16 by Julie L. Hotchkiss and M. Melinda Pitts. The authors find a significant negative correlation between labor market strength and the wage penalty employers impose on workers who leave and reenter the workforce.
• Microentrepreneurship and the Business Cycle: Is Self-Employment a Desired Outcome?
  Working Paper 2007-15 by Federico S. Mandelman and Gabriel V. Montes Rojas. Using the business cycle to judge the voluntary nature of self-employment in Argentina, the authors show that self-employment is an optimal alternative for individuals with high entrepreneurial skills and is also a refuge for the urban unemployed.
• Taylor Rules with Headline Inflation: A Bad Idea
  Working Paper 2007-14 by Rajeev Dhawan and Karsten Jeske. A central bank that considers core inflation in setting interest rates generally performs better than one that considers energy price shocks. Deemphasizing energy price inflation reduces its impact on output and inflation.
• U.S. Tax Policy and Health Insurance Demand: Can a Regressive Policy Improve Welfare?
  Working Paper 2007-13 by Karsten Jeske and Sagiri Kitao. Removing the tax subsidy on health insurance offered by employers would result in a partial collapse of the group insurance market and reductions in insurance and welfare coverage, the authors find.
• Understanding the New Keynesian Model When Monetary Policy Switches Regimes
  Working Paper 2007-12 by Roger E.A. Farmer, Daniel F. Waggoner, and Tao Zha. Indeterminacy in a passive policy regime may spill over to an active regime to a much larger degree than previously thought. Consequently, the generalized Taylor principle does not hold.
• Commercial Lending Distance and Historically Underserved Areas
  Working Paper 2007-11 by Robert DeYoung, W. Scott Frame, Dennis Glennon, Daniel P. McMillen, and Peter J. Nigro. Using data from the U.S. Small Business Administration, the authors find that the physical distance between small businesses and their bank lenders has been increasing, especially for borrowers located in historically underserved areas.
• Information Criteria for Impulse Response Function Matching Estimation of DSGE Models
  Working Paper 2007-10 by Alastair Hall, Atsushi Inoue, James M. Nason, and Barbara Rossi. The paper proposes an information criterion that selects the relevant impulse responses to use when estimating a macroeconomic model. The information criterion yields superior performance in small samples.
• Multiple Safety Net Regulators and Agency Problems in the European Union: Is Prompt Corrective Action Partly the Solution?
  Working Paper 2007-9 by David G. Mayes, María J. Nieto, and Larry Wall. The issue of banks with cross-border operations is of growing importance around the world. This paper discusses changes needed for the European Union to effectively supervise cross-border groups using prompt corrective action.
• Remittances and the Dutch Disease
  Working Paper 2007-8 by Pablo A. Acosta, Emmanuel K.K. Lartey, and Federico S. Mandelman. In recipient countries, an increase in workers' remittances leads to a decline in labor supply and an increase in consumption that is biased toward nontradables, further causing the real exchange rate to appreciate.
• Simple versus Optimal Rules as Guides to Policy
  Working Paper 2007-7 by William A. Brock, Steven N. Durlauf, James M. Nason, a