Category: Uncategorized

Henry Weiland and Megan Yeo, Harvard University -- Do foreign central bank policy announcements impact domestic markets? In which direction do these spillovers occur? To answer these questions, we use changes in a country’s two-year nominal yield around policy announcements as a proxy for monetary shocks. We aim to determine the causal effect of these announcements on other countries’ financial instruments. We observe significant movements in 10-year yield spreads surrounding monetary policy announcements in developed economies, yet not stemming from announcements in emerging-market economies. Results appear most pronounced among geographic neighbors.

Erica Ewing Zhou, Northwestern University -- Previous research has established that the transition from face-to-face instruction to distance education during the COVID-19 pandemic adversely impacts the academic performance of students in grades 3 through 8. To date, however, little is known if similar effects of instruction mode changes apply to students in higher grade levels. This study investigates this gap by using high school test proficiency and dropout rates data from six U.S. states. Contrary to the existing literature, this study reveals that high school students on average did not experience considerable learning losses during the pandemic, with no compelling evidence of widening achievement gaps among marginalized groups.

Erin Lillis, Grinnell College -- This paper analyzes the efficacy of residency restriction laws placed on sex offenders post-incarceration in Montana, North Dakota, and South Carolina. These laws give a specific radius within which those they deem “high-risk” sex offenders cannot live. A Callaway-Sant’Anna difference-in-difference model with state and year fixed effects is utilized as the identification strategy. The main finding is that the law’s enactment led to an increase of 23.9 sex crimes per 100,000. It also led to a substantial increase in the proportion of sex crime victims under the age of 18. Results from a synthetic control model and an alternative difference-in-difference specification also found that the law did not substantially decrease sex crimes. The recommendation based on these results is that residency restriction laws are not effective policy initiatives to reduce sex crimes, especially against children.

Johnny O’Meara, University of Notre Dame -- This paper makes two contributions. First is proposing a permutation test for testing equality of variances in two populations. The test is easy to implement, has exact size in finite samples under the sharp null, and has correct size in large samples. Monte Carlo simulations allow for a comparison between the permutation test and classical tests for equality of variances that point to many settings where the permutation test outperforms classical tests. Second is to demonstrate that testing for clustering in regression analysis can be thought of as testing for equality of variances. Finally, the permutation test is empirically illustrated using data from Tennessee’s Project STAR. The permutation test indicates that clustering should be done at the classroom level, which is consistent with previous findings.

Ezra Polesky, Occidental College -- This paper examines the impact of monetary policy announcements on equity markets, with a particular focus on how dynamics have shifted since the rise of forward guidance. A new method is used to estimate the surprise component of monetary policy announcements. Notably, this paper finds that with the rise of forward guidance, equity markets demonstrate heightened sensitivity to surprise monetary policy announcements. Capital-intensive and cyclical industries are the most responsive segments of the market to surprise monetary policy announcements, both before and after the rise of forward guidance.