Economics

Drawing on 100 million transactions, we show how speculators, hedgers, and market makers interact in the world’s largest FX derivatives market, and that derivatives trading can affect exchange rates. Firms in the largest client sectors—pension and investment funds, insurers, and nonfinancials—use FX derivatives primarily to hedge currency risk, with dealer banks providing the liquidity. Hedge funds, with comparatively smaller net exposures, trade speculatively, whereas dealer banks insulate themselves from changes in speculative demand by taking offsetting positions with hedgers, especially nonfinancials. Non-bank market makers, instead, take residual exchange-rate exposures “on the ..

We provide the first descriptive analysis of the economic value of Community College Baccalaureate (CCB) degrees by examining graduates’ early-career earnings, the costs of completing these programs, and the alignment between field of study and subsequent employment. Using administrative data and controlling for institution and field, we find that CCB graduates earn $4,000 to $9,000 more annually than Associate’s (AA) degree holders one year after graduation but experience average earnings penalties of roughly $2,000 relative to traditional Bachelor’s (BA) recipients. These averages mask substantial heterogeneity: penalties are largest in Computer and Information Technology and Enginee..

U.S. laws make it illegal for employers to knowingly hire undocumented migrants. This legal constraint affects which firms will employ unauthorized workers and what jobs undocumented migrants can expect to get. As a result, unauthorized migrants are more likely to end up in jobs that have a lower risk of detection of immigration status and are less desirable. The Deferred Action for Childhood Arrivals (DACA) policy, which began in August 2012, gave temporary legal authorization to work in the U.S. to a subset of undocumented migrants – those who arrived in the U.S. as children meeting certain other eligibility criteria. In this paper, we use a difference-in-differences strategy to estimate..

Financial Technology (“FinTech”) firms invest significantly more in customer capital relative to traditional financial firms, and such investment builds valuable customer capital. Higher investment by FinTech firms is not accounted for by sectoral focus or differences in firm age. Reasons for higher customer capital investment are explored, including the need to build trust with customers, the focus on downstream segments of the financial marketplace, the operation of platform-based business models, and a heavier reliance on valuable customer data.

This paper studies the critical but underexplored role of subcontracting in shaping the spatial and firm-level effects of federal government spending. Using newly available data on defense subcontract awards linked to establishment-level data from NETS, we examine prime–subcontractor relationships across regions, industries, and over time. We document three key facts. First, subcontracting reallocates a substantial share of federal dollars across geographic areas, weakening the link between the location of prime contracts and where spending ultimately occurs. Second, subcontracting shifts spending across industries, notably from service-sector primes to manufacturing subcontractors. Third,..

This short note computes Trade Restrictiveness Index measures for current U.S. trade policy. Building on the ideas of Anderson and Neary (1996, 2005), the Trade Restrictiveness Index is the uniform tariff that leaves the U.S. consumer as well off as under actual policy. As of October 2025, U.S. trade policy is twice as restrictive as headline tariff numbers suggest. The Trade Restrictiveness Index is 23 percent, which stands in contrast to the 11 percent average tariff rate. Trade policy towards Canada and Mexico is two to three times more restrictive than average tariff rates suggest. Sectoral analysis shows that the restrictiveness is concentrated in vehicles, machinery, and electrical equ..