While economic theory highlights the usefulness of flexible exchange rates in promoting adjustment in international relative prices, flexible exchange rates also can be a source of destabilizing shocks. We find that when countries joining the euro currency union abandoned their national exchange...

We analyze the role of labor mobility in cushioning labor demand shocks in the Euro Area. We find that foreign born workers' mobility is strongly cyclical, while this is not the case for natives. Foreigners' higher population to employment elasticity reduces the variation of overall employment...

This paper investigates whether or not the adoption of the Euro has facilitated the introduction of structural reforms, defined as deregulation in the product markets and liberalization and deregulation in the labor markets. After reviewing the theoretical arguments that may link the adoption of...

We develop an estimator for latent factors in a large-dimensional panel of financial data that can explain expected excess returns. Statistical factor analysis based on Principal Component Analysis (PCA) has problems identifying factors with a small variance that are important for asset pricing....

Models of voting, including the canonical rational voter model, predict that voters are more likely to turn out when they anticipate a closer election. Yet, evidence of a causal effect of anticipated election closeness on voter turnout is limited. We exploit naturally occurring variation in the...

Studies find price increases for additions to the S&P 500 index but no decreases for deletions. Additions come with good earnings news, suggesting these studies are not just measuring an indexing effect. We develop a regression discontinuity design using Russell Indices for cleaner...