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on Macroeconomics |
| By: | Max Deter; Kalle Kappner; Hans Lueders |
| Abstract: | Does repression silence dissent or push people to leave? We study the arrest of protesters during East Germany's Peaceful Revolution, using novel micro-data from Leipzig. Residents of streets and houses with an arrested protester were more likely to have left their address once the Berlin Wall fell, and exit visa applications rose in the months after an arrest. Nearby protest activity and support for the opposition show no visible decline after an arrest. Our results suggest that repression raised the demand for exit without a visible retreat of voice, and that residents acted on this demand once leaving became possible. |
| Keywords: | protest, repression, emigration, exit visas, East Germany, autocratic breakdown |
| JEL: | H10 N44 P20 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13036 |
| By: | Alberto G. Musalem |
| Abstract: | St. Louis Fed President Alberto Musalem gave remarks on Day 1 of the 14th annual Community Banking Research Conference. He introduced Federal Reserve Vice Chair for Supervision Michelle Bowman. The conference, which is held at the Federal Reserve Bank of St. Louis, was co-sponsored by the Federal Reserve System, Conference of State Bank Supervisors (CSBS) and Federal Deposit Insurance Corp. (FDIC). |
| Keywords: | community banks |
| Date: | 2026–10–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlps:103892 |
| By: | Sriram Nagaraj; Seung Jung Lee |
| Abstract: | Financial stability rests on the premise that distress is largely idiosyncratic and therefore diversifiable: when one institution errs, the rest of the system absorbs the shock. That premise fails when many decision-makers depend on the same infrastructure. Agentic AI systems, which take consequential actions rather than only emitting predictions, are becoming such a substrate, and the binding concern shifts from the model risk of a single deployment to the systemic risk of the population. We develop this account in six mathematical settings. Chapter 1 recasts the PD/LGD/EAD decomposition of expected loss as an expected-harm identity and introduces a set-valued containment-risk measure; under a lever-assignment axiom that review cannot intercept an irreversible action, no non-preventive control satisfies a coherent tail constraint. Chapter 2 lifts this to a fleet sharing a foundation model: the shared model is a non-diversifiable common exposure whose expected-shortfall floor holds however large the fleet grows, and a percolation threshold governs contagion. Chapter 3 recasts these dynamics as a marked, Hawkes-excited jump diffusion, identifying the robust stress problem with a time-consistent entropic risk measure. Chapter 4 treats runtime guardrails as partially observed stochastic control, giving an observability trichotomy, a detection floor, and, under commit exogeneity, a runtime-impossibility corollary. Chapter 5 makes the adversary a player, yielding an underinvestment wedge proportional to systemic reach. Chapter 6 makes capability a state variable in an arms race. One claim runs through all six: the systematic component of agentic risk cannot be diversified, detected away, or reversed, and only ex-ante structural prevention moves it. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.08806 |
| By: | Sebasti\'an Calcetero Vanegas; Ian Weng Chan |
| Abstract: | Credibility theory combines individual experience with portfolio information for insurance pricing, but classical formulations focus primarily on conditional means and expected premiums. We propose a Dirichlet mixed-membership model (DMMM) for multivariate distributional credibility. Policyholder risk is represented by a stable composition over latent risk classes: baseline characteristics determine its a priori assessment, while repeated multivariate experience progressively updates its a posteriori assessment. Support-specific expert distributions accommodate heterogeneous outcomes, with dependence induced through the shared latent structure. The resulting posterior predictive distribution can be written exactly as a convex combination of portfolio and experience components, extending the familiar credibility-factor structure beyond the conditional mean. We study the framework through a simulation experiment and a vehicle telematics application. The simulation shows that relatively simple experts can capture complex multivariate insurance distributions and learn policyholder-specific risk as experience accumulates. In the telematics application, recent claims and driving behaviour provide complementary information for future claim-frequency prediction, allowing similar policyholders to receive different experience-rated assessments. The DMMM therefore provides a flexible and interpretable framework for combining heterogeneous insurance experience while retaining the structure of classical credibility. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.05741 |
| By: | Yu, Xuewen |
| Abstract: | Individual-level time series data, such as longitudinal survey data, are increasingly used for policy evaluation. To infer the impact of a policy given such data, we propose a hierarchical Bayesian structural time series (HBSTS) model that extends the existing Bayesian structural time series model. Hierarchical Bayesian structural time series can accommodate multiple observations per time point by adding an extra layer to capture individual-level variation. It also uses a regularized horseshoe prior with a signal-adaptive variable selection algorithm. These extensions provide a more flexible and realistic framework for policy evaluation, and make inference less sensitive to the prior specification of the expected model size (i.e. the expected number of covariates included in the model that are predictive of outcomes). In simulation studies, HBSTS demonstrated greater robustness to misspecification of the expected model size and was more powerful in detecting putative intervention effects compared with BSTS. We apply our model to the UK Household Longitudinal Study to investigate the impact of a UK immigration policy reform. Our findings indicated that the policy led to psychological distress among individuals from Black Caribbean backgrounds, which was also observed in an earlier Bayesian interrupted time series analysis, though derived by comparing them with people from White backgrounds. |
| Keywords: | Bayesian structural time series;causal inference;synthetic control method |
| JEL: | C1 |
| Date: | 2026–10–06 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141174 |
| By: | Marina Diakonova (Banco de España); Julia Estefania-Flores (Banco de España); Corinna Ghirelli (Banco de España); Ana Peñalosa (Banco de España); Javier J. Pérez (Banco de España); Aitana Simó (Banco de España) |
| Abstract: | We propose a narrative-based approach to construct high-frequency measures of political polarization and legislative gridlock for seven democracies: France, Germany, Spain, Italy, the United Kingdom, the United States and Canada. Our indices reveal that polarization has risen markedly since the Global Financial and Sovereign Debt Crises, with a faster increase in North America than in Europe. Through a range of exercises we show that the two indices respond differently to elections and unified government control, and that the latter weakens the pass-through between political polarization and gridlock. Consistent with the literature, we also find that investment declines following an increase in either index. Together, these high-frequency, cross-country measures provide a new tool for comparative political economy analysis. |
| Keywords: | political polarization, legislative gridlock, textual analysis, cross-country analysis |
| JEL: | D72 D74 H3 P16 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2636e |
| By: | Ran Abramitzky; Jacob Conway; Roy Mill; Luke C. D. Stein |
| Abstract: | We study differences in economic outcomes by perceived skin tone among African Americans using full-count U.S. decennial census data from the late-19th and early-20th centuries. Comparing children coded as "Black" or "Mulatto" by census enumerators and linking these children across population censuses, we first document large gaps in educational attainment and income among African Americans with darker and lighter perceived skin tones. To disentangle the drivers of these gaps, we identify all 35, 992 families in which enumerators assigned same-gender siblings different Black/Mulatto classifications. Relative to sisters coded as Mulatto, sisters coded as Black had lower educational attainment, were less likely to marry, and had less-educated, likely lower-earning husbands. These patterns are consistent with more severe contemporaneous discrimination against African American women with darker perceived skin tones. In contrast, we find similar educational attainment, marital outcomes, and incomes among differently-classified brothers. Men perceived as African Americans of any skin tone faced similar contemporaneous discrimination, consistent with the "one-drop" racial classification rule that grouped together individuals with any known Black ancestry. Lower incomes for African American men perceived as having darker skin tone in the general population were driven by differences in opportunities and resources that varied across families, likely reflecting the impacts of historical or family-level discrimination. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.10606 |
| By: | Masyutina, Olga; Bolz, Susanna |
| Abstract: | As complex social systems face increasing environmental and societal pressures, understanding their resilience is central to sustainability transitions. We systematically review 65 empirical studies of resilience in subnational social systems and develop a conceptual synthesis of resilience through three complementary analytical lenses: disturbances, system capacities and spatial contexts. We first classify disturbances along three dimensions–temporal structure, origin and domain–highlighting their overlapping and often multi-causal nature. We further synthesize thirteen resilience characteristics into four interrelated capacities: structural, relational, governance and dynamic. Our findings show that resilience is shaped not by individual capacities but by their combination in response to different disturbances. Their prominence also varies across spatial scales, indicating that resilience is spatially embedded. We argue that resilience is therefore best understood as a place-based, multidimensional process emerging from interactions between disturbances, capacities and the contexts in which systems operate. |
| Keywords: | Resilience, Sustainability Transition, Social System, Subnational Level, Transformative Capacity |
| JEL: | O18 Q56 R58 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:atv:wpaper:2603 |