Benjamin Faber, Thibault Fally, 02 August 2017

A recent literature has documented the impact of firm heterogeneity on workers’ earnings. This column assesses firm heterogeneity in the context of its impact on households’ cost of living. Rich and poor households source their consumption differently, and are therefore impacted differently by asymmetries in heterogeneous firms. An analysis suggests that moderate trade liberalisation could lead to a 1.5-2.5% lower cost-of-living inflation in retail consumption for the richest 20% of US households compared to the poorest 20%.

Christiane Baumeister, Lutz Kilian, 08 February 2016

Expectations play a key role in assessing how oil price fluctuations affect the economy. This column explores how consumers, policymakers, financial market participants, and economists form expectations about the price of crude oil, the differences in these expectations, and why future realisations of the price of oil so often differ substantially from these expectations. Differences in oil price expectations are shown to matter for quantifying oil price shocks and their transmission. 

Bastian Von Beschwitz, Donald Keim, Massimo Massa, 02 July 2015

High-frequency news analytics can increase market efficiency by allowing traders to react faster to new information. One concern about such services is that they might provide a competitive advantage to their users with potential distortionary price effects. This column looks at how high frequency news analytics affect the stock market, net of the informational content that they provide. News analytics improve price efficiency, but at the cost of reducing liquidity and with potentially distortionary price effects.

Orley Ashenfelter, Daniel Hosken, Matthew Weinberg, 18 September 2013

The American football season is here. Bud, Miller, or Coors, the classic American lagers, are the beverage of choice to accompany the big game throughout the US. Despite the recent surge of microbrews and imports, the big three brands still capture more than 60% of the market. With the recent merger of Miller and Coors, only two large national brewers remain. No doubt many beer drinkers have wondered whether this merger has raised the price of their brand.

John List, 05 November 2009

Little is known about the basic economic principles of open-air markets and bazaars, which have existed for centuries. This column explores the fundamental underpinnings of such markets. While exchange prices approach the prediction of competitive market equilibrium theory, such markets are ripe for price manipulation.

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