Research

In the summer of 2020, numerous changes were made to immigration policy in response to the Covid-19 pandemic. One such change was the issuance of Proclamation 10014 which restricted access to numerous visa holders. One particularly affected group was the J-1 Summer Work Travel (SWT) visa program where participation when from 108,301 participants in 2019 to 4,952 participants in 2020. This provides a unique opportunity to estimate the labor market impact of immigration. Using a synthetic control method, I estimate the effects on employment levels, average weekly wages, and unemployment from this sudden immigration shock.

Reserve requirements are a form of banking regulation imposed on "depository institutions" requiring them to hold a minimum amount of liquid assets compared to their deposit liabilities. This proportion of liquid assets to deposit liabilities is called the reserve ratio. This practice was used to promote trust in banks and security in the liquidity market starting in the 1800's. They were also used as a form of monetary policy in an effect to control the money supply. In recent years, however, they have fallen out of favor with central banks, with many scraping them completely. Some countries still keep low and stable requirements a bit of a formality while others (Brazil, China, India) change the requirements often and use them as a tool in their monetary policy. We find that reserve requirements are an effective monetary policy tool in countries trying to limit the effect high capital inflows by withdrawing domestic liquidity or as a countercyclical action that will disincentivize capital inflows.

Peer-to-peer lending has always been a form of personal financing but was primarily done through individual social networks. However, in the digital age, it has become possible to lend and borrow from strangers connected through online peer-to-peer lending platforms. Since these platforms only act as intermediaries and do not lend money themselves, they encounter a unique incentive structure to sets interest rates at a market clear level rather than determine rates based on a probabilistic default rate as traditional banks do. Analyzing data from Lending-Club, one such online platform, we attempt to understand the importance of qualitative information in the loan application process. Our findings suggest that small business loans are given preferential treatment through lower interest rates when controlling for expected default rates. This seems to indicate Lending Club is setting the interest rates lower for these loans because people are willing to accept more risk when lending g to small businesses.