Racial Discrimination and Competition

We provide the first assessment of whether an intensification of product market competition reduces the racial wage gap exactly where taste-based theories predict that competition will reduce labor market discrimination. in economies where employers have strong racial prejudices. We use bank deregulation across the U.S. states to identify an intensification of competition among banks, which in turn lowered entry barriers facing nonfinancial firms, especially firms that depend heavily on bank credit. Consistent with taste-based theories, we find that competition boosted blacks' relative residual wages within the banking industry and bank-dependent industries, but only in states with strong tastes for discrimination.Discrimination, imperfect competition, banks, regulation

Big Bad Banks? The Winners and Losers From Bank Deregulation in the United States

We assess the impact of bank deregulation on the distribution of income in the United States. From the 1970s through the 1990s, most states removed restrictions on intrastate branching, which intensified bank competition and improved bank performance. Exploiting the cross-state, cross-time variation in the timing of branch deregulation, we find that deregulation materially tightened the distribution of income by boosting incomes in the lower part of the income distribution while having little impact on incomes above the median. The results suggest that regulatory impediment to competition among banks during the 20th century were disproportionally harmful to lower income workers.Financial Institutions;Government Policy and Regulation;Income Inequality

Big Bad Banks? The Impact of U.S. Branch Deregulation on Income Distribution

By studying intrastate branch banking reform in the United States, this paper provides evidence that financial markets substantively influence the distribution of income. From the 1970s through the 1990s, most states removed restrictions on intrastate branching, which intensified bank competition and improved efficiency. Exploiting the cross-state, cross-time variation in the timing of bank deregulation, we evaluate the impact of liberalizing intrastate branching restrictions on the distribution of income. We find that branch deregulation significantly reduced income inequality by boosting the incomes of lower income workers. The reduction in income inequality is fully accounted for by a reduction in earnings inequality among salaried workers.

Semiclassical S-matrix for black holes

We propose a semiclassical method to calculate S-matrix elements for two-stage gravitational transitions involving matter collapse into a black hole and evaporation of the latter. The method consistently incorporates back-reaction of the collapsing and emitted quanta on the metric. We illustrate the method in several toy models describing spherical self-gravitating shells in asymptotically flat and AdS space-times. We find that electrically neutral shells reflect via the above collapse-evaporation process with probability exp(-B), where B is the Bekenstein-Hawking entropy of the intermediate black hole. This is consistent with interpretation of exp(B) as the number of black hole states. The same expression for the probability is obtained in the case of charged shells if one takes into account instability of the Cauchy horizon of the intermediate Reissner-Nordstrom black hole. Our semiclassical method opens a new systematic approach to the gravitational S-matrix in the non-perturbative regime.Comment: 41 pages, 13 figures; Introduction rewritten, references added; journal versio