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Economic Research

Liberty Street Economics
Calming the Panic: Investor Risk Perceptions and the Federal Reserve’s Emergency Lending During the 2023 Bank Run
The authors investigate how the Federal Reserve’s liquidity support affected investor risk perceptions during the bank run in the spring of 2023. They find that the announcement of the Fed’s novel Bank Term Funding Program, and subsequent borrowings from the program, substantially reduced investor risk perceptions. However, borrowings from the Fed’s traditional discount window (DW) had no such effect, suggesting that liquidity programs targeting the specific causes of a crisis may be more effective.
By Natalia Fischl-Lanzoni, Martin Hiti, and Asani Sarkar
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The Financial Stability Implications of Tokenized Investment Funds
The use cases of tokenized investment funds are currently limited to the digital asset ecosystem. However, the recent approval of cryptocurrency exchange-traded funds and the passage of the GENIUS Act raise concerns about the impact of these tokenized investment funds to the broader financial system. The authors assess this impact by considering three economic mechanisms: liquidity transformation, interconnections between the digital asset and the traditional financial system, and transaction settlement.
By Pablo Azar, Francesca Carapella, JP Perez-Sangimino, Nathan Swem, and Alexandros P. Vardoulakis
Financial Intermediaries and Pressures on International Capital Flows
Global factors drive fluctuations of international capital flows and put pressure on exchange rates. Global liquidity—cross-border bank lending and financing of issuance of international debt securities—has sensitivities to risk conditions that have evolved considerably over time. This risk sensitivity has been driven, in part, by the composition and business models of the financial institutions involved in funding. The authors explore whether these same features have led to changes in the pressures on currency values as risk conditions evolve.
By Linda S. Goldberg and Samantha Hirschhorm
The New York Fed DSGE Model Forecast—September 2025
The authors present an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. They describe their forecast and its change since June 2025.
By Marco Del Negro, Ibrahima Diagne, Elena Elbarmi, Donggyu Lee, and Michael Pham
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Are Businesses Scaling Back Hiring Due to AI?
To explore the effects of artificial intelligence on employment, the authors’ regional business surveys asked firms about their adoption of AI and if they had made any adjustments to their workforces. The surveys found that, despite a notable increase in AI use over the past year, very few firms reported AI-induced layoffs. However, AI is influencing recruiting, and future layoffs and hiring reductions due to AI use are expected to increase, especially for workers with a college degree.
By Jaison R. Abel, Richard Deitz, Natalia Emanuel, Ben Hyman, and Nick Montalbano
Financial stability: A classic bank building with columns, financial symbols, and charts, showcasing the reliability and trustworthiness of a bank
Economic Capital: A New Measure of Bank Solvency
Bank supervisors, industry analysts, and academic researchers rely on a range of metrics to track the health of both individual banks and the banking system as a whole. Many of these metrics focus on bank solvency. The authors draw on their recent research to describe a new solvency metric—economic capital—that is more forward-looking, more timely, and more comprehensive in its assessment of solvency than many current measures.
By Beverly Hirtle and Matthew Plosser
RESEARCH TOPICS
Applied Macroeconomics
and Econometrics Center
The mission of the Applied Macroeconomics and Econometrics Center (AMEC) is to provide intellectual leadership in the central banking community in the fields of macro and applied econometrics.

Data Releases
Global Supply Chain Pressure Index
(Updated: Monthly)

Measuring the Natural Rate of Interest
(Updated: Quarterly)

Multivariate Core Trend Inflation
(Updated: Monthly)

The New York Fed DSGE Model
(Updated: Quarterly)

New York Fed Staff Nowcast
(Updated: Weekly)

Outlook-at-Risk
(Updated: Monthly)

Treasury Term Premia
(Updated: Daily)

Yield Curve as a Leading Indicator
(Updated: Monthly)
Center for Microeconomic Data
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Losses from Natural Disasters
Losses from Natural Disasters provides county-level estimates of the economic and human impact of extreme weather events in the United States.
Reserve Demand Elasticity (RDE)
RDE estimates provide a quantitative measure of the ampleness of reserves in the U.S. banking system in real time. New data are published monthly.
Economic Heterogeneity Indicators (EHIs)
The EHIs are broad-based economic indicators that measure macroeconomic outcomes experienced by different demographic, economic, and geographic groups on both a regional and national level.
Corporate Bond Market Distress Index (CMDI)
The CMDI is a summary metric of corporate bond market functioning based on information from multiple sources including measures of primary market issuance and pricing, secondary market pricing and liquidity conditions, and the relative pricing between traded and nontraded bonds. It updates monthly.
Regional Surveys
Monthly surveys conducted by the New York Fed track the sentiment of executives at regional manufacturing and service-sector firms regarding business conditions.

Data Releases
Empire State Manufacturing Survey
(Updated: Monthly)

Business Leaders Survey
(Updated: Monthly)

Regional Business Surveys:
Special Topics
(Updated: Quarterly)
Regional Employment Trends
These interactive charts track employment in state and metro regions in the Federal Reserve’s Second District, utilizing the New York Fed’s early benchmarks of payroll employment data. It updates monthly.
Mapping Home Price Changes
Explore year-over-year changes in home prices since 2003, both regionally and nationally, using this dynamic map — updated with new home price index data on a monthly basis. Hover over a county for granular data.
Early Benchmarked Employment Data
Monthly releases of early benchmarked employment figures for New York State, New Jersey, Puerto Rico, and the U.S. Virgin Islands, as well as the metropolitan areas in New York and Northern New Jersey
The Labor Market for Recent College Graduates
Conditions remained challenging for recent college graduates during the second quarter of 2025. The unemployment rate averaged 5.3 percent, in line with the first quarter, and the underemployment rate held steady at just over 41 percent.
Recent Publications
Financial Inclusion in the United States: Measurement, Determinants, and Recent Developments
In recent years, technological change and pandemic-related policies have helped expand access to banking, credit, and payment services to more consumers. However, many people and small firms still lack access to financial services to help them better manage day-to-day finances, absorb economic shocks, and build wealth. The authors review financial inclusion in the U.S., drawing on survey evidence and academic studies, to identify the causes of financial exclusion and the effectiveness of alternative efforts to expand financial inclusion.
Matteo Crosignani, Jonathan Kivell, Daniel Mangrum, Donald Morgan, Ambika Nair, Joelle Scally, and Wilbert van der Klaauw, Economic Policy Review 31, no. 3, September
Transformative and Subsistence Entrepreneurs: Origins and Impacts on Economic Growth
Technological progress depends on the interaction between entrepreneurs and inventors, and the nature of this interaction hinges on the type of entrepreneur. Subsistence entrepreneurs typically focus on day-to-day operations with limited growth ambitions, while transformative entrepreneurs seek to commercialize novel ideas and drive innovation. Using Danish microdata, the authors show that transformative entrepreneurs—those who hire R&D workers—tend to have higher IQ and education and build fast-growing firms than other entrepreneurs.
Ufuk Akcigit, Harun Alp, Jeremy Pearce, and Marta Prato, Staff Report 1166, September 2025
How Retrainable Are AI-Exposed Workers?
The debate over whether advances in artificial intelligence (AI) will ultimately complement or substitute labor has drawn significant attention. However, there is a dearth of research examining the role that existing job training programs might play in helping AI-exposed workers adapt to the evolving labor market. The authors assemble a new workforce development dataset and document that workers in AI-exposed occupations are surprisingly resilient in adjusting to AI pressures through job training.
Benjamin Hyman, Benjamin Lahey, Karen Ni, and Laura Pilossoph, Staff Report 1165, August 2025
How Do Supply Shocks to Inflation Generalize? Evidence From the Pandemic Era in Europe
The authors document how the interaction of supply chain pressures, elevated household inflation expectations, and firm pricing power contributed to the pandemic-era surge in consumer price inflation in the euro area. Initially, supply-side shocks exerted more inflationary pressure on directly affected sectors such as manufacturing. However, despite a later easing of these shocks, inflation became increasingly generalized across the entire European economy, extending even to sectors not directly impacted by supply constraints, such as services.
Viral V. Acharya, Matteo Crosignani, Tim Eisert, and Christian Eufinger, Staff Report 1164, August 2025
A Practitioner’s Note on the Shapley-Owen-Shorrocks Decomposition
The authors provide a simple overview of the Shapley-Owen-Shorrocks decomposition, an effective alternative when studying non-linear outcomes that come from the interaction of various factors. They show that using the Shapley-Owen value, extended to inequality decompositions in Shorrocks (1999, 2013), provides an additive decomposition that sums to one and is easily interpretable in terms of the contribution of different inputs (or groups of them) to some aggregate outcome. They also provide several examples to help implement the approach.
Richard Audoly, Rory McGee, Sergio Ocampo, and Gonzalo Paz-Pardo, Staff Report 1163, August 2025
Nonlinear Micro Income Processes with Macro Shocks
The authors propose a nonlinear framework to study the dynamic transmission of aggregate and idiosyncratic shocks to income by leveraging both macro and micro data. Their approach makes it possible to empirically examine how business-cycle fluctuations modulate the persistence of heterogeneous individual histories and the risk faced by households. This information is essential for documenting the dynamics of income inequality over the business cycle and for the design of optimal monetary and fiscal policies.
Martín Almuzara, Manuel Arellano, Richard Blundell, and Stéphane Bonhomme, Staff Report 1162, August 2025
Understanding the Pricing of Carbon Emissions: New Evidence from the Stock Market
Are carbon emissions priced in equity markets? The question is crucial for evaluating how climate-related exposures may affect asset valuations, capital allocation, and the transmission of monetary policy. The authors develop a stylized model and derive and test new predictions using data from the U.S. stock market. They find convincing evidence that emissions intensity is priced in equity markets but is highly sensitive to the inclusion of a few “super emitters,” mostly firms operating in electric power generation.
Matteo Crosignani, Emilio Osambela, and Matthew Pritsker, Staff Report 1161, August 2025
Can Redemption Fees Prevent Runs on Funds?
In September 2008, the failure of Lehman Brothers sparked a $400 billion run on prime money market funds. The Securities and Exchange Commission (SEC) introduced a reform in 2014 in response, which allowed a fund to limit redemptions and impose a redemption fee when its liquid assets fell below a threshold. The authors study how redemption fees can best be used to prevent runs, with the goal of providing a framework for evaluating reform proposals.
Xuesong Huang and Todd Keister, Staff Report 1160, August 2025
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