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Economic Research

Liberty Street Economics
Explaining the K-Shaped Economy: What’s Behind the Divide?
The authors explore the reasons behind the divergence in consumer spending in which higher-income households experience faster spending growth than lower-income households. Their analysis finds that net worth has increased the most for high-income households, while inflation has risen the most for low-income households. Both factors help explain why real retail spending rose the most for high-income households.
Rajashri Chakrabarti, Thu Pham, Beck Pierce, and Maxim L. Pinkovskiy
The R*–Labor Share Nexus
Over the past quarter century, the U.S. economy has experienced significant declines in both the labor share of income and the natural rate of interest, referred to as “r-star.” The authors provide a simple model that captures the joint evolution of the labor share and R*, which they call the R*-labor share nexus. Their key finding is that structural changes affecting R* also influence the evolution of the labor share and thereby wages and prices.
By Sophia Cho and John C. Williams
Use of Gen AI in the Workplace and the Value of Access to Training
The rapid spread of generative AI tools is reshaping the workplace at a remarkable rate. Yet relatively little is known about whether workers have access to these tools, how these tools affect their daily productivity, and how much workers value the training needed to use them effectively. The authors draw on supplemental questions in the November 2025 Survey of Consumer Expectations to shed light on these questions.
By Ali Hashim, Gizem Kosar, and Wilbert van der Klaauw
Photo: Hurricane Debby tropical rainstorm flooded residential homes and cars in suburban community in Sarasota, Florida. Aftermath of natural disaster.
What Millions of Homeowner’s Insurance Contracts Reveal About Risk Sharing
Housing is the largest component of household wealth in the United States, and when natural disasters strike, the resulting damage to homes can be large relative to households’ liquid savings. But surprisingly little is known about how homeowner’s insurance contracts are actually designed with respect to property risk. The authors use their latest Staff Report to examine how homeowner’s insurance contracts are structured in practice.
By Hyeyoon Jung and Jaehoon (Kyle) Jung
AI generated decorative image of flags of emerging markets done in the style of watercolor.
A Closer Look at Emerging Market Resilience During Recent Shocks
A succession of shocks to the global economy in recent years has focused attention on the improved economic and financial resilience of some emerging market economies. However, for a much larger share of countries, the ability to weather shocks is still mixed, and many remain vulnerable. The authors explore the divide between these two sets of countries and focus on the effects of recent economic shocks, including the ongoing conflict in the Middle East.
By Hunter Clark, Jeff Dawson, and Julian Gonzalez-Murphy
Image of the Federal Reserve building in Washington, D.C.
The Fed Has Two Tools to Influence Money Market Conditions
The Federal Reserve’s 2022-23 tightening cycle involved the use of two monetary policy tools: changes in administrative rates and changes in the size of its balance sheet. The authors highlight their recent Staff Report that explores how these tools affect money market conditions. They find that both tools have significant effects on the pricing of funds sourced through repo, which suggests that the Fed can manage how financing conditions are affected even as it influences economic conditions.
By Adam Copeland and Owen Engbretson
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)

Labor Market Tightness 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
AI generated, people walking in office building.
Labor Market Tightness Index
The HPW Labor Market Tightness Index is an indicator of labor market tightness for summarizing current wage pressures and predicting wage inflation.
Photo: a four-panel picture of people cleaning up after natural disasters
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
Labor market conditions continued to be challenging for recent college graduates at the start of 2026. The unemployment rate remained elevated at about 5.7 percent in the first quarter of 2026, though the underemployment rate edged down to 41.5 percent.
Recent Publications
Financial Shocks, Productivity, and Prices
Financial crises are frequently followed by persistent slowdowns in aggregate productivity growth. The authors study the interconnection between the productivity and pricing effects of financial shocks. They show that a tightening of credit conditions has a persistent, yet delayed, negative effect on firms’ long-run physical productivity growth while also inducing firms to change their pricing policies. Also, they demonstrate that the pricing adjustments themselves have productivity implications.
Simone Lenzu, David A. Rivers, Joris Tielens, and Shi Hu, Staff Report 1193, April 2026
Artificial Intelligence and Monetary Policy: A Framework and Perspective on Cyclical Transmission, Structural Transition, and Financial Stability
The author develops a framework analyzing how artificial intelligence (AI) reshapes monetary policy through three interrelated channels: cyclical transmission, structural transition, and financial stability. Given that central bank mandates center on price stability and financial stability, these developments place AI squarely within the domain of central banking. The author argues that AI does not call for a redefinition of central banks’ objectives, but it does require a recalibration of existing frameworks.
Simone Lenzu, Staff Report 1192, April 2026
Estimating Demand Shocks from Foot Traffic: A Big-Data Approach
Demand shocks in the service, retail trade, and health sectors are challenging to measure because output only occurs when a customer arrives at an establishment. The authors leverage high-frequency foot-traffic data to estimate demand shocks across New York City’s retail, service, and health sectors. Their analysis shows that demand dynamics in these customer-facing industries are fundamentally heterogeneous: establishments differ systematically in the persistence, volatility, and growth patterns of their demand processes.
Marina Azzimonti, David Wiczer, and Yang Xuan, Staff Report 1191, April 2026
Structural Changes in Investment and the Waning Power of Monetary Policy
Growing evidence suggests that monetary policy shocks have smaller effects on economic activity now than in the past, even putting aside issues of an effective lower bound on interest rates. The authors propose a partial explanation: secular change in both the production and composition of investment goods has weakened private investment’s role in the transmission of monetary policy to labor earnings and consumption. They demonstrate how these results may have important implications for optimal monetary policy.
Justin Bloesch and Jacob P. Weber, Staff Report 1190, March 2026
Repo and the Liquidity Risk Premium
Intermediating funds in the U.S. short-term money markets involves risk, which can be mitigated by holding buffers of liquid securities. The cost of holding these buffers, the liquidity risk premium, is driven by the opportunity cost of holding money and therefore is influenced by monetary policy. The authors use detailed data on the pricing of repurchase agreements (repo) to measure how changes in monetary policy affect the liquidity risk premium embedded in repo pricing.
Adam Copeland and Owen Engbretson, Staff Report 1189, March 2026
Intraday Price Pressure and Order Flow Around U.S. Treasury Auctions
U.S. Treasury securities attract strong investor demand, enabling the U.S. Treasury Department to issue debt at favorable rates at regular auctions. Using 33 years of intraday Treasury data, the authors provide the first high-frequency evidence on auction-day price pressure: yields rise in the hours before auction and reverse afterward. Also, net order flow dominates in explaining the pressure, providing the first direct evidence that trading transmits dealer constraints into prices.
Michael Fleming, Weiling Liu, and Giang Nguyen, Staff Report 1188, March 2026
When Long-Run Trends Are Unknown: Bond Pricing Implications
The term structure of Treasury yields is key to bond investors’ information sets and forecasts. It also helps policymakers assess economic conditions and calibrate policy stances. Central to this is the long-run neutral real rate of interest, r-star; however, r-star is inherently unobservable and must be inferred from imperfect models and data. The authors propose a new model that quantifies how much the Treasury yield curve can imply about r-star when bond investors face uncertainty about its true level.
Borel Ahonon and Guillaume Roussellet, Staff Report 1187, March 2026
Systemic Cyber Risk
Cyber risk has grown to be broadly recognized as a source of vulnerability for financial stability, with virtually every layer of the financial system architecture having experienced a material cyber attack in the last five years. The authors propose a quantitative framework to track systemic risk arising from cyber vulnerabilities of the U.S. financial system. Synthesizing financial, economic, cyber, and network data, they develop an index that tracks financial-system-level cyber vulnerability (SCV) for the financial system.
Steven D. Baker and Michael Junho Lee, Staff Report 1186, February 2026


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