Economic Research

Just Released: April Empire State Manufacturing Survey Indicates Sluggish Conditions
The April 2015 Empire State Manufacturing Survey, released today, points to continued weakness in New York’s manufacturing sector. The survey’s headline general business conditions index turned slightly negative for the first time since December, falling 8 points to -1.2 in a sign that the growth in manufacturing had paused.
By Jason Bram and Richard Deitz
Please Read This before Betting against Government Bond Betas
Durham describes how and why “betting against beta” with government bonds might work. He finds that the magnitude of absolute returns using this trading strategy tends to rival gains on the S&P 500, and then describes three issues that “test” this strategy.
By J. Benson Durham
Population Lost: Puerto Rico’s Troubling Out-Migration
Abel and Deitz examine the recent surge in out-migration that is driving Puerto Rico’s population decline and discuss measures the Island could adopt to address this troubling trend.
By Jaison R. Abel and Richard Deitz
Crisis Chronicles: The Panic of 1825 and a Most Fantastic Financial Swindle
The banking panic of 1825 has been called the first modern financial crisis, the first Latin American crisis, and the first emerging market crisis—but it is perhaps best known for a bond market swindle surrounding an entirely made-up Central American principality. In this edition of Crisis Chronicles, the authors explore the panic of 1825 and visit the mythical nation of Poyais.
By Don Morgan and James Narron
Supplemental Survey Report
Regional manufacturers and service sector firms in the New York-Northern New Jersey region respond to survey questions focused on job vacancies, worker skills, and wages.
Empire State Manufacturing Survey
Empire State Manufacturing Survey
Latest survey for April 2015 finds business activity was flat for New York manufacturers.
Business Leaders Survey
Business Leaders Survey
The April 2015 survey indicates that regional service sector activity expanded following a pause in February and March.
Greenboard with math squiggles for DSGE model artwork
In recent work, economists described the New York Fed’s dynamic stochastic equilibrium model, assessed its forecasting accuracy, and shared source code used for model estimation.
Research Topics in Focus: College grads
Is College Worth It?
Students in recent years have been paying more to attend college and earning less upon graduation—trends that have raised questions about whether a college education remains a good investment. But research from economists Jaison Abel and Richard Deitz finds that the benefits of college still tend to outweigh the costs.
Recent Articles
Intermediaries as Information Aggregators: An Application to U.S. Treasury Auctions
In most theories of financial intermediation, intermediaries diversify risk, transform maturity or liquidity, and screen or monitor borrowers. But in U.S. Treasury auctions, none of these rationales apply. The authors explore a new information aggregation model of intermediation to examine current policy questions, such as the optimal number of intermediaries, the effect of non-intermediated bids, and minimum bidding requirements.
By Nina Boyarchenko, David O. Lucca, and Laura Veldkamp, Staff Reports 726, April 2015
Insolvency after the 2005 Bankruptcy Reform
The authors study the effects of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) and find that the reform caused a permanent drop in the Chapter 7 bankruptcy rate, but resulted in a rise in the rate and persistence of insolvency, and a rise in the rate of foreclosure.
By Stefania Albanesi and Jaromir Nosal, Staff Reports 725, April 2015
Watering a Lemon Tree: Heterogeneous Risk Taking and Monetary Policy Transmission
The authors build a general equilibrium model with financial frictions and describe how the quality of overall investment deteriorates in response to monetary stimulus and how this outcome can impede the potential for monetary policy to stimulate the economy.
By Dong Beom Choi, Thomas M. Eisenbach, and Tanju Yorulmazer, Staff Reports 724, April 2015
Nonlinearity and Flight-to-Safety in the Risk-Return Tradeoff for Stocks and Bonds
The authors document an economically and statistically strong nonlinear risk-return tradeoff by estimating the relationship between stock market volatility as measured by the VIX (the Chicago Board Options Exchange Market Volatility Index) and future returns. The nonlinear risk-return tradeoff provides evidence of flight-to-safety from stocks to bonds in times of elevated stock market volatility.
By Tobias Adrian, Richard Crump, and Erik Vogt, Staff Reports 723, April 2015
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