The Center for Microeconomic Data serves to centralize the collection, acquisition, and analysis of microeconomic data at the New York Fed and act as a catalyst for microeconomic research by promoting engagement with the larger academic community. The wide-ranging data, research, and analysis produced by CMD researchers provide insight into individual-level financial and nonfinancial economic conditions, expectations, and behavior in the United States.
Central banks, particularly the Federal Reserve, are well-known for macroeconomic analysis that bears a clear connection to their monetary policy and financial stability missions. But there are several reasons for microeconomic data and research to also play a prominent role in support of Fed policymaking.
Perhaps most fundamentally, macroeconomic and financial market developments are determined by the decisions of many millions of individual actors—businesses, households and governments—and these individual decisions are often best analyzed using the theoretical and empirical methods of microeconomics. Microeconomics emphasizes and tries to understand heterogeneity, which can often be crucial in real-world policymaking and implementation. Microeconomic data and their analyses are therefore increasingly seen as essential supplements to macroeconomic data-based analyses.
The information required for effective macroeconomic analysis and policymaking is also often incomplete or imperfect. Advances in data collection and storage enable, and help support, new kinds of analysis that had previously been impossible. Microeconomists’ understanding of how to construct data sets that are useful for both macro- and micro-analysis can be a critical resource for answering questions and shedding light on aspects of the economy that have remained opaque until now. This is well illustrated by the two large data collection projects that anchor the Center of Microeconomic Data: New York Fed Consumer Credit Panel and Survey of Consumer Expectations. While the former provides rich, granular, and high frequency data on household debt and credit conditions in the United States, the latter provides a monthly picture of consumers’ perceptions and expectations on a host of economic outcomes and decisions.
Finally, microeconomic research emphasizes the particular characteristics of agents, institutions, and markets. Detailed understanding of specific parts of the economy—for example the housing market—can be an invaluable resource in understanding and putting into appropriate context crucial developments as they unfold.