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Economic Research

How Does Credit Access Affect Job-Search Outcomes and Sorting?
How does access to consumer credit affect the job finding behavior of displaced workers? Are these workers looking for jobs at larger and more productive firms? The authors review their recent work that explores these questions and others by building a new data set of individual credit reports merged with administrative earnings data.
By Kyle Herkenhoff and Gordon Phillips
Searching for Higher Job Satisfaction
Moving from one job to another is often discussed as a way that workers pursue higher wages, but little is known about how job satisfaction factors into job search. Using data from the New York Fed’s Survey of Consumer Expectations, the authors document the heterogeneity in job contentment and preferences for various nonwage amenities, and discuss the impact of these preferences on labor market behavior.
By Gizem Kosar, Leo Goldman, and Kyle Smith
Is the Tide Lifting All Boats? A Closer Look at the Earnings Growth Experience of U.S. Workers
The authors focus on the experiences of U.S. workers over the past two decades at different points of the wage distribution and for various demographic groups. Among their findings: although there is some evidence that workers at the bottom of the earnings distribution may be catching up with those at the top, there are indications that returns to higher education may be increasing, with earnings growth for college graduates outpacing those with less education.
By René Chalom, Fatih Karahan, Brendan Moore, and Giorgio Topa
Women Have Been Hit Hard by the Loss of Routine Jobs, Too
Technology and globalization have created new opportunities but have also eliminated millions of good-paying jobs, particularly routine manufacturing jobs. Although attention is most often paid to the loss of blue-collar production jobs for men, the authors show that the combined loss of production and administrative support jobs since 2000 is more than three times as large for prime-age women than prime-age men.
By Jaison R. Abel and Richard Deitz
Introduction to Heterogeneity Series II: Labor Market Outcomes
Although average outcomes serve as important yardsticks for the economy, how outcomes vary across a population is key to understanding the entire picture, as well as the implications for policy. Building on a related Liberty Street Economics series in October, we further explore dimensions of heterogeneity in labor market experience, in four posts publishing tomorrow.
By Rajashri Chakrabarti
Complexity in Large U.S. Banks
Bank size and complexity were identified as determinants of systemic importance following the global financial crisis. The simplification of bank complexity was a policy priority during the post-crisis period. Using a variety of measures of organizational, business, and geographic complexity, the authors show that large U.S. BHCs nonetheless remain very complex.
Linda Goldberg and April Meehl, Economic Policy Review, Volume 26, Number 2, March
How Did the Fed Funds Market Change When Excess Reserves Were Abundant?
The authors describe the functioning of the federal funds market during the recent period of abundant excess reserves that started in 2010 and ended in early 2018. In particular, they show that the very large increase in excess reserves in the period following the 2007-08 financial crisis changed both the types of participants that were active in the fed funds market and their motivations for participating. They also observe that day-to-day volatility in the effective federal funds rate decreased significantly in this period.
John P. McGowan and Ed Nosal, Economic Policy Review, Volume 26, Number 1, March
Uncertainty about Trade Policy Uncertainty
The authors revisit the macroeconomic impact of the recent increase in trade policy uncertainty. As in the literature, they find that high trade policy uncertainty can negatively affect domestic and foreign economic activity. Alternatively, they identify a business sentiment channel—which is separate and distinct from the trade policy uncertainty mechanism—that they believe provides a complementary explanation of the recent developments in U.S. and global economic activities.
Gianluca Benigno and Jan J. J. Groen, Staff Report 919, March 2020
The Market Events of Mid-September 2019
The authors study the mid-September 2019 stress in U.S. money markets: On September 16 and 17, unsecured and secured funding rates spiked and, on September 17, the effective federal funds rate broke the ceiling of the Federal Open Market Committee (FOMC) target range. Their analysis highlights two factors that may have contributed to these events.
Gara Afonso, Marco Cipriani, Adam Copeland, Anna Kovner, Gabriele La Spada, and Antoine Martin, Staff Report 918, March 2020
The Overnight Drift
While much of the literature on globalization has focused on funding markets and cross-border flows, the effect of globalization on trading activity has received relatively little attention. The authors study the 24-hour trading returns on U.S. equity futures, documenting an overnight positive drift in returns accruing around the opening hours of global exchanges.
Nina Boyarchenko, Lars C. Larsen, and Paul Whelan, Staff Report 917, February 2020
Optimal Monetary Policy According to HANK
The authors study optimal monetary policy in a heterogeneous agent New Keynesian economy. When income risk is countercyclical, policy curtails the fall in output in recessions to mitigate the increase in inequality. Their study uncovers a new form of time inconsistency of the Ramsey plan—the temptation to exploit households’ unhedged interest rate exposure to lower inequality.
Sushant Acharya, Edouard Challe, and Keshav Dogra, Staff Report 916, February 2020
Forecasting Macroeconomic Risks
Timely characterizations of risks to the economic outlook play an important role in both economic policy and private sector decisions. The authors introduce a simple method to quantify time-varying risks around macroeconomic forecasts, and use this method to construct probabilistic forecasts for real GDP growth, unemployment, and inflation.
Patrick A. Adams, Tobias Adrian, Nina Boyarchenko, and Domenico Giannone, Staff Report 914, February 2020
The Global Financial Resource Curse
The authors present a model to study the impact of financial integration on global productivity growth. They show that capital flows from developing countries to the United States can generate a global productivity growth slowdown by triggering a fall in economic activity in the U.S. tradable sector—an effect they have dubbed “the global financial resource curse.”
Gianluca Benigno, Luca Fornaro, and Martin Wolf, Staff Report 915, February 2020