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Economic Research

Recent Publications
Beyond Thirty: Treasury Issuance of Long-Term Bonds from 1953 to 1965

Thirty years has marked the outer limit of Treasury bond maturities ever since the emergence of regular and predictable issuance of coupon-bearing Treasury debt in the 1970s. However, seven longer-term bonds, including one with a forty-year maturity, were issued between 1955 and 1963. The author examines the circumstances that led to the issuance of those seven bonds.

By Kenneth D. Garbade, Staff Reports 806, January 2017 

The Time-Varying Price of Financial Intermediation in the Mortgage Market

For most mortgage transactions in the United States, intermediaries connect borrowers with capital market investors through the market for mortgage-backed securities. The authors show that during the 2008-14 period the price of intermediation was high and volatile. They explore the drivers of this variation and study its implications for the pass-through of monetary policy.

By Andreas Fuster, Stephanie H. Lo, and Paul S. Willen, Staff Reports 805, January 2017
Financial Vulnerability and Monetary Policy
The authors show that a classic Taylor rule exacerbates downside risk of GDP growth relative to an optimal Taylor rule, thus generating welfare losses associated with negative skewness of GDP growth.
By Tobias Adrian and Fernando Duarte, Staff Reports 804, December 2016
Dealer Balance Sheets and Bond Liquidity Provision
Do regulations decrease dealer incentives to intermediate trades? Using a unique data set of bond transactions linked to the balance sheets of individual institutions, the authors study the relationship between corporate bond market liquidity and dealer balance sheets, and track how this relationship changes over time.
By Tobias Adrian, Nina Boyarchenko, and Or Shachar, Staff Reports 803, December 2016
Credit Spreads, Financial Crises, and Macroprudential Policy
The authors have developed a model with banks that face occasionally binding leverage constraints, and in which bank’s equity interest is endogenous. In the model, they find that macroprudential policy designed to enhance the incentive for banks to issue equity lowers the probability of a financial crisis and increases welfare.
By Ozge Akinci and Albert Queralto, Staff Reports 802, November 2016
Cross-Border Prudential Policy Spillovers: How Much? How Important?
In a multi-study initiative of the International Banking Research Network (IBRN), researchers from fifteen central banks and two international organizations use micro-banking data—in conjunction with a novel data set of prudential instruments—to study international spillovers of prudential policy changes for bank lending growth.
By Claudia M. Buch and Linda Goldberg, Staff Reports 801, November 2016
An Overview of the Survey of Consumer Expectations
Consumer expectations about economic outcomes are increasingly useful inputs into forecasting models. The authors present an overview of the New York Fed’s Survey of Consumer Expectations, which collects timely information on a wide variety of household expectations regarding inflation, the labor market, and U.S. economic conditions overall.
By Olivier Armantier, Giorgio Topa, Wilbert van der Klaauw, and Basit Zafar, Staff Reports 800, November 2016