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Economic Research

Liberty Street Economics
Using Stock Returns to Assess the Aggregate Effect of the U.S.-China Trade War
Estimating the aggregate impact of the U.S.-China trade war on the U.S. economy is challenging because tariffs can affect the economy through many different channels. In addition to changing relative prices, tariffs can impact productivity and economic uncertainty. Using financial market data, the authors suggest that the trade war between the U.S. and China from 2018 to 2019 had a negative effect on the U.S. economy that was substantially larger than past estimates.
By Mary Amiti, Matthieu Gomez, Sang Hoon Kong, and David E. Weinstein
Why Do Banks Fail? The Predictability of Bank Failures
The authors document that bank failures are remarkably predictable based on simple accounting metrics from publicly available financial statements that measure a bank’s insolvency risk and funding vulnerabilities. They also find that the likelihood of future failure is significantly higher for banks with lower solvency and a greater reliance on expensive and risk-sensitive sources of funding.
By Sergio Correia, Stephan Luck, and Emil Verner
Why Do Banks Fail? Three Facts About Failing Banks
Why do banks fail? The authors study more than 5,000 bank failures in the U.S. from 1865 to the present to understand whether failures are primarily caused by bank runs or by deteriorating solvency. They document that failing banks are characterized by rising asset losses, deteriorating solvency, and an increasing reliance on expensive noncore funding. They also find that problems in failing banks are often the consequence of rapid asset growth in the preceding decade.
By Sergio Correia, Stephan Luck, and Emil Verner
Why Investment-Led Growth Lowers Chinese Living Standards
Rapid GDP growth has raised China out of poverty and into middle-income status, but progress in raising living standards has lagged as a side-effect of policies favoring investment over consumption. The author quantifies China's consumption prospects through the lens of the neoclassical growth model, finding that shifting the country's production mix toward consumption would raise both current and future Chinese living standards.
By Matthew Higgins
Income Growth Outpaces Household Borrowing
Household debt balances grew by $147 billion over the third quarter of 2024, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. Are rising aggregate debt burdens sustainable? Or is the expansion expected and normal given increases in aggregate income and population size? The authors examine debt balances scaled by income, and how this has evolved over the past twenty-five years.
By Andrew Haughwout, Donghoon Lee, Daniel Mangrum, Joelle W. Scally, and Wilbert van der Klaauw
Banking System Vulnerability: 2024 Update
After a period of relative stability, a series of bank failures in 2023 renewed questions about the fragility of the banking system. The authors provide an update of four analytical models aimed at capturing different aspects of U.S. banking system vulnerability. Using data through the second quarter of 2024, the authors discuss how these measures have changed.
By Matteo Crosignani, Thomas Eisenbach, and Fulvia Fringuellotti
Recruiting Opportunities
Kartik Athreya PHD
Joining the New York Fed as a Research Economist
The New York Fed is looking for new Ph.D.s and experienced economists to join its Research Group. We are now accepting applications for Ph.D. positions with a summer–fall 2025 start date.
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)

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
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.
Decorative Image - variety of polaroid portraits of diverse group of people
Equitable Growth Indicators (EGIs)   
A measure of disparities across four economic outcomes—inflation, real and nominal earnings, employment, and real and nominal consumer spending.
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
The labor market for recent college graduates weakened somewhat in the third quarter of 2024. The unemployment rate ticked up to 5.3 percent, while the underemployment rate held steady at around 40.6 percent.
Recent Publications
Corporate Debt Structure over the Global Credit Cycle
The authors study the determinants of prepayment at the instrument level for a large cross-section of firms around the world, how such prepayment affects firm-level debt structure, and how global credit conditions affect the ability and willingness of firms to refinance their debt early. Their results show that the impact of global credit conditions on firms' debt structure can be traced back to how instrument-level prepayment incentives change over the global credit cycle.
Nina Boyarchenko and Leonardo Elias, Staff Report 1139, December 2024
The Long-Term Rise of Labor Market Detachment: Evidence from Local Labor Markets
The authors develop a measure of chronic joblessness in the United States—termed the detachment rate—that identifies those who have been out of the labor force for more than a year. They show that the detachment rate doubled for prime-age men since the early 1980s and rose by a quarter for prime-age women since 2000. The rate increased more in places with weak local economies, particularly those with job loss due to globalization and technological change.
Jaison R. Abel and Richard Deitz, Staff Report 1138, November 2024
Discount Window Stigma After the Global Financial Crisis
The authors study Discount Window (DW) stigma, the reluctance to access the Federal Reserve’s lender-of-last-resort facility, between 2014 and 2024. Despite increased usage since 2020, they find conclusive evidence that the DW is stigmatized, especially among smaller banks and when financial markets experience disruptions. The authors also identify new determinants and consequences of DW stigma and discuss the implications for the provision of emergency liquidity.
Olivier Armantier, Marco Cipriani, and Asani Sarkar, Staff Report 1137, November 2024
The Financial Stability Implications of Digital Assets
In recent years, financial activity associated with digital assets has grown significantly, with periods of exponential growth and multiple precipitous crashes. The authors consider the potential vulnerabilities associated with the digital asset ecosystem. They argue that while the contribution of digital assets to system risk has been limited to date, the observed fragilities in the digital asset space could destabilize the broader financial system if the digital ecosystem becomes more systemic.
Pablo D. Azar, Garth Baughman, Francesca Carapella, Jacob Gerszten, Arazi Lubis, J.P. Perez-Sangimino, David E. Rappoport, Chiara Scotti, Nathan Swem, Alexandros P. Vardoulakis, and Aurite Werman, Economic Policy Review 30, no. 2, November 2024
Firms’ Supply Chain Adaptation to Carbon Taxes
The authors provide evidence on how firms’ supply chain decisions adapt in response to carbon taxes. By constructing a novel dataset using information from the European Union’s Emissions Trading System (EU ETS) and Carbon Border Adjustment Mechanism, they demonstrate that French firms modified their sourcing of dirty products as the EU ETS tightened. Specifically, firms increased imports from non-ETS countries, leading to carbon leakage both in terms of trade shares and at the extensive margin, as the firms established new supply relationships with dirty non-ETS foreign producers.
Pierre Coster, Julian di Giovanni, and Isabelle Mejean, Staff Report 1136, November 2024
Clustering in Natural Disaster Losses
Economists have primarily studied the effects of natural disasters using county-by-month level datasets, which requires implicitly assuming that losses from natural disasters are independently distributed across space and time. On the other hand, the climate science literature finds consistent evidence of clustering in natural disaster occurrences, where disasters tend to be concentrated either in certain regions or in short windows of time. This paper introduces the concept of natural disaster clustering to the economics literature.
Jacob Kim-Sherman and Lee Seltzer, Staff Report 1135, November 2024
Who Collaborates with the Soviets? Financial Distress and Technology Transfer During the Great Depression
The authors investigate the factors that drive domestic firms to sign technology transfer agreements (TTAs) and sell their technology to foreigners. By studying the agreements signed between U.S. firms and the Soviet Union during the 1920s and 1930s, they find that both local financial distress and cultural affinity with the foreign, receiving country make it more likely that firms will sign TTAs.
Jerry Jiang and Jacob P. Weber, Staff Report 1134, November 2024
A Jackknife Variance Estimator for Panel Regressions
Panel data models are often characterized by strong cross-sectional and time-series dependence. Typical applications, such as panels of states or countries, feature time series behavior which is, at least partially, driven by common components. The authors introduce a new jackknife variance estimator for panel-data regressions. They prove the asymptotic validity of their variance estimator and demonstrate desirable finite-sample properties in a series of simulation experiments.
Richard K. Crump, Nikolay Gospodinov, and Ignacio Lopez Gaffney, Staff Report 1133, October 2024
RESEARCH SERIES
Economic Inequality
This ongoing Liberty Street Economics series analyzes disparities in economic and policy outcomes by race, gender, age, region, income, and other factors.
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