Tweets by @NYFedResearch

Economic Research

At the New York Fed: Seventh Annual Conference on the U.S. Treasury Market
The New York Fed recently hosted the seventh annual U.S. Treasury Market Conference. The agenda featured panels on the effects of sudden changes in investor positioning and on proposals to strengthen Treasury market resiliency and improve market intermediation, from various public and private sector perspectives. Speeches touched on recommendations from a recent progress report by the Inter-Agency Working Group for Treasury Market Surveillance and efforts to improve market resilience by reforming market structure and regulation.
By Michael Fleming, Frank Keane, and Daniel Weitz
Preemptive Runs and the Offshore U.S. Dollar Money Market Funds Industry
In March 2020, U.S. dollar-denominated prime money market funds (MMFs) suffered heavy outflows as concerns about the COVID-19 pandemic increased in the United States and Europe. Investors redeemed their shares en masse. The authors use differences in the regulatory regimes of domestic and offshore funds to identify the impact of the redemption gates and liquidity fees recently introduced as part of MMF industry reforms in both the United States and Europe.
By Marco Cipriani and Gabriele La Spada
The Role of Educational Attainment in Household Debt and Delinquency Disparities
In this third and final post in a series exploring disparities in household debt outcomes, the authors aim to understand some of the mechanisms behind racial and gender disparities, and examine the role of educational attainment in explaining these patterns.
By Ruchi Avtar, Rajashri Chakrabarti, and Kasey Chatterji-Len
Unequal Distribution of Delinquencies by Gender, Race, and Education
This post continues a three-part series exploring differences in household debt outcomes by gender, race, and education. Here the authors investigate gender and racial disparities in delinquencies across various kinds of consumer debt—namely auto, mortgage, and credit card debt and student loans.
By Ruchi Avtar, Rajashri Chakrabarti, and Kasey Chatterji-Len
Uneven Distribution of Household Debt by Gender, Race, and Education
Although the aggregate volume of household debt has been well-documented, literature on the distribution of debt by gender, race, and education is lacking, largely because of an absence of adequate data that combine debt, demographic, and education information. In a three-part series beginning with this post, the authors seek to bridge this gap. In this first post, they focus on differences in debt-holding behavior across race and gender.
By Ruchi Avtar, Rajashri Chakrabarti, and Kasey Chatterji-Len
Financial Transaction Taxes and the Informational Efficiency of Financial Markets: A Structural Estimation
The authors develop a new methodology to estimate the impact of a financial transaction tax (FTT) on financial market outcomes. In their sequential trading model, both noise traders and informed traders are price-elastic. The authors estimate the model through maximum likelihood for a sample of sixty New York Stock Exchange stocks in 2017. They find that an FTT increases the proportion of informed trading and improves information aggregation, but lowers trading volume and welfare.
Marco Cipriani, Antonio Guarino, and Andreas Uthemann, Staff Report 993, November 2021
Why Do Supervisors Rate Banking Organizations?
Supervisors of banking organizations periodically summarize their views of a banking organization into a confidential assessment or rating—essentially, a grade for the organization’s safety and soundness and compliance with law. The authors believe there is considerable complexity and nuance incorporated in the concept of rating banking organizations and that it warrants a rigorous discussion of why supervisors assign ratings and how they advance the statutory and regulatory goals of supervision.
James Bergin and Kevin Stiroh, Economic Policy Review, Volume 27, Number 3
The Term Structure of Expectations
Economic theory predicts that intertemporal decisions depend critically on expectations about future outcomes. Using the universe of professional survey forecasts for the United States, the authors document the behavior of the entire term structure of expectations for output growth, inflation, and the policy rate. They show that a simple unobserved components model of the trend and cycle explains the joint behavior of both consensus measures of expectations and the observed disagreement among individual forecasters.
Richard K. Crump, Stefano Eusepi, Emanuel Moench, and Bruce Preston, Staff Report 992, November 2021
Understanding the Linkages between Climate Change and Inequality in the United States
The authors present a literature review of existing evidence on mechanisms by which climate change can affect economic inequality in the United States. First, they review whether risks from climate change affect populations and regions differently. Second, they consider whether institutions and policies around climate risk may have differential effects in different regions and on different communities. Finally, they identify open questions and gaps in the literature that could benefit from additional exploration and research.
Ruchi Avtar, Kristian Blickle, Rajashri Chakrabarti, Janavi Janakiraman, and Maxim Pinkovskiy, Staff Report 991, November 2021
How Bad Are Weather Disasters for Banks?
The authors find that over the last quarter century, weather disasters had insignificant or small effects on the performance of U.S. banks. This stability seems endogenous rather than a mere reflection of federal aid. Disasters increase loan demand, which offsets losses, and actually boosts profits at larger banks. Local banks tend to avoid mortgage lending in areas where floods are more common than official flood maps would predict, suggesting local knowledge may also mitigate disaster impacts.
Kristian S. Blickle, Sarah N. Hamerling, and Donald P. Morgan, Staff Report 990, November 2021
The Real Consequences of Macroprudential FX Regulations
The author examines whether macroprudential foreign exchange (FX) regulations imposed on financial intermediaries have real effects on nonfinancial sectors. Specifically, the author studies how a regulation that limits bank ratios of FX derivative (FXD) positions to equity capital affects the supply of FXD and firm exports. By exploiting a natural experiment in South Korea at the bank level that can be traced through firms, the author shows that the regulation caused a reduction in the supply of FXD and, in turn, induced firms to reduce exports.
Hyeyoon Jung, Staff Report 989, October 2021
The Option Value of Municipal Liquidity: Evidence from Federal Lending Cutoffs during COVID-19
The authors estimate the option value of municipal liquidity by studying bond market activity and public sector hiring decisions when government budgets are severely distressed. Using a regression discontinuity design, they exploit lending eligibility population cutoffs introduced by the federal sector’s Municipal Liquidity Facility (MLF) to study the effects of an emergency liquidity option on yields, primary debt issuance, and public sector employment.
Andrew Haughwout, Benjamin Hyman, and Or Shachar, Staff Report 988, October 2021
The Heterogeneous Impact of Referrals on Labor Market Outcomes
The authors document a new set of facts on the impact of referrals on labor market outcomes, using a novel data set that enables them to distinguish between different types of referrals and different occupations. They develop an on-the-job search model that incorporates referrals, and calibrate it to key moments in the data. The calibrated model yields new insights into the roles played by different types of referrals in the match formation process, and provides quantitative estimates of the effects of referrals on employment, earnings, output, and inequality.
Benjamin Lester, David A. Rivers, and Giorgio Topa, Staff Report 987, October 2021
By continuing to use our site, you agree to our Terms of Use and Privacy Statement. You can learn more about how we use cookies by reviewing our Privacy Statement.   Close