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Economic Research

Liberty Street Economics
The Mysterious Slowdown in U.S. Manufacturing Productivity 
The Mysterious Slowdown in U.S. Manufacturing Productivity  Throughout the twentieth century, steady technological and organizational innovations, along with the accumulation of productive capital, increased labor productivity at a steady rate of around 2 percent per year. However, the past two decades have witnessed a slowdown, particularly in the manufacturing sector. While this phenomenon remains puzzling to economists and policymakers, the authors illustrate that the productivity slowdown appears to be pervasive across industries and across firms of various sizes.   
By Danial Lashkari and Jeremy Pearce
On the Distributional Consequences of Responding Aggressively to Inflation
The authors discuss the consequences of an aggressive policy response to inflation using a Heterogeneous Agent New Keynesian (HANK) model. They find that when facing demand shocks, stabilizing inflation and real activity go hand in hand, with very large benefits for households at the bottom of the wealth distribution. Conversely, when facing supply shocks, stabilizing inflation makes real outcomes more volatile, especially for poorer households. Therefore, policy should consider the tradeoffs between stabilizing inflation and economic activity.
By Marco Del Negro, Keshav Dogra, Pranay Gundam, Donggyu Lee, and Brian Pacula
On the Distributional Effects of Inflation and Inflation Stabilization
The authors discuss the distributional effects of inflation and inflation stabilization through the lens of a Heterogeneous Agent New Keynesian (HANK) model. They find that while inflation hurts everyone, it hurts the poor in particular. When the source of inflation is a supply shock, fighting inflation aggressively hurts the poor even more; however, the opposite is true for demand shocks.
By Marco Del Negro, Keshav Dogra, Pranay Gundam, Donggyu Lee, and Brian Pacula
Treasury department
Exploring the TIPS-Treasury Valuation Puzzle
Since the late 1990s, the U.S. Treasury has issued debt in two main forms: nominal bonds, which provide fixed-cash scheduled payments, and Treasury Inflation Protected Securities—or TIPS—which provide the holder with inflation-protected payments that rise with U.S. inflation. The author reviews the theoretical and empirical links between TIPS and treasury yields and explores whether market perceptions of U.S. sovereign credit risk can help explain their relative valuations.
By Guillaume Roussellet
Racial and Ethnic Inequalities in Household Wealth Persist
The authors continue documenting the evolution of wealth inequality and equitable growth gaps between Black, Hispanic, and white households for a variety of assets and liabilities —in this case from the first quarter of 2019 to the fourth quarter of 2023 for a pandemic-era picture. They find that real wealth grew, and that the pace of growth for Black, Hispanic, and white households was very similar across this timeframe—yet gaps across groups persist.
By Rajashri Chakrabarti, Natalia Emanuel, and Ben Lahey
Deciphering the Disinflation Process
U.S. inflation surged in the early post-COVID period, driven by economic shocks such as supply chain disruptions and labor supply constraints. Following its peak at 6.6 percent in September 2022, core consumer price index (CPI) inflation has come down rapidly over the last two years, falling to 3.6 percent recently. The authors argue that the same forces that drove the nonlinear rise in inflation in 2021 have worked in reverse since late 2022, accelerating the disinflationary process.
By Sebastian Heise and Ayşegül Şahin
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
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)

Supplemental Survey Report
(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
Labor market conditions improved slightly for recent college graduates in the second quarter of 2024. The unemployment rate edged down to 4.5 percent and the underemployment rate inched lower to 40.5 percent.
Recent Publications
The Countercyclical Benefits of Regulatory Costs
Legal academics, journalists, and senior executive branch officials alike have assumed that the cost of imposing new regulatory requirements is higher in severe recessions that drive the central bank’s policy rate to zero than in other times. The authors argue that this is not correct; the aggregate output costs of regulatory requirements decrease, not increase, in such recessions.
Alexander Mechanick and Jacob Weber, Staff Report 1109, July 2024
Quantitative Easing and Inequality
The author studies how quantitative easing (QE) affects household welfare across the wealth distribution. He builds a Heterogeneous Agent New Keynesian (HANK) model with household portfolio choice, wage and price rigidities, endogenous unemployment, frictional financial intermediation, an effective lower bound (ELB) on the policy rate, forward guidance, and QE. The author finds that the QE program unambiguously benefited all households by stimulating economic activity; however, it had non-linear distributional effects.
Donggyu Lee, Staff Report 1108, July 2024
Insurance, Weather, and Financial Stability
Global warming will affect risks of bank lending and potentially the stability of the banking sector. The authors introduce a model to study the interaction between insurance and banking, building on the Federal Crop Insurance Act of 1980 -- banks increased lending to the agricultural sector in counties with higher insurance coverage after 1980. They discuss the implications of their results in light of potential changes to insurance availability as a consequence of global warming.
Charles M. Kahn, Ahyan Panjwani, and João A. C. Santos, Staff Report 1107, May 2024
The Financial Consequences of Undiagnosed Memory Disorders
For households with older adults, financial decisions—and the importance of cognitive function to those decisions—are particularly consequential. However, older households are also the most vulnerable to memory disorders such as Alzheimer’s disease. The authors examine the effect of undiagnosed memory disorders on credit outcomes using nationally representative credit reporting data merged with Medicare data. They find that the harmful financial effects of undiagnosed memory disorders exacerbate the financial pressures that these households already face.
Carole Roan Gresenz, Jean M. Mitchell, Belicia Rodriguez, R. Scott Turner, and Wilbert van der Klaauw, Staff Report 1106, May 2024
Wage Insurance for Displaced Workers
The authors study the effects of an innovative policy known as wage insurance, which temporarily subsidizes the earnings of displaced workers whose new job pays less than their old one. They find that wage insurance eligibility increases short-run employment probabilities and leads to higher long-run cumulative earnings. The program's effectiveness primarily results from shorter non-employment spells, which enables workers to avoid the negative consequences of duration-dependent wage offers.
Benjamin Hyman, Brian Kovak, and Adam Leive, Staff Report 1105, May 2024
Tracing Bank Runs in Real Time
Economists still have a limited understanding of how bank runs unfold. The authors offer novel insights on modern bank runs using confidential data on wholesale and retail payments from the bank runs of March 2023. Their findings suggest that these runs were driven by large depositors, rather than many small depositors, and that the banks that survived a run did so by borrowing new funds and then raising deposit rates—not by selling liquid securities.
Marco Cipriani, Thomas M. Eisenbach, and Anna Kovner, Staff Report 1104, May 2024
Can Discount Window Stigma Be Cured? An Experimental Investigation
The Federal Reserve has been operating as a lender of last resort through its “Discount Window” (DW) for more than a century. Because it aims to address liquidity problems before they have systemic consequences, the DW is the Fed’s first line of defense against financial crises. However, the DW has been plagued by stigma, based on concerns that it could be interpreted as a sign of financial weakness. The authors study how such stigma can be cured.
Olivier Armantier and Charles Holt, Staff Report 1103, May 2024
Information and Market Power in DeFi Intermediation
The decentralized nature of blockchain markets has given rise to a complex and highly heterogeneous market structure. The authors introduce the Decentralized Finance (DeFi) intermediation chain and provide theoretical and empirical evidence that private information is the key determinant of intermediation rents. They propose a repeated bargaining model that predicts that the block builder’s share of the surplus is proportional to the value of their private information.
Pablo Azar, Adrian Casillas, and Maryam Farboodi, Staff Report 1102, May 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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