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Economic Research

Liberty Street Economics
How the Fed Changes the Size of Its Balance Sheet: The Case of Mortgage-Backed Securities
Our bloggers continue their examination of the Federal Reserve’s balance sheet by focusing on transactions involving agency mortgage-backed securities (MBS). In particular, they review what happens when households pay down their mortgages, either through regular monthly amortizations or a large payment covering some or all of the outstanding balance, as might occur with a refinancing.
By Deborah Leonard, Antoine Martin, Simon Potter, and Brett Rose
How the Fed Changes the Size of Its Balance Sheet
How do asset purchases increase the size of the Federal Reserve’s balance sheet? And how would reducing reinvestments decrease the size of the balance sheet? Our bloggers answer these questions by describing the mechanics of the Fed’s balance sheet.
By Deborah Leonard, Antoine Martin, and Simon Potter
Low Productivity Growth: The Capital Formation Link
Many factors have contributed to the pronounced slowdown of growth in labor productivity. The complex set of forces affecting productivity has made projecting its medium-term trend problematic. Still, data suggest that capital formation has played a role and the odds of a rebound in productivity are reduced if the weakness in investment spending continues.
By Richard Peach and Charles Steindel
Just Released: Updated SOMA Portfolio and Income Projections
The Federal Reserve Bank of New York’s Markets Group presents updated staff projections for the future path of domestic securities held in the System Open Market Account (SOMA) and portfolio-related income. The updated projection scenarios are provided as a tool for the public to further understand factors affecting the evolution of the Federal Reserve’s balance sheet.
Michael Fleming, Gabriel Herman, Deborah Leonard, Dave Na, and Lisa Stowe
Market Liquidity after the Financial Crisis
Our bloggers update their work on the possible adverse effects of regulation on market liquidity in the period following the financial crisis. They find that dealer balance sheets have continued to stagnate and that funding liquidity is less abundant, but they do not uncover any clear evidence of a widespread deterioration in market liquidity.
By Tobias Adrian, Michael Fleming, and Or Shachar
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Nowcasting Report
Weekly report tracks the evolution of the FRBNY Staff Nowcast of GDP growth and the impact of new macroeconomic data releases on the forecast.
Oil Price Dynamics Report
Our oil price decomposition, reported weekly, examines what’s behind recent fluctuations in oil prices: demand factors, supply factors, or some combination of the two?
The Labor Market for Recent College Graduates
Labor market conditions were little changed for recent college graduates during the first quarter of 2017. The unemployment rate held steady at 4.0 percent, while the underemployment rate edged up slightly to 43.7 percent.
Business Leaders Survey
Activity in the region’s service sector showed little change, according to firms responding to the July Survey.
Supplemental Survey Report
In a series of supplementary questions to the June 2017 Empire State Manufacturing Survey and Business Leaders Survey, businesses were asked how much their sales, employment levels, and capital spending had changed between the first half of 2016 and the first half of 2017.
U.S. Economy in a Snapshot
U.S. Economy in a Snapshot is a monthly presentation designed to give you a quick and accessible look at developments in the economy.
Empire State Manufacturing Survey
Business activity grew modestly in New York State, according to firms responding to the July 2017 Empire State Manufacturing Survey.
Recent Publications
Echoes of Rising Tuition in Students’ Borrowing, Educational Attainment, and Homeownership in Post-Recession America
This study examines how the rapid increase in college costs has affected the debt level, educational attainment, and post-schooling consumption of recent student cohorts. The authors’ findings are consistent with students having accommodated large positive shocks to college costs not by forgoing schooling, but instead by amassing substantially more student debt. Further analysis demonstrates how the tuition hike and additional debt affected the homeownership rate of the sample cohorts.
By Zachary Bleemer, Meta Brown, Donghoon Lee, Katherine Strair, and Wilbert van der Klaauw, Staff Reports 820, July 2017
The Shifting Drivers of Global Liquidity
The authors document important changes in the sensitivity of the main components of global liquidity—cross-border bank loans and international debt securities—to global factors. One key finding: Advanced-economy monetary policy became a more potent driver of both cross-border loan and international bond flows following the global financial crisis.
By Stefan Avdjiev, Leonardo Gambacorta, Linda S. Goldberg, and Stefano Schiaffi, Staff Reports 819, June 2017
Supply- and Demand-Side Factors in Global Banking
The authors employ a methodology that offers an exact decomposition of the growth in international bank credit into supply, demand, and common shocks for the period 2000-16. By decomposing bilateral growth rates, policymakers can quickly ascertain whether rapid increases or decreases in credit to a particular country are driven by systematic changes in the balance sheets of that country’s key creditor banking systems (supply shocks), or whether they are idiosyncratic for that country (demand shocks).
By Mary Amiti, Patrick McGuire, and David E. Weinstein, Staff Reports 818, June 2017
How Did China’s WTO Entry Benefit U.S. Consumers?
In this paper, the authors quantify the effect of China’s 2001 entry into the World Trade Organization on U.S. consumers. They find that China’s entry drove down the U.S. price index of manufactured goods by 7.6 percent—a decline that averaged about 1 percent annually between 2000 and 2006. The results show that most of the effect on the index is due to China’s reduction of its own input tariffs.
By Mary Amiti, Mi Dai, Robert C. Feenstra, and John Romalis, Staff Reports 817, June 2017
Access to Credit and Financial Health: Evaluating the Impact of Debt Collection

The authors analyze the effect of debt collection practices on both consumer credit and indicators of financial health.  They find consistent evidence that restricting collection activities leads to a decrease in access to credit and to a deterioration in indicators of financial health—including a rise in delinquent balances and decrease in credit scores.

By Julia Fonseca, Katherine Strair, and Basit Zafar, Staff Reports 814, May 2017
Investors’ Appetite for Money-Like Assets: The Money Market Fund Industry after the 2014 Regulatory Reform
The authors document the reaction of money market fund (MMF) investors and portfolio managers to a new SEC regulation that came into effect in October 2016. They attribute differences in behavior—compared with past outflows from prime and muni MMFs—to investors’ appetite for money-like assets, whose supply was impacted by the new regulation, as opposed to traditional flight-to-safety motives.
By Marco Cipriani, Gabriele La Spada, and Philip Mulder, Staff Reports 816, June 2017
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