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Economic Research

Liberty Street Economics
Credit, Income, and Inequality
Access to credit helps shape economic opportunities and likely will play a crucial role in helping economies successfully exit from the pandemic doldrums. The ability to get a loan may enable individuals to purchase a home, invest in education, or start a business. But relatively poor individuals may experience credit denial, irrespective of the quality of their investment ideas. The authors describe how banks’ credit decisions affect applicants’ income and its distribution in a developed economy.
By Manthos Delis, Fulvia Fringuellotti, and Steven Ongena
Hold the Check: Overdrafts, Fee Caps, and Financial Inclusion
The 25 percent of low-income Americans without a checking account operate in a separate but unequal financial world. Costly overdrafts rank high among reasons why households “bounce out” of the banking system, and some observers have advocated capping overdraft fees to promote inclusion. The authors find that there are unintended (if predictable) effects of overdraft fee caps. Instead, they recommend increased overdraft credit competition and transparency as alternative paths to cheaper deposit accounts and increased inclusion.
By Jennifer Dlugosz, Brian Melzer, and Donald P. Morgan
Banking the Unbanked: The Past and Future of the Free Checking Account
About one in twenty American households are unbanked or underbanked. The lack of adequate access to financial services not only pushes the unbanked to high-cost alternatives, but it also can hinder access to credit. The roots to part of this problem are historical. The authors look back at changes in regulation, shifts in the ownership structure of retail financial services, and the decline of free low-cost checking in the United States to identify some contributory factors.
By Stein Berre, Kristian Blickle, and Rajashri Chakrabarti
Central Banks and Digital Currencies
Recent developments in payments technology raise important questions about the role of central banks either in providing a digital currency themselves or in supporting the development of digital currencies by private actors. In this post, the authors consider two ways a central bank could choose to become involved with digital currencies and discuss some implications of these potential choices.
By Tobias Adrian, Michael Lee, Tommaso Mancini-Griffoli, and Antoine Martin
Cyberattacks and Supply Chain Disruptions
As cybercrime becomes a greater source of risk for corporations and governments, it is of utmost importance to study the potential effects of severe cyberattacks. In this post, the authors show that certain malicious cyberattacks designed to paralyze IT infrastructures can have devastating effects not only on the directly hit firms, but also on other firms through supply chain linkages.
By Matteo Crosignani, Marco Macchiavelli, and André F. Silva
Research Topics
Center for Microeconomic Data
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.
Weekly Economic Index
This metric, updated on Tuesdays and Thursdays, provides a signal of the state of the U.S. economy based on data reported at a daily or weekly frequency. It represents the common component of ten different series covering consumer behavior, the labor market, and production.
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
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.
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?
Underlying Inflation Gauge (UIG)
The New York Fed Staff UIG measures capture sustained movements in inflation from information contained in a broad set of price, real activity, and financial data. We share estimates and downloadable data on a monthly basis.
Nowcasting Report
Weekly report tracks the evolution of the New York Fed Staff Nowcast of GDP growth and the impact of new macroeconomic data releases on the forecast.
Empire State Manufacturing Survey
Business activity grew at a record-setting pace in New York State, according to firms responding to the July 2021 Empire State Manufacturing Survey.
Business Leaders Survey
Business activity continued to surge in the region’s service sector, according to firms responding to the Federal Reserve Bank of New York’s July 2021 Business Leaders Survey.
Supplemental Survey Report
Supplementary questions in the June 2021 Empire State Manufacturing Survey and Business Leaders Survey focused on how sales compared to normal prepandemic levels, current and desired employment counts, and the extent of recent and expected remote working arrangements.
The Labor Market for Recent College Graduates
Labor market conditions remained challenging for recent college graduates in early 2021, though job prospects continued to improve. The unemployment rate remained elevated, but edged down to 6.4 percent, and the underemployment rate was little changed at 40.3 percent.
Measuring the Natural Rate of Interest
The Laubach-Williams and Holston-Laubach-Williams models provide estimates of the natural rate of interest, or r-star, and related variables for the United States and other advanced economies. We share quarterly estimates as well as the replication code and documentation for both models.
Recent Publications
Reserves Were Not So Ample After All
The Federal Reserve's “balance-sheet normalization"—which reduced aggregate reserves between 2017 and September 2019—increased repo rate distortions, the severity of rate spikes, and intraday payment timing stresses. Normalization culminated with a significant disruption in Treasury repo markets in mid-September 2019. The authors show that repo rates rose above efficient-market levels when the total reserve balances held at the Federal Reserve by the largest repo-active bank holding companies declined, and that repo rate spikes are strongly associated with delayed intraday payments of reserves to these large bank holding companies.
Adam Copeland, Darrell Duffie, and Yilin (David) Yang, Staff Report 974, July 2021
Tough Choices: New Jersey Schools during the Great Recession and Beyond
The authors study school finance patterns in New Jersey over the four years following the Great Recession, a period encompassing a severe economic downturn, an influx of federal stimulus funding, and the funding’s eventual depletion. Understanding the effects of the Great Recession on school finances is essential from policy, social, and scholarly perspectives. It is all the more relevant since the findings can provide unique insight into the possible effects of the current recession driven by the COVID-19 pandemic on school finances.
Rajashri Chakrabarti and Max Livingston, Economic Policy Review, July 2021
Who Pays the Price? Overdraft Fee Ceilings and the Unbanked
Nearly 25 percent of low-income households in the United States are unbanked—high fees are often cited as a reason. The authors use the federal preemption of state limits on overdraft fees to study the impact of fee ceilings on low-income households. They find that after preemption, the share of low-income households that are unbanked decreases, consistent with price ceilings causing the rationing of both overdraft and banking services.
Jennifer L. Dlugosz, Brian T. Melzer, and Donald P. Morgan, Staff Report 973, June 2021
U.S. Monetary Policy Spillovers to Emerging Markets: Both Shocks and Vulnerabilities Matter
The authors explore the interaction of sources of policy changes and country vulnerabilities in shaping how shifts in U.S. monetary policy transmit to foreign economies in a New Keynesian DSGE model. They show that higher U.S. interest rates arising from stronger U.S. demand generate modestly positive spillovers to output in economies with stronger fundamentals but can be detrimental for vulnerable emerging market economies due to tightening of their financial conditions.
Shaghil Ahmed, Ozge Akinci, and Albert Queralto, Staff Report 972, June 2021
Interest, Reserves, and Prices
The authors have proposed a new framework for monetary policy analysis that encompasses, as a special case, the Neo-Wicksellian paradigm. A general form of an aggregate-demand equation reveals a role for liquidity, as well as less effective movements in future real rates with respect to current ones, in stimulating aggregate demand. The quantity of reserves and their interest rate both matter for determining inflation and economic activity.
Gianluca Benigno and Pierpaolo Benigno, Staff Report 971, June 2021
Combinatorial Growth with Physical Constraints: Evidence from Electronic Miniaturization
Although the effect of the increasing quality of computers and electronics on GDP has been widely studied, the question of how electronic miniaturization affects economic growth has not been explored. To quantify the effect of electronic miniaturization on GDP, this paper builds an economic growth model that incorporates physical constraints on firms' production sets. Using a new data set of product weights and sizes, the author tests the predictions of the model and shows that Moore's Law accounts for approximately 3.5 percent of all productivity growth in the 1982-2007 period, and for 37.5 percent of the productivity growth in heavy manufacturing industries.
Pablo Azar, Staff Report 970, May 2021
The Value of Internal Sources of Funding Liquidity: U.S. Broker-Dealers and the Financial Crisis
The authors use confidential and novel data to measure the benefit to broker-dealers of being affiliated with a bank holding company and the resulting access to internal sources of funding. They compare the balance sheets of broker-dealers that are associated with bank holding companies to those that are not and find that the latter dramatically restructured their balance sheets during the 2007-9 financial crisis, pivoting away from trading illiquid assets and toward more liquid government securities.
Cecilia Caglio, Adam Copeland, and Antoine Martin, Staff Report 969, May 2021
U.S. Market Concentration and Import Competition
An increase in the concentration among domestic firms in the United States has raised concerns of increasing market power. Using confidential census data for the manufacturing sector, the authors show that typical measures of concentration, once adjusted for sales by foreign exporters, actually stayed constant between 1992 and 2012. They reconcile these findings by linking part of the increase in domestic concentration to import competition. Although concentration among U.S.-based firms rose, the growth of foreign firms, mostly at the bottom of the sales distribution, counteracted this increase.
Mary Amiti and Sebastian Heise, Staff Report 968, May 2021
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