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Economic Research

Research Topics
SCE Housing Survey—2015
Our 2015 survey finds U.S. households remain broadly optimistic about the housing market. Most renters report that they would rather own than rent if they had the necessary financial resources. As in last year’s survey, a majority believe that it would be difficult to obtain a mortgage, although responses suggest a slight easing in perceived credit access.
Recent Articles
Personal Experiences and Expectations about Aggregate Outcomes
Kuchler and Zafar use novel survey data to estimate how personal experiences affect household expectations about aggregate economic outcomes in housing and labor markets. The authors’ results suggest that respondents extrapolate from their own recent experience in the given domain when forming expectations about aggregates

By Theresa Kuchler and Basit Zafar, Staff Reports 748, October 2015

Wealth, Tastes, and Entrepreneurial Choice
The authors study a population with varying entrepreneurial tastes and levels of wealth in a simple general equilibrium model of occupational choice and show that non-monetary compensation is particularly relevant in discussions of small businesses.

By Erik G. Hurst and Benjamin W. Pugsley, Staff Reports 747, October 2015

The Great Recession’s Impact on School District Finances in New York State
An analysis of school financing in New York State from 2004 to 2010 finds that total funding and expenditures were maintained in line with pre-recession trends, but that the composition of each changed in significant ways. On the funding side, the federal stimulus offset cuts in local and, especially, state financing. On the expenditure side, instructional spending was maintained on trend while noninstructional spending—transportation, activities, utilities—suffered.
By Rajashri Chakrabarti, Max Livingston, and Elizabeth Setren, Economic Policy Review
The Affordable Care Act and the Labor Market: A First Look
Pinkovskiy considers changes in labor markets across U.S. states and counties subsequent to the enactment of the Affordable Care Act (ACA) in 2010 and its implementation in 2014. He finds that counties with large fractions of uninsured before the enactment or the implementation of the ACA experienced more rapid employment and salary growth than did counties with smaller fractions of people uninsured, after both the enactment and implementation of the ACA.

By Maxim Pinkovskiy, Staff Reports 746, October 2015

An Interest Rate Rule to Uniquely Implement the Optimal Equilibrium in a Liquidity Trap
Short-term nominal interest rates in many developed economies—including Japan, the United States, and Europe—have by now been against their effective zero lower bound (ZLB) for several years, with liftoff from the ZLB unlikely in the near future. In this paper, the authors put forth a new class of interest rate rules for an economy in a liquidity trap (that is, a time in which the natural rate of interest is negative).

By Fernando Duarte and Anna Zabai, Staff Reports 745, October 2015

Evaluating the Information in the Federal Reserve Stress Tests
As the annual supervisory stress test processes have evolved, the Federal Reserve has provided increasingly detailed public disclosures about the tests’ results and implications. This paper evaluates how the publication of this official sector analysis affects private investors’ assessments of the tested bank holding companies’ values.

By Mark Flannery, Beverly Hirtle, and Anna Kovner, Staff Reports 744, October 2015