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Liberty Street Economics features insight and analysis from economists working at the intersection of research and Fed policymaking.
The views expressed are those of the authors, and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.
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February 24, 2012

Historical Echoes: American Consumerism, Then and Now, with Product Timeline

Amy Farber, New York Fed Research Library

A paper by Delia Cabe, “Buying into the Future,” which appeared in the fall 2001 Radcliffe Quarterly, tells in an arresting way the story of how Americans became such big spenders. The article displays, at the bottom of each page, a timeline of first appearances of products in the American marketplace. Many iconic products originated much earlier than we might guess: Crayola Crayons (1903), Slinky (1945), Frisbee (1948), and so on.

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February 22, 2012

A “Homes for Heroes” Tax Credit

Richard Peach

Over the next few years, large volumes of homes are likely to flow from foreclosure onto lenders’ balance sheets as “real estate owned,” or REO. Without a significant boost to demand, this large volume of “distressed” real estate could potentially put substantial downward pressure on home prices. Accordingly, new policy initiatives are needed to increase the rate at which properties that flow into REO get reabsorbed back into use as renter- or owner-occupied units. In this post, I make the case for a “Homes for Heroes” tax credit.

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February 17, 2012

Historical Echoes: Anthropomorphism in the Service of Child and Adult Financial Education

Amy Farber, New York Fed Research Library

Everything seems to be anthropomorphized at one time or another—especially in advertising, where one needs to get a point across simply and memorably. So it’s not surprising that the idea has been used in financial education for children.

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February 15, 2012

Just Released: February’s Empire State Manufacturing Survey Signals a Further Pickup

Jason Bram and Richard Deitz

February’s Empire State Manufacturing Survey (ESMS) indicates that manufacturing activity in New York State continued to expand for a third consecutive month. The survey’s headline index rose an encouraging six points to 19.5, its highest level in more than a year. Other indicators in the report show steady growth in orders, shipments, and employment, and fairly widespread planned increases in capital spending. In this post, we take a closer look at the recent results of the survey, which indicate that growth in New York’s manufacturing sector has rebounded in recent months from its decline during the summer and fall of 2011.

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The Dodd-Frank Act’s Potential Effects on the Credit Rating Industry

James Vickery

Credit rating agencies have been widely criticized in recent years for the poor performance of their ratings on mortgage-backed securities (MBS) and other structured-finance bonds. In response to the concerns of investors and other market participants, the 2010 Dodd-Frank Act incorporates a range of reforms likely to significantly reshape the rating industry. In this post, we discuss these reforms and their implications for investors, regulators, and the rating agencies themselves.

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February 13, 2012

How Colleges and Universities Can Help Their Local Economies

Jaison R. Abel and Richard Deitz

Policymakers are increasingly viewing colleges and universities as important engines of growth for their local areas. In addition to having direct economic impacts, these institutions help to raise the skills of an area’s workforce (its local “human capital”), and they do this in two ways. First, by educating potential workers, they increase the supply of human capital in a region. Perhaps less obviously, these schools can also raise a region’s demand for human capital by helping local businesses create jobs for skilled workers. In this post, we draw on our recent academic research and Current Issues article to outline these pathways and how they might inform local economic development policy. (We also discuss our findings in a new video.)

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February 10, 2012

Historical Echoes: Return to Jekyll Island (Not The Creature from)

Amy Farber, New York Fed Research Library

On November 5-6, 2010, the Federal Reserve Bank of Atlanta and Rutgers University cosponsored a conference titled “A Return to Jekyll Island: The Origins, History, and Future of the Federal Reserve.” It took place at the Jekyll Island Club Hotel on Jekyll Island, Georgia—the same location as the historic meeting that led to the Federal Reserve Act of 1913. A five-minute film called “Jekyll Island and the Creation of the Federal Reserve” tells the story with riveting still images of the participants and setting.

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February 08, 2012

Do Payday Lenders Target Minorities?

Donald P. Morgan and Kevin J. Pan

Payday lenders make small, short-term loans to millions of households across the country. Though popular with users, the credit is controversial in part because payday lenders are accused of targeting their seemingly high-priced credit at minority households. In this post, we look at whether black and Hispanic households are in fact more likely to use payday credit. We find that, unconditionally, they are, but once we control for financial characteristics—such as past delinquency, debt-to-income ratios, and credit availability, blacks and Hispanics are not significantly more likely than whites to use payday credit.

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February 06, 2012

How Has the Business of International Banking Changed?

Linda Goldberg

In this post, I focus on the broad historical progression of international banking activity. This broad progression serves as a backdrop for a range of other discussions and posts on global banking, on issues such as foreign banking organizations’ use of liquidity facilities in the United States and the role of banks in international risk-sharing and international transmission of shocks. It also helps explain the policy regimes in place through recent financial crises and even some of the data gaps that regulators and researchers have encountered.


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February 03, 2012

Historical Echoes: When Pigskins Fly – the Super Bowl and Other “Predictors”

Mary Tao, New York Fed Research Library

More than three decades ago, Robert Stovall, a money manager, championed a theory put forth by a sports columnist. Stovall studied the performance of stock indexes after each Super Bowl and concluded that the winner could predict stock market trends. For fifteen consecutive years, between 1967 and 1983, the New York Stock Exchange showed annual gains when a team from the old National Football League won the Super Bowl and fell when a team from the old American Football League emerged as the victor.

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