Liberty Street Economics
September 03, 2014

Staying in College Longer Than Four Years Costs More Than You Might Think

Jaison R. Abel and Richard Deitz

This post is the second in a series of four Liberty Street Economics posts examining the value
of a college degree

In yesterday’s blog post and in our recent article in the New York Fed’s Current Issues series, we showed that the economic benefits of a bachelor’s degree still outweigh the costs, on average, even in today’s difficult labor market. Like others who assess the value of a bachelor’s degree, we base our estimates on the assumption that a student takes four years to finish the degree. But it is not uncommon for people to take longer than that. In fact, recent data indicate that among those who complete a bachelor’s degree within six years, only about two-thirds finish in four years or less. What does it cost to stay in college for a fifth or sixth year before finishing that degree? Perhaps more than you might think.

Posted by Blog Author at 12:00 PM in Labor Economics | Permalink | Comments ( 2 )

Just Released: N.Y. Fed’s Emanuel Moench to Become Head of Research at the Deutsche Bundesbank

No one can accuse the Federal Reserve Bank of New York of not being a big supporter of central bank cooperation. Furthering that theme, I’m pleased to report that Emanuel Moench will join the staff of the Bundesbank after having launched his career here at the New York Fed. In February 2015, Emanuel will take on a new role as Head of Research at the Deutsche Bundesbank.

Posted by Blog Author at 9:00 AM in Labor Economics | Permalink | Comments ( 0 )

September 02, 2014

From Our Archive: Reading Labor Market Slack

Anna Snider

In her speech “Labor Market Dynamics and Monetary Policy” at the Kansas City Fed’s recent Jackson Hole symposium, Fed chairwoman Janet Yellen discussed economic puzzles challenging policymakers, including topics we’ve addressed on Liberty Street Economics. A central and much-debated question is: how tight is the current labor market? The unemployment rate is one key measure. But in February, a team of our bloggers proposed a finer tool to measure slack—one that distinguishes the effects of long- and short-duration unemployment on wage inflation.

Posted by Blog Author at 2:00 PM in Labor Economics | Permalink | Comments ( 0 )

The Value of a College Degree

Jaison R. Abel and Richard Deitz

This post is the first in a series of four Liberty Street Economics posts examining the value
of a college degree

Not so long ago, people rarely questioned the value of a college degree. A bachelor’s degree was seen as a surefire ticket to a career-oriented, good-paying job. Today, however, many people are uncertain whether going to college is such a wise decision. It’s easy to see why. Tuition costs have been rising considerably faster than inflation, student debt is mounting, wages for college graduates have been falling, and recent college graduates have been struggling to find good jobs. These trends might lead one to believe that college is no longer a good investment. But when you dig into the data, is this really true? This week, we examine the value of a college degree in a four-part blog series. In this first post, we do the basic math and show that despite what appears to be a set of alarming trends, the value of a bachelor’s degree for the average graduate has held near its all-time high of about $300,000 for more than a decade.

Posted by Blog Author at 7:00 AM in Labor Economics | Permalink | Comments ( 8 )

August 25, 2014

Turnover in Fedwire Funds Has Dropped Considerably since the Crisis, but It’s Okay

Rodney Garratt, Antoine Martin, and James McAndrews

The Fedwire® Funds Service is a large-value payment system, operated by the Federal Reserve Bank of New York, that facilitates more than $3 trillion a day in payments. Turnover in Fedwire Funds, the value of payments made for every dollar of liquidity provided, has dropped nearly 75 percent since the crisis. Should we be concerned? In this post, we explain why turnover has dropped so much and argue that it is, in fact, a good thing.

Posted by Blog Author at 7:00 AM in Financial Institutions | Permalink | Comments ( 0 )

August 22, 2014

Historical Echoes: Federal Reserve Clams

Marja Vitti

We’ve already talked about clams being used as money as late as 1933, but some genuine clam shells found during the construction of the New York Fed’s building at 33 Liberty Street sparked both geological interest and many witty remarks about “clams” being fossilized under a bank.

Posted by Blog Author at 7:00 AM in Historical Echoes | Permalink | Comments ( 2 )

August 20, 2014

The Declining U.S. Reliance on Foreign Investors

Thomas Klitgaard and Preston Mui

The United States has been borrowing from the rest of the world since the mid-1980s. From 2000 to 2008, this borrowing averaged over $600 billion per year, which translates into U.S. spending exceeding income by almost 5.0 percent of GDP. Borrowing fell during the recent recession, as would be expected, and then rebounded with the recovery. Since 2011, however, borrowing has trended down and fell to 2.4 percent of GDP in 2013, the smallest amount as a share of GDP since 1997. A reduced dependency on foreign funds can be viewed as a favorable development to the extent that it reflects an improvement in the fiscal balance to a more easily sustainable level. However, it also reflects the lackluster recovery in residential investment, which is one reason the economy has yet to get back to its full operating potential.

August 18, 2014

Just Released: Firms Weigh in on Affordable Care Act in August Business Surveys

Jason Bram and Michael Kubiske

The Federal Reserve Bank of New York’s monthly surveys of manufacturers and service-sector firms include special supplementary questions on topics of interest. The August survey questions focused on the effects of the Affordable Care Act (ACA) on businesses in the District, and how, if at all, firms are making changes in response to it.

Posted by Blog Author at 8:45 AM in Regional Analysis | Permalink | Comments ( 0 )

Gates, Fees, and Preemptive Runs

Marco Cipriani, Antoine Martin, Patrick McCabe, and Bruno M. Parigi

In the academic literature on banks, “suspension of convertibility”—that is, preventing the exchange of deposits at par for cash—has traditionally been seen as a potential means of preventing economically damaging bank runs. In this post, however, we show that giving a financial intermediary (FI) the option to suspend convertibility may ultimately increase the risk of runs by causing preemptive runs. That is, investors who face potential restrictions on their future access to cash may run when they anticipate that such restrictions may be imposed.

Posted by Blog Author at 7:00 AM in Financial Institutions | Permalink | Comments ( 2 )

August 15, 2014

Historical Echoes: Caricatures of Financial Leaders in the National Portrait Gallery

Amy Farber

Kascht-greenspan-buffett-caricatures-300px-(2) Caricatures of Alan Greenspan and Warren Buffett in the National Portrait Gallery? Are we hearing correctly? The National Portrait Gallery indeed collects and has great respect for caricatures. The Gallery had a 1998 exhibition and post entitled “Celebrity Caricature in America.” Caricature is quite an old art form: According to Werner Hofmann’s 1957 “Caricature from Leonardo to Picasso,” caricature in the Western world dates back to Leonardo da Vinci. Caricatures of bankers and financiers have been around probably as long as bankers and financiers.

Posted by Blog Author at 7:00 AM in Historical Echoes | Permalink | Comments ( 0 )

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