The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
To celebrate its 175th anniversary, American Banker is featuring selected articles that describe important and interesting events in banking history. The articles range from 1848, when the magazine was called Thompson’s Bank Note Reporter, to 1999. The magazine has been reproducing the headlines in its print publication (“American Banker’s 175th Anniversary Flashback Series”) as well as providing a selected archive on its website.
Economists generally agree that productivity is the primary ingredient for sustainable growth in GDP and wages. The August productivity data release provided some clarification regarding trend—or long-run—GDP growth, but the news was not good: Following a resurgence of strong productivity growth in the late 1990s and early 2000s after nearly a quarter-century of slow growth beginning in 1973, the latest reading from a trend tracking model now indicates that slow productivity growth returned in 2004. In this post, we describe our “regime-switching” productivity model and share the model’s insights into the historical profile of high- and low-growth regimes as well as the outlook for productivity.
Although the dollar strengthened somewhat recently, its level relative to the currencies of the United States’ main trading partners is nonetheless 11 percent lower than it was at the start of 2009. This represents one of the more pronounced periods of dollar weakness over the past two decades and consequently has garnered considerable attention from market participants and policymakers alike. In this post, we examine the role of market uncertainty and currency risk premia in the pace and size of episodes of dollar weakness since 1991. We find that the most recent bout of U.S. dollar declines largely can be attributed to the recovery in global economic activity from the most recent recession.
Global financial markets tend to move together. For example, stock market movements across the globe are highly synchronized, economic data releases frequently have large spillover effects across borders, and episodes of financial turmoil often spread across countries that share no significant economic linkages. The degree of co-movement across markets often appears to be surprisingly large when compared with the strength of the underlying economic relationships. What can explain this seemingly “excessive” co-movement? This post, based on a recent research paper, argues that speculative trading may magnify financial market co-movement.
William McChesney Martin Jr. (1906-98) was chairman of the Board of Governors of the Federal Reserve System from 1951 to 1970, serving under five U.S. presidents. (His father, incidentally, was president of the Federal Reserve Bank of St. Louis.) In 1938, at the age of thirty-one, Martin was elected president of the New York Stock Exchange, becoming the youngest salaried president of the exchange.
We find that, in a sharp reversal of earlier trends, U.S. import prices for consumer goods shipped from China have been rising rapidly in recent quarters—by 7 percent between 2010:Q2 and 2011:Q1. In this post, we track U.S. import price movements in Chinese goods in different product categories by creating an import index that uses highly disaggregated data. We also consider the likely causes of the recent rise in prices for consumer goods. If these price hikes persist, they could have important consequences for U.S. businesses and consumers because China is the largest single supplier of U.S. imports, accounting for more than 20 percent of non-oil imports.
With unemployment very high, income loss is now the primary reason for mortgage default. Unemployed homeowners face tough choices. Those with equity in their house may attempt to sell it quickly. Alternatively, to keep their house while seeking a new job, they might deplete their savings, apply for a loan modification, or use other credit. Those with negative equity—who owe more on the mortgage than the property’s current value—have fewer choices, because selling the house won’t pay off the mortgage. All too often the home enters foreclosure and becomes costly for the family and the community. In this post, we examine how states may be able to offer special bridge loans to help jobless homeowners pay their mortgages and help protect neighborhoods and housing markets. Such initiatives could complement existing programs by helping many distressed homeowners before they miss any payments.
In the nineteenth century, convicts transported to New South Wales, Australia, were encouraged to deposit their money in one of the colony’s banks. But in 1822, they were forced to do so. Prisoners in private jails were also compelled to pay for their incarceration and were housed according to their ability to pay, with accommodations ranging from a private cell with a cleaning woman to one where the convict had to lie on the floor with no cover.
Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.
The editors are Michael Fleming, Andrew Haughwout, Thomas Klitgaard, and Asani Sarkar, all economists in the Bank’s Research Group.
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