How Did the Great Recession Affect New York State’s Public Schools?

Rajashri Chakrabarti and Elizabeth Setren*

Surprisingly, there is no literature on how recessions (including the Great Recession) have affected schools. Perhaps this is because educational funding stresses and decisions vary among and within states, which makes it hard to reach general conclusions. Yet schools play an indispensable role in our society, educating the populace and building the nation’s future. Therefore, it is important to understand how the Great Recession is affecting public spending on schools, the delivery of education services, and student learning. In this post, we analyze one state’s experience, drawing on our study “The Impact of the Great Recession on School District Finances: Evidence from New York.” While we do not find evidence of much impact on schools’ overall revenue or expenditures, we do detect important compositional changes that could affect both student learning and school financing in coming years.

Historical Echoes: The Double Eagle Lands at the New York Fed

Megan Cohen, New York Fed Research Library

The most expensive coin in the world, the famed 1933 Double Eagle, is on display to the public at the New York Fed. Its price at auction exceeded that of the gold Brasher doubloon, minted in 1787, which was sold for $7.4 million earlier this month. This post traces the 1933 Double Eagle’s long, fascinating history, which stretches from the early twentieth century to the unusual circumstances of the coin’s arrival at the New York Fed.

Why Mortgage Refinancing Is Not a Zero-Sum Game

Joseph Tracy and Joshua Wright*

In a recent speech, New York Fed President William Dudley called for actions “to see refinancing made broadly available on streamlined terms and with moderate fees to all prime conforming borrowers who are current on their payments.” This blog post explains how such a move could help stabilize the housing market and support economic growth. It also explains why mortgage refinancing is not—as some argue—a zero-sum game in which the benefits to one group are exactly offset by the costs to another.

Cash Assets of Foreign Banks: An Example of Seasonal Adjustment Gone Awry

Adam Copeland, Todd Keister, and Parinitha Sastry*

Federal Reserve Statistical Release H.8 provides aggregate data on the assets and liabilities of commercial banks in the United States. Two types of data are provided: one in which each series is adjusted to offset regular, seasonal movements, and another in which no adjustment is made. Recently, a striking pattern has emerged in one particular data series: the cash assets of foreign-related banking institutions.[1] In the seasonally adjusted data, this value has fallen 36 percent since its peak in June 2011—a sharp movement that has generated concern among market observers. The nonseasonally adjusted data present a different picture, however, with a decline of only 16 percent over this period.  Which of these numbers more accurately represents recent events? In this post, we argue that the seasonally adjusted data are misleading in this case and should not be used.  More generally, we use this episode to highlight the need for caution when using and interpreting seasonally adjusted data.

Historical Echoes: Henry George – NYC Mayoral Candidate and Best-Selling, Self-Educated Political Economist

Amy Farber, New York Fed Research Library

In contrast to the staid popular image of today’s economists, Henry George (1839-97), a famous critic of protectionist economic policies, had a fascinating and tumultuous life. He was self-educated and held jobs as a deckhand, typesetter, warehouse worker, journalist, and editor. At one point, George was so poor that he resorted to begging in the streets. Yet he eventually ran for mayor of New York City twice. The first time, he got more votes than Theodore Roosevelt, although he lost the race. The second time, he died from a stroke during the campaign.

Forecasting with Internet Search Data

Rebecca Hellerstein and Menno Middeldorp

Most economic data are released with a lag, sometimes quite a substantial one. Since the advent of regularly scheduled releases of economic data in the 1930s, a key challenge for economists has been to identify indicators that provide timely information about the release before it comes out—effectively, that “now-cast” its content. Recent academic research suggests that counts of Internet searches for certain words or phrases can predict some macroeconomic data releases. In this post, we show that Internet search counts can also predict some financial market data releases, as well as future price movements in some financial markets.