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.
More than seventy-four years ago, on September 21, 1938, a devastating
hurricane—sometimes referred to as the Long Island Express—struck the southern shore of Long Island without much warning, killing fifty people and causing
massive property damage. The storm would continue
on and inflict severe damage to the southeastern part of Connecticut and
much of New England. This dramatic
11-minute video from the U.S. Works Progress Administration details the
storm’s aftermath and rebuilding efforts.
The regional economy experienced a weakening in the aftermath of superstorm Sandy, according to the New York Fed’s latest Beige Book report. Eight times a year, each of the nation’s twelve Federal Reserve Banks produces a report on current economic conditions in its District, based on largely anecdotal information obtained from a variety of regional business contacts. The New York Fed’s report covers New York State, northern New Jersey, and southwestern Connecticut.
Euro area GDP remains below its 2007 level due to the global financial meltdown
and the subsequent sovereign debt crisis in the periphery countries. Unemployment
rates make it clear that some countries have fared much worse than others—the
rates in Spain and Greece today are over 25 percent and are much higher
than rates in the next highest, Portugal (15.7 percent), and in the euro
area (11.6 percent). Quite a change from 2007, when Spain and Greece had
lower unemployment rates than the euro area as a whole. In this post, we show
that while the unemployment rates in the two countries are similar today, the
paths have been very different. The employment decline in Greece, like in the
euro area, has been proportional to the country’s steep decline in GDP; Spain’s
employment has fallen much more than output, due in part to its notable labor
This post updates and extends my
July 2011 blog piece on household discretionary
services expenditures. I examine the most recent data to see what they reveal about
the depth of decline in expenditures in the last recession and the extent of
the recovery, and find that the expenditures appear to be further below the peak
identified earlier. I then compare the pace of recovery for discretionary and
nondiscretionary services in this expansion with that of previous expansions,
finding that the pace in both cases is well below that of previous cycles. In
summary, household spending continues to be constrained by a combination of
credit conditions and weak income expectations.
On March 6, 1933, President Roosevelt issued a proclamation of a
national bank holiday, which prohibited the withdrawal of gold for hoarding and
other purposes and resulted in the temporary closure of all banks in the United
States. The proclamation was followed by huge inflows of gold to the Federal Reserve.
In a new working
Lerner and I explore how the
venture capital (VC) model can be harnessed to achieve socially targeted ends
by examining the investment record of community development venture capital (CDVC)
firms. Our results are mixed. Investments made by CDVC firms are less likely to
succeed than are investments made by traditional VC firms. This lower
probability of success persists even after controlling for the fact that CDVC
firms invest in industries and geographies that have, on average, lower success
rates. However, we do find that CDVC firms have the benefit of bringing
traditional VC firms to underserved regions; controlling for the presence of
traditional VC investments, we find that each additional CDVC investment draws an
additional 0.06 new traditional VC firms to a region.
M. Henry Linder, Richard Peach, and Robert W. Rich
Following a significant slowing during the recent recession, growth in various
labor compensation measures has stabilized during the past two to three years. This
stabilization is puzzling because it’s widely held that a significant amount of
slack remains in the economy. Accordingly, this large amount of slack should
result in a further slowing in compensation (wage) growth. In this post, we
show that there’s a very mild trade-off between compensation growth and
resource slack, even though slack is sizable. Consequently, the observation that
there’s slow but steady growth in labor compensation measures is consistent with
a large amount of slack in the current economic environment.
In 1947, if you didn’t quite understand banking basics, the ten-and-a-half-minute
film “Using the Bank” might have served as an introduction. The film follows citizen and prospective entrepreneur Frank Adams as he deposits money in his savings account, requests a business loan from his bank, opens a checking account for his new business, uses a check to pay for business supplies, and gets change for his business.
The camera brings every detail to life in glorious black and white.
The results of this morning’s November Empire State Manufacturing Survey point to a slight decline in business conditions in New York’s manufacturing sector in the wake of “superstorm” Sandy. The headline general business conditions index was little changed from last month and, at a level of -5.2, suggests that overall, business activity was modestly lower than in our previous survey. Employment levels were noticeably down, as the employment index fell 14 points to -14.6, its lowest level since mid 2009. On the upside, however, the new orders index climbed into positive territory and the shipments index shot up 21 points to 14.6, its highest level since May.
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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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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