Historical Echoes: The Aftermath of a Devastating Hurricane . . . in 1938

Jason Bram and Kara Masciangelo

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.

Just Released: Press Briefing on Housing Conditions and the Economic Impact of Superstorm Sandy on the Region

Jaison R. Abel, Jason Bram, and Claire Kramer

At today’s regional economic press briefing, we provided an update on housing conditions as well as an initial assessment of superstorm Sandy’s economic impact on the region.

Just Released: New York’s Latest Beige Book Report Points to Weakening in the Aftermath of Superstorm Sandy

Jaison R. Abel and Jason Bram

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.

The Different Paths of Greece and Spain to High Unemployment

Thomas Klitgaard and Ayşegül Şahin

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 market flexibility.

Household Services Expenditures: An Update

Jonathan McCarthy

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.

Historical Echoes: Reverse Bank Run, Or When the Money Came Rollin’ In

Mary Tao

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.

Doing Well by Doing Good? Community Development Venture Capital

Anna Kovner

In a new working paper, Josh 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.

Compensation Growth and Slack in the Current Economic Environment

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.

Historical Echoes: 1947 Banking Basics, Step by Step

Amy Farber

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.

Just Released: November Empire State Manufacturing Survey Points to Storm’s Effects

Jason Bram and Richard Deitz

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.