-
About the
New York Fed -
Economic
Research -
Financial Institution Supervision
- Financial Services
& Infrastructure- Outreach
& EducationThe New York Fed engages with individuals, households and businesses in the Second District and maintains an active dialogue in the region. The Bank gathers and shares regional economic intelligence to inform our community and policy makers, and promotes sound financial and economic decisions through community development and education programs.
Liberty Street Economics
13 posts from May 2013May 31, 2013
Historical Echoes: How to Choose a Bank, Past and Present
Amy Farber
In May 1953, an article from Kiplinger’s Changing Times titled “No, All Banks Are Not Alike” advised, “You want a bank that is safe, convenient, pleasant to visit; one that offers all the regular banking services and makes reasonable charges for them; one that is well managed and competently staffed, and whose officers and tellers are friendly and willing to advise you on your major financial problems.” It also recommends considering whether the officers of the bank participate in civic affairs and whether the bank provides tours for children.
Continue reading "Historical Echoes: How to Choose a Bank, Past and Present" »
May 29, 2013
Piggy Banks
Donald P. Morgan and Katherine A. Samolyk
What do banks do? Ask an economist and you’ll get a variety of answers. Banks play a vital role in allocating capital by linking savers and borrowers; they produce information by screening and monitoring borrowers; they create liquidity; they share and distribute risk; they engage in maturity transformation by borrowing short and lending long. What you won’t usually hear is that banks may help people stick to an optimal savings plan that they might not be able to stick to if they invested their money themselves. In other words, banks may serve as piggy banks by preventing people from consuming assets when the return to investing is high, even when the temptation to consume is strong.
Posted by Blog Author at 7:00 AM in Banks, Dodd-Frank, Financial Institutions, Household Finance | Permalink | Comments (0)May 24, 2013
Historical Echoes: Seeing through the Blackout of 1965 and Other Trials
Amy Farber
In November 1965, the northeastern United States experienced a thirteen-hour blackout—the biggest in history to that date. Life magazine did a spread (p. 36) with some surreal and gloomy pictures of stranded, dazed, well-dressed passengers sleeping every which way all over New York City’s Grand Central Terminal. A book was written that same year by the staff of the New York Times, When the Lights Went Out, which describes in detail how people and various agencies in New York had to cope and make emergency adjustments.Continue reading "Historical Echoes: Seeing through the Blackout of 1965 and Other Trials" »
May 23, 2013
Just Released: The New York Fed Staff Forecast—May 2013
Jonathan McCarthy and Richard Peach
As we did last year around this time, we’re presenting the New York Fed staff outlook for the U.S. economy to the Bank’s Economic Advisory Panel at today’s meeting. It provides an opportunity to get valuable feedback from leading economists in academia and the private sector on the staff forecast; such feedback helps us evaluate the assumptions and reasoning underlying our forecast and the risks to it. It’s important to open the staff forecast to periodic evaluation to inform the staff’s discussions with New York Fed President Bill Dudley about economic conditions. In the same spirit of inviting feedback, we’re sharing a short summary of our forecast; for more, see the material from the Panel’s meeting.
Continue reading "Just Released: The New York Fed Staff Forecast—May 2013" »
Posted by Blog Author at 10:30 AM in Forecasting, Macroecon, Unemployment | Permalink | Comments (1)May 22, 2013
Foreign Borrowing in the Euro Area Periphery: The End Is Near
Matthew Higgins and Thomas Klitgaard
Current account deficits in euro area periphery countries have now largely disappeared. This represents a substantial adjustment. Only two years ago, deficits stood at nearly 10 percent of GDP in Greece and Portugal and 5 percent in Spain and Italy (see chart below). This sharp narrowing means that spending has been brought in line with income, largely righting an imbalance that had left these countries dependent on heavy foreign borrowing. However, adjustment has come at a sizable cost to growth, with lower domestic spending only partly offset by higher export sales. Downward pressure on domestic spending should abate now that the periphery countries have been weaned from foreign borrowing. The risk, though, is that foreign creditors might demand that the countries pay down (rather than merely service) accumulated external debts, forcing them to reduce spending below incomes.
Continue reading "Foreign Borrowing in the Euro Area Periphery: The End Is Near" »
Posted by Blog Author at 7:00 AM in Balance of Payments, Current Account, Euro Area, Exchange Rates, Exports, International Economics | Permalink | Comments (1)May 20, 2013
Do Big Cities Help College Graduates Find Better Jobs?
Jaison R. Abel and Richard Deitz
Although the unemployment rate of workers with a college degree has remained well below average since the Great Recession, there is growing concern that college graduates are increasingly underemployed—that is, working in a job that does not require a college degree or the skills acquired through their chosen field of study. Our recent New York Fed staff report indicates that one important factor affecting the ability of workers to find jobs that match their skills is where they look for a job. In particular, we show that looking for a job in big cities, which have larger and thicker local labor markets (that is, bigger markets with many buyers and sellers), can give workers a better chance to find a job that fits their skills.
Continue reading "Do Big Cities Help College Graduates Find Better Jobs?" »
Posted by Blog Author at 7:00 AM in Education, Labor Economics, Regional Analysis | Permalink | Comments (3)May 17, 2013
Historical Echoes: The “Mississippi Bubble” – When One’s Back Could Be Rented Out as a Writing Desk
Amy Farber
In 1720, the very same year that England was experiencing the “South Sea Bubble” (see our post), France was experiencing a bubble as well—the “Mississippi Bubble.” France’s bubble was brought on by government debt and the advice of the head of the country’s finance ministry, John Law (Scottish mathematician, convicted murderer [a duel], gambler, and financial genius), to create paper money and a bank and to invest in his Mississippi Company. (Indeed, at the height of the trading frenzy for shares of stock in Law’s company, a hunchbacked man rented his back out as a desk in the “Street of Speculators” and earned a considerable sum.) Over a three-year period (1718-20), things went very wrong and too much money was printed (the regent’s decision, not Law’s). The text accompanying this portrait of Law describes him as an:
18th century Scotsman, credited by some historians as being “the father of inflation.” Law turned gambling IOUs into “gold counters,” then state debts into paper money, and finally sold all France down the river on the “Mississippi Bubble.”
May 15, 2013
My Two (Per)cents: How Are American Workers Dealing with the Payroll Tax Hike?
Basit Zafar, Max Livingston, and Wilbert van der Klaauw
The payroll tax cut, which was in place during all of 2011 and 2012, reduced Social Security and Medicare taxes withheld from workers’ paychecks by 2 percent. This tax cut affected nearly 155 million workers in the United States, and put an additional $1,000 a year in the pocket of an average household earning $50,000. As part of the “fiscal cliff” negotiations, Congress allowed the 2011-12 payroll tax cut to expire at the end of 2012, and the higher income that workers had grown accustomed to was gone. In this post, we explore the implications of the payroll tax increase for U.S. workers.
Continue reading "My Two (Per)cents: How Are American Workers Dealing with the Payroll Tax Hike?" »
May 14, 2013
Just Released: The Geography of Student Debt
Andrew Haughwout, Donghoon Lee, Wilbert van der Klaauw, and Joelle Scally
This morning, the New York Fed released its Quarterly Report on Household Debt and Credit for 2013 Q1. The report uses the FRBNY Consumer Credit Panel to show that outstanding household debt declined approximately $110 billion (about 1 percent) from the previous quarter. The drop was due in large part to a reduction in housing-related debt and credit card balances. Meanwhile, delinquency rates for each form of consumer debt declined, with the overall ninety-plus day delinquency rate dropping from 6.3 percent to 6.0 percent.
Continue reading "Just Released: The Geography of Student Debt" »
Posted by Blog Author at 11:15 AM in Household Finance, Regional Analysis, Student Loans | Permalink | Comments (3)May 13, 2013
Capital Controls, Currency Wars, and International Cooperation
Bianca De Paoli and Anna Lipinska
The debate over whether there’s a case for limiting capital flows has intensified recently—both in media and academic forums. The traditional view has generally been that the voluntary exchange of funds across borders makes everyone better off: Borrowers have access to cheaper credit while lenders enjoy higher returns on their investments. But, as a recent article in The Economist highlights, this view has been revisited. In this post, we review arguments on this issue and discuss how our recent research contributes to the debate.
Continue reading "Capital Controls, Currency Wars, and International Cooperation" »
About the BlogLiberty 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.
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.
Economic Research Tracker
Liberty Street Economics is now available on the iPhone® and iPad® and can be customized by economic research topic or economist.
View by Topicbank capital balance of payments banks central bank corporate finance credit crisis crisis chronicles cryptocurrencies current account dealers demographics dodd-frank dsge economic history education employment euro area exchange rates expectations exports fed funds federal reserve financial institutions financial intermediation financial markets fire sale fiscal policy fomc forecasting foreclosure great recession hey, economist! high frequency trading historical echoes household household finance housing human capital inequality inflation international economics labor economics labor market lender of last resort liquidity macroecon monetary policy mortgages new jersey new york new york city panic phillips curve puerto rico recession regional analysis regulation repo sandy stocks student loans systemic risk tariffs treasury unemployment wagesMost Viewed
Last 12 MonthsUseful LinksComment GuidelinesWe encourage your comments and queries on our posts and will publish them (below the post) subject to the following guidelines:Please be brief: Comments are limited to 1500 characters.Please be quick: Comments submitted after COB on Friday will not be published until Monday morning.Please be aware: Comments submitted shortly before or during the FOMC blackout may not be published until after the blackout.Please be on-topic and patient: Comments are moderated and will not appear until they have been reviewed to ensure that they are substantive and clearly related to the topic of the post. We reserve the right not to post any comment, and will not post comments that are abusive, harassing, obscene, or commercial in nature. No notice will be given regarding whether a submission will or will not be posted.Disclosure PolicyThe LSE editors ask authors submitting a post to the blog to confirm that they have no conflicts of interest as defined by the American Economic Association in its Disclosure Policy. If an author has sources of financial support or other interests that could be perceived as influencing the research presented in the post, we disclose that fact in a statement prepared by the author and appended to the author information at the end of the post. If the author has no such interests to disclose, no statement is provided. Note, however, that we do indicate in all cases if a data vendor or other party has a right to review a post.Archives - Financial Services
RSS Feed