Liberty Street Economics
February 28, 2014

Historical Echoes: Open a Kiddie Book and Read about Economic Principles, or Read it and Sleep

Would it ever occur to anyone that Charlie and the Chocolate Factory(Roald Dahl, 1964) teaches economic lessons about “incentives, poverty, scarcity, producers, consumers, and competition”?

Posted at 7:00 am in Historical Echoes | Permalink | Comments (2)
February 26, 2014

Factors that Affect Bank Stability

Thomas M. Eisenbach and Tanju Yorulmazer In a previous Liberty Street Economics post, we introduced a framework for thinking about the risks banks face. In particular, we distinguished between asset return risk and funding risk that can interact and cause a bank to fail. In our framework, a bank can fail for two reasons:

February 24, 2014

What Makes a Bank Stable? A Framework for Analysis

Thomas M. Eisenbach and Tanju Yorulmazer One of the major roles of banks and other financial intermediaries is to channel funds from savings into valuable projects. In doing so, banks engage in “liquidity and maturity transformation,” since they finance long-term, illiquid projects while funding themselves with short-term, liquid liabilities. By performing this important role, banks […]

February 21, 2014

Historical Echoes: Thomas Jefferson Slept Here on Maiden Lane/The Compromise of 1790

Mary Tao In a prior blog post, we saw how Maiden Lane evolved over time. It was here that a momentous event occurred in 1790, changing the history of the United States.      While serving as Secretary of State in 1790, Thomas Jefferson rented a “mean house” at 57 Maiden Lane “for 106 pounds per […]

Posted at 7:00 am in Historical Echoes | Permalink | Comments (1)
February 20, 2014

Just Released: The Inflation Outlook in the Euro Zone . . . Survey Says

The European Central Bank (ECB) released its 2014:Q1 Survey of Professional Forecasters (SPF) on February 13.

February 19, 2014

Why Is the Job-Finding Rate Still Low?

Fluctuations in unemployment are mostly driven by fluctuations in the job-finding prospects of unemployed workers—except at the onset of recessions, according to various research papers (see, for example, Shimer [2005, 2012] and Elsby, Hobijn, and Sahin [2010]).

Posted at 7:00 am in Labor Economics, Macroecon | Permalink | Comments (1)
February 18, 2014

Just Released: Does Transportation Spending Make Good Stimulus?

On January 14, the Transportation Research Board, an arm of the National Research Council, released a new report, Transportation Investments in Response to Economic Downturns.

Posted at 3:00 pm in Macroecon | Permalink | Comments (1)

Just Released: Who’s Borrowing Now? The Young and the Riskless!

According to today’s release of the New York Fed’s 2013:Q4 Household Debt and Credit Report, aggregate consumer debt increased by $241 billion in the fourth quarter, the largest quarter-to-quarter increase since 2007.

Posted at 11:15 am in Household Finance, Housing | Permalink | Comments (1)
February 14, 2014

Puerto Rico Employment Trends–Not Quite as Bleak as They Appear

Puerto Rico’s economy has been in a protracted economic slump since 2006. If there were officially designated recessions for the Commonwealth, it probably would have been in one for the better part of these past seven years.

February 12, 2014

The Long and Short of It: The Impact of Unemployment Duration on Compensation Growth

How tight is the labor market? The unemployment rate is down substantially from its October 2009 peak, but two-thirds of the decline is due to people dropping out of the labor force.

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