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Liberty Street Economics
8 posts from January 2015January 16, 2015
Just Released: January Business Leaders Survey Indicates Regional Business Conditions Are Finally Back to Normal
The New York Fed’s January Business Leaders Survey indicates that the regional economy kicked off the New Year on a positive note. This monthly survey—which covers firms in the service sector in New York State, northern New Jersey, and southwestern Connecticut—dates back to 2004, and this month marks the one-year anniversary of its public release. In addition to showing a solid increase in regional economic activity, employment, and wages, January’s survey signals that the regional economy has reached an important milestone: firms are saying that business conditions are finally back to normal for the first time since before the Great Recession.
Historical Echoes: The World of Bank Names, According to Andy Rooney
Did’ya ever notice how silly those Historical Echoes posts can get? Andy Rooney passed in November 2011 (see the New York Times obituary and the obituary from CBS), so he missed his chance to comment on the Liberty Street Economics blog (although here’s a guy pretending to be Mr. Rooney talking about blogs). But while he was alive he sure had a lot of funny and insightful things to say on a lot of topics, including bank names.
Continue reading "Historical Echoes: The World of Bank Names, According to Andy Rooney" »
January 14, 2015
FRN Follow-Up: Who Are the Market Participants?
On January 29, 2014, the U.S. Treasury held its first auction of a two-year floating-rate note (FRN), which pays a fixed spread over the floating thirteen-week bill rate rather than a fixed coupon. In this post, we investigate the aftermath of the January auction and highlight the important role played by dealers as intermediaries and by money market funds as ultimate investors. For more details on the FRN terms, please see our previous post, which offered an introduction to FRNs.
Continue reading "FRN Follow-Up: Who Are the Market Participants?" »
January 12, 2015
Hybrid Intermediaries
A successful hybrid is an offspring of two species that, in a new environment, is better suited for survival than its own parents. Evolution in the financial “ecosystem” seems to have driven the emergence of hybrid intermediaries.
January 09, 2015
Historical Echoes: Metaphors for Monetary Policy and Some GMAT Nostalgia
Metaphors, similes, analogies—we know they’re not the same thing, but they can do pretty much the same job when illustrating what monetary policy is like (or what anything is like). Here are a few such monetary policy comparisons from some notable economists and commentators. For some reason, they all seem to involve physics. More exist, of course.
Note that monetary policy encompasses a range of concerns, not just a single issue. Therefore, the metaphors and analogies illustrate different phenomena.
Continue reading "Historical Echoes: Metaphors for Monetary Policy and Some GMAT Nostalgia" »
January 07, 2015
What Does Disagreement Tell Us about Uncertainty?
Uncertainty is of considerable interest for understanding the behavior of individuals as well as the movements in key macroeconomic and financial variables. Despite its importance, direct measures of uncertainty aren’t widely available. Because of this data limitation, a common practice is to use survey-based measures of forecast dispersion—reflecting disagreement among respondents—to proxy for uncertainty. Is this a reliable practice? Here, we review the distinction between disagreement and uncertainty as concepts, and show that this conceptual distinction carries over to their empirical counterparts, suggesting that disagreement is not generally a good proxy for uncertainty.
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January 05, 2015
Worker Flows in Banking Regulation
In the aftermath of the 2008 financial crisis, job transitions of personnel in banking supervision and regulation between the public and private sectors—often labeled the revolving door—have come under intense scrutiny and have been blamed by certain economists (Johnson and Kwak), legal scholars (John Coffee in the Financial Times), and policymakers (Dodd-Frank Act of 2010, Section 968) for distorting regulators’ actions in favor of banks. However, other commentators have downplayed these distortions and presented a more benign viewpoint of these worker flows—as a means for regulatory agencies to attract higher-ability and skilled workers. Because data on job transitions in banking regulatory agencies are scarce, these discussions are mostly informed by anecdotes. Our recent paper brings more rigor to this debate by contributing a first set of stylized facts based on data related to incidence and drivers of worker flows in U.S. banking regulation. Our data show clear evidence of higher worker inflows to the regulatory sector during bad economic conditions. When we study worker flows as a function of an enforcement proxy, we find evidence to be inconsistent with the often-cited “quid-pro-quo” hypothesis. We instead posit an alternative “regulatory schooling” hypothesis that may better explain the empirical evidence.January 02, 2015
Historical Echoes: The Demise of Silver Certificates
On June 24, 1968, thousands of people swarmed assay offices in the United States, anxious to unload their holdings of silver certificates. The U.S. Treasury had deemed this the final date on which the certificates could be exchanged for silver bullion. People camped out overnight to ensure that they would beat the deadline, and the resulting lines stretched for hours. Life Magazine covered the story, and offered a history of silver certificates in the United States.
Continue reading "Historical Echoes: The Demise of Silver Certificates" »
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.
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