Liberty Street Economics
April 21, 2017

Just Released: The New York Fed Staff Forecast—April 2017

Today, the Federal Reserve Bank of New York (FRBNY) is hosting the spring meeting of its Economic Advisory Panel (EAP). As has become the custom at this meeting, the FRBNY staff is presenting its forecast for U.S. growth, inflation, and the unemployment rate.

Posted at 10:30 am in Forecasting | Permalink | Comments (0)
April 19, 2017

Is Chinese Growth Overstated?

For analysts of the Chinese economy, questions about the accuracy of the country’s official GDP data are a frequent source of angst, leading many to seek guidance from alternative indicators.

April 18, 2017

Why Renegotiating NAFTA Could Disrupt Supply Chains

Supply chains, where production of a final good incorporates specialized parts produced abroad, have become increasingly interlinked across the U.S.-Mexico border. The North American Free Trade Agreement (NAFTA) allows tariff-free commerce between the United States, Canada, and Mexico, has facilitated this integration. Some critics of NAFTA are concerned about the bilateral trade deficit and have proposed stricter rules of origin (ROO), which would make it more cumbersome for firms to access the zero tariff rates they are entitled to with NAFTA. We argue that measures that make it costlier for U.S. firms to import will also hurt exports because much of U.S.-Mexican trade is part of global supply chains.

April 17, 2017

U.S. Exporters Could Face High Tariffs without NAFTA

An underappreciated benefit of the North American Free Trade Agreement (NAFTA) is the protection it offers U.S. exporters from extreme tariff uncertainty in Mexico.

April 12, 2017

The End of China’s Export Juggernaut

China has been an exporting juggernaut for decades. In the United States, this has meant a dramatic increase in China’s share of imports and a ballooning bilateral trade deficit. Gaining sales in the United States at the expense of other countries, Chinese goods rose from only 2 percent of U.S. non-oil imports in 1990 to 8 percent in 2000 and 17 percent in 2010. But these steady gains in U.S. import share have stopped in recent years, with China even losing ground to other countries in some categories of goods. One explanation for this shift is that Chinese firms now have to directly compete against manufacturers in high-skill developed countries while also fending off competition from lower-wage countries, such as Vietnam. This inability to make additional gains at the expense of other countries means that exports don’t contribute as much to China’s overall growth as they used to.

April 10, 2017

Financial Crises and the Desirability of Macroprudential Policy

The global financial crisis has put financial stability risks—and the potential role of macroprudential policies in addressing them—at the forefront of policy debates. The challenge for macroeconomists is to develop new models that are consistent with the data while being able to capture the highly nonlinear nature of crisis episodes. In this post, we evaluate the impact of a macroprudential policy that has the government tilt incentives for banks to encourage them to build up their equity positions. The government has a role since individual banks do not internalize the systemic benefit of having more bank equity. Our model allows for an evaluation of the tradeoff between the size of such incentives and the probability of a future financial crisis

April 5, 2017

How Do People Find Jobs?

Most people find themselves looking for work at some point in their adult lives. But what brings employers and job seekers together? And does searching for a new job while unemployed lead to different outcomes than searching while employed?

Posted at 7:00 am in Labor Economics, Macroecon | Permalink | Comments (0)
April 3, 2017

Diplomas to Doorsteps: Education, Student Debt, and Homeownership

Evidence overwhelmingly shows that the average earnings premium to having a college education is high and has risen over the past several decades, in part because of a decline in real average earnings for those without a college degree.

At the N.Y. Fed: Press Briefing on Household Borrowing with Close-Up on Student Debt

An examination of recent developments in household borrowing was the focus of a press briefing held this morning at the New York Fed.

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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.

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