89 posts from "2019"
December 20, 2019
The New York Fed DSGE Model Forecast—December 2019
This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since September 2019. As usual, we wish to remind our readers that the DSGE model forecast is not an official New York Fed forecast, but only an input to the Research staff’s overall forecasting process. For more information about the model and variables discussed here, see our DSGE model Q & A.
December 18, 2019
Banking System Vulnerability: Annual Update
A key part of understanding the stability of the U.S. financial system is to monitor leverage and funding risks in the financial sector and the way in which these vulnerabilities interact to amplify negative shocks. In this post, we provide an update of four analytical models, introduced in a Liberty Street Economics post last year, that aim to capture different aspects of banking system vulnerability.
Posted at 7:00 am in Bank Capital, Banks, Financial Institutions, Financial Intermediation, Liquidity, Systemic Risk | Permalink
December 17, 2019
Growth Has Slowed across the Region
At today’s regional economic press briefing, we highlighted some recent softening in the tri-state regional economy (New York, Northern New Jersey, and Fairfield County, Connecticut)—a noteworthy contrast from our briefing a year ago, when economic growth and job creation were fairly brisk. We also showed that Puerto Rico and the U.S. Virgin Islands, which are part of the New York Fed’s district, both continue to face major challenges but have made significant economic progress following the catastrophic hurricanes of 2017.
December 16, 2019
Selection in Banking
Over the past thirty years, more than 2,900 U.S. banks have transformed from pure depository institutions into conglomerates involved in a broad range of business activities. What type of banks choose to become conglomerate organizations? In this post, we document that, from 1986 to 2018, such institutions had, on average, a higher return on equity in the three years prior to their decision to expand, as well as a lower level of risk overall. However, this superior pre-expansion performance diminishes over time, and all but disappears by the end of the 1990s.
December 13, 2019
Tariffs, Auto Loans, Rising College Costs, and Other Top LSE Posts of 2019
At year end, we look back at the top five most-read Liberty Street Economics posts of 2019.
November 25, 2019
Who Pays the Tax on Imports from China?
Tariffs , of little interest for decades, are again becoming relevant given the increase in the levies charged on Chinese imports. U.S. businesses and consumers are shielded from higher tariffs to the extent that Chinese firms lower their dollar-denominated prices. However, data indicate that prices on goods from China are not falling. As a result, U.S. firms and consumers are paying the tax.
November 20, 2019
Monetary Policy Transmission and the Size of the Money Market Fund Industry
Assets under management (AUM) of retail money market funds (MMF) have soared during monetary policy tightening episodes, lagging the spread between MMF yields and CD rates.
Posted at 7:00 am in Federal Reserve, Financial Institutions, Financial Intermediation, Monetary Policy | Permalink | Comments (4)
November 18, 2019
Real Inventory Slowdowns
Inventory investment plays a central role in business cycle fluctuations. This post examines whether inventory investment amplifies or dampens economic fluctuations following a tightening in financial conditions. We find evidence supporting an amplification mechanism. This analysis suggests that inventory accumulation will be a drag on economic activity this year but provide a boost in 2020.
Posted at 7:00 am in Macroeconomics | Permalink
November 13, 2019
Just Released: Racial Disparities in Student Loan Outcomes
A $20 billion rise in student loan balances in the third quarter of this year contributed to a $92 billion increase in total household debt, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. This post explores racial disparities in student loan outcomes using information about the borrowers’ locations, grouping zip codes based upon which racial group constitutes the majority of an area’s residents.
The Side Effects of Shadow Banking on Liquidity Provision
Over the past two decades, the growth of shadow banking has transformed the way the U.S. banking system funds corporations. In this post, we describe how this growth has affected both the term loan and credit line businesses, and how the changes have resulted in a reduction in the liquidity insurance provided to firms.
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