Liberty Street Economics
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.

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 Macroecon | Permalink | Comments (0)
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.

November 8, 2019

At the New York Fed: Fifth Annual Conference on the U.S. Treasury Market

The New York Fed recently co-sponsored the fifth annual Conference on the U.S. Treasury Market with the U.S. Department of the Treasury, the Federal Reserve Board, the U.S. Securities and Exchange Commission, and the U.S. Commodity Futures Trading Commission. This year’s agenda covered a variety of topics, including issues related to LIBOR transition, data transparency and reporting requirements, and market structure and risk.

Posted at 6:59 am in Financial Markets | Permalink | Comments (0)
November 6, 2019

Trade Policy Uncertainty May Affect the Organization of Firms’ Supply Chains

Global trade policy uncertainty has increased significantly, largely because of a changing tariff regime between the United States and China. In this blog post, we argue that trade policy can have a significant effect on firms’ organization of supply chains. When the probability of a trade war rises, firms become less likely to form long-term, just-in-time relationships with foreign suppliers, which may lead to higher costs and welfare losses for consumers. Our research shows that even in the absence of actual tariff changes, an increased likelihood of a trade war can significantly distort U.S. imports.

November 4, 2019

Since the Financial Crisis, Aggregate Payments Have Co-moved with Aggregate Reserves. Why?

Thomas Eisenbach, Kyra Frye, and Helene Hall take a look at what is driving the strong co-movement between aggregate payments sent over Fedwire and total aggregate reserves following the financial crisis.

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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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