The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
Matthew Higgins, Thomas Klitgaard, and Michael Nattinger
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.
Richard K. Crump, David O. Lucca, and Casey McQuillan
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.
Andrew F. Haughwout, Donghoon Lee, Joelle Scally, and Wilbert van der Klaauw
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.
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.
Michael J. Fleming, Peter Johansson, Frank M. Keane, and Justin Meyer
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.
Sebastian Heise, Justin R. Pierce, Georg Schaur, and Peter K. Schott
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.
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.
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.
The editors are Michael Fleming, Andrew Haughwout, Thomas Klitgaard, and Asani Sarkar, all economists in the Bank’s Research Group.
Liberty Street Economics does not publish new posts during the blackout periods surrounding Federal Open Market Committee meetings.
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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