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49 posts on "Expectations"

November 18, 2016

Just Released: Press Briefing on the Survey of Consumer Expectations



LSE_Just Released: Press Briefing on the Survey of Consumer Expectations

The New York Fed’s Survey of Consumer Expectations (SCE) collects information on household heads’ economic expectations and behavior. In particular, the survey covers respondents’ views on how inflation, spending, credit access, and the housing and labor markets will evolve over time. The SCE yields important insights that inform our monetary policy decisions. This morning, President Dudley joined New York Fed economists to brief the press on the design of the SCE and the latest releases of survey results. President Dudley introduced the briefing by speaking about the benefits of measuring consumers’ expectations.

Continue reading "Just Released: Press Briefing on the Survey of Consumer Expectations" »

November 14, 2016

Inflation and Japan’s Ever-Tightening Labor Market



LSE_Inflation_japan_tightening_labor_market_iStock_16873820_460x288

Japan offers a preview of future U.S. demographic trends, having already seen a large increase in the population over 65. So, how has the Japanese economy dealt with this change? A look at the data shows that women of all ages have been pulled into the labor force and that more people are working longer. This transformation of the work force has not been enough to prevent a very tight labor market in a slowly growing economy, and it may help explain why inflation remains minimal. Namely, wages are not responding as much as they might to the tight labor market because women and older workers tend to have lower bargaining power than prime-age males.

Continue reading "Inflation and Japan’s Ever-Tightening Labor Market" »

November 09, 2016

Performance Bonds for Bankers: Taking Aim at Misconduct



LSE_Performance_bonds_for_bankers_iStock_671704_460x288

Given the long list of problems that have emerged in banks over the past several years, it is time to consider performance bonds for bankers. Performance bonds are used to ensure that appropriate actions are taken by a party when monitoring or enforcement is expensive. A simple example is a security deposit on an apartment rental. The risk of losing the deposit motivates renters to take care of the apartment, relieving the landlord of the need to monitor the premises. Although not quite as simple as a security deposit, performance bonds for bankers could provide more incentive for bankers to take better care of our financial system.

Continue reading "Performance Bonds for Bankers: Taking Aim at Misconduct" »

October 19, 2016

Lower Manhattan since 9/11: A Study in Resilience

Jason Bram and Joelle Scally

LSE_Lower Manhattan since 9/11: A Study in Resilience

The 9/11 terrorist attack on the World Trade Center left a deep scar on New York City and the nation, most particularly in terms of the human toll. In addition to the lives lost and widespread health problems suffered by many others—in particular by first responders and recovery workers—the destruction of billions of dollars’ worth of property and infrastructure led to severe disruptions to the local economy. Nowhere were these disruptions more severe and long-lasting than in the neighborhoods closest to Ground Zero.

Continue reading "Lower Manhattan since 9/11: A Study in Resilience" »

Posted by Blog Author at 10:00 AM in Employment, Expectations, New York City, Regional Analysis | Permalink | Comments (0)

September 30, 2016

From the Vault: Does Forward Guidance Work?



In recent months, there have been some high-profile assessments of how far the Federal Reserve has come in terms of communicating about monetary policy since its “secrets of the temple” days. While observers say the transition to greater transparency “still seems to be a work in progress,” they note the range of steps the Fed has taken over the years to shed light on its strategy, including issuing statements to announce and explain policy changes following Federal Open Market Committee (FOMC) meetings, post-meeting press conferences and minutes, FOMC-member speeches and testimony, and “forward guidance” in all its variants.

Continue reading "From the Vault: Does Forward Guidance Work?" »

Posted by Blog Author at 7:00 AM in DSGE, Expectations, Fed Funds, Forecasting, Inflation, Treasury | Permalink | Comments (2)

September 28, 2016

U.S. Real Wage Growth: Slowing Down With Age



LSE_U.S. Real Wage Growth: Slowing Down With Age

Second of two posts
In Monday’s post, we described the estimation of real wage growth rates for different cohorts of U.S. workers. We showed that the life-cycle pattern of real wage growth is characterized by high growth early in a worker’s career, little to no growth in mid-career, and negative growth as workers near retirement. We also documented that a growing fraction of the U.S. adult population is transitioning into the flat to negative real wage growth phases of their careers. Here, we turn our attention to estimating the effect of this demographic shift on the economy-wide average real wage growth rate. Our analysis shows that this economy-wide average real wage growth rate has declined by a third since the mid-1980s.

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Posted by Blog Author at 7:00 AM in Demographics, Employment, Expectations, Unemployment, Wages | Permalink | Comments (2)

September 09, 2016

Who Falters at Student Loan Payback Time?



Editor’s note: The labels for “Elite private” and “Non-elite private, not-for-profit” institutions in the charts have been corrected; they were initially transposed. We regret the error. (September 12, 12:45 p.m.)

LSE_2016_Who Falters at Student Loan Payback Time?

This is the final post in a four-part series examining the evolution of enrollment, student loans, graduation and default in the higher education market over the course of the past fifteen years. In the first post, we found a marked increase in enrollment of 35 percent between 2000 and 2015, led mostly by the for-profit sector—which increased enrollment by 177 percent. The second post showed that these new enrollees were quite different from the traditional enrollees. Yesterday’s post demonstrated an unprecedented increase in loan origination amounts during this period—nearly tripling between 2000 and 2015. This surge was driven most prominently by a massive increase in the number of borrowers in the public community college sector and the private for-profit college sector. Given the large increase in the borrower pool and loan originations, it is paramount to understand the consequences of these changes for the student loan default rate. This post aims to do just that. We focus on three-year cohort default rates reported by the United States Department of Education. The three-year cohort default rate is defined as the percentage of a school's borrowers who enter repayment during a particular federal fiscal year—running from October 1 to September 30—and default prior to the end of the second following fiscal year. Most federal loans enter default when payments are more than 270 days past due.

Continue reading "Who Falters at Student Loan Payback Time?" »

Posted by Blog Author at 7:02 AM in Education, Expectations, Labor Economics, Student Loans | Permalink | Comments (0)

August 22, 2016

How Do People Revise Their Inflation Expectations?



LSE_How Do People Revise Their Inflation Expectations?

The New York Fed started releasing results from its Survey of Consumer Expectations (SCE) three years ago, in June 2013. The SCE is a monthly, nationally representative, internet-based survey of a rotating panel of about 1,300 household heads. Its goal, as described in a series of Liberty Street Economics posts, is to collect timely and high-quality information on consumer expectations about a broad range of topics, covering both macroeconomic variables and the households' own situation. In this post, we look at what drives changes in consumer inflation expectations. Do people respond to changes in recent realized inflation, and to expected and realized changes in prices of salient individual commodities—like gasoline? Understanding what drives inflation expectations is important for the conduct of monetary policy, since it improves a central bank’s ability to assess its own credibility and to evaluate the impact of its policy decisions and communication strategy.

Continue reading "How Do People Revise Their Inflation Expectations?" »

Posted by Blog Author at 7:00 AM in Expectations, Household Finance, Inflation | Permalink | Comments (0)

July 18, 2016

Forecasting Interest Rates over the Long Run



LSE_Forecasting Interest Rates over the Long Run

In a previous post, we showed how market rates on U.S. Treasuries violate the expectations hypothesis because of time-varying risk premia. In this post, we provide evidence that term structure models have outperformed direct market-based measures in forecasting interest rates. This suggests that term structure models can play a role in long-run planning for public policy objectives such as assessing the viability of Social Security.

Continue reading "Forecasting Interest Rates over the Long Run" »

June 02, 2016

Just Released: 2016 SCE Housing Survey Shows Modest Decline in Home Price Expectations



LSE_2016 SCE Housing Survey Shows Modest Decline in Home Price Expectations

The Federal Reserve Bank of New York’s 2016 SCE Housing Survey indicates that home price growth expectations have declined somewhat relative to last year, but the majority of households still view housing as a good financial investment. Mortgage rate expectations have also declined since last year’s survey, and renters now perceive that it has become somewhat less difficult to get a mortgage if they wanted to buy a home.

Continue reading "Just Released: 2016 SCE Housing Survey Shows Modest Decline in Home Price Expectations" »

Posted by Blog Author at 11:00 AM in Expectations, Housing | Permalink | Comments (0)
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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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