Liberty Street Economics

Look for our next post on January 28, 2022.

December 17, 2021

Just Released: A New Tool for Tracking Regional Employment Trends

Jaison R. Abel, Jason Bram, Richard Deitz, and Jonathan Hastings

Today we are launching a Regional Employment web interactive that gives users a convenient place to measure and analyze employment trends in the Federal Reserve’s Second District. The interactive features the New York Fed’s early benchmarked regional employment data, which anticipate revisions that are made to official preliminary data released by the Bureau of Labor Statistics at a later date, and so tend to track employment trends more closely than initial monthly releases. The new interactive illustrates employment trends for more than twenty geographies in the region, including states and metropolitan areas, from the year 2000 to the latest available month.

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Posted at 1:00 pm | Permalink | Comments (0)

The Region Is Struggling to Recover from the Pandemic Recession

Jaison R. Abel, Jason Bram, Richard Deitz, and Jonathan Hastings

The pandemic struck the New York-Northern New Jersey region early and hard, and the economy is still struggling to recover nearly two years later. Indeed, employment fell by 20 percent in New York City as the pandemic took hold, a significantly sharper decline than for the nation as a whole, and the rest of the region wasn’t far behind, creating a much larger hole to dig out of than other parts of the country. While the region saw significant growth as the economy began to heal, growth has slowed noticeably, and job shortfalls—that is, the amount by which employment remains below pre-pandemic levels—are some of the largest in the nation. Among major metro areas, job shortfalls in New York City, Buffalo, and Syracuse rank among the five worst in the country. Thus, despite much progress, the region is struggling to recover from the pandemic recession. By contrast, employment has rebounded above pre-pandemic levels in Puerto Rico, reaching a five-year high.

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Posted at 11:00 am in Crisis, Labor Market, New Jersey, New York, New York City, Pandemic, Recession, Unemployment | Permalink | Comments (0)

The New York Fed DSGE Model Forecast—December 2021

Marco Del Negro, Aidan Gleich, Shlok Goyal, Alissa Johnson, and Andrea Tambalotti

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 2021.

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Posted at 9:00 am in Forecasting, Macroecon | Permalink | Comments (0)
December 3, 2021

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

Michael Fleming, Frank Keane, and Daniel Weitz

On November 17, 2021, the New York Fed hosted the seventh annual Conference on the U.S. Treasury Market. The one-day event, held virtually, was co-sponsored by the U.S. Department of the Treasury, the Federal Reserve Board, the U.S. Securities and Exchange Commission (SEC), and the U.S. Commodity Futures Trading Commission (CFTC). The agenda featured one panel on the effects of sudden changes in investor positioning, and two panels discussing proposals to strengthen Treasury market resiliency and improve market intermediation from various public and private sector perspectives. Speeches touched on recommendations from a recent progress report by the Inter-Agency Working Group for Treasury Market Surveillance (IAWG), and efforts to improve market resilience by reforming market structure and regulation. Finally, a fireside chat discussed the importance of increasing diversity of experiences and perspectives within the public and private sectors.

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Posted at 7:00 am in Federal Reserve, Financial Markets, Treasury | Permalink | Comments (0)
December 1, 2021

Why Central Bank Digital Currencies?

Raphael Auer, Jon Frost, Michael Lee, Antoine Martin, and Neha Narula

In the past year, a number of central banks have stepped up work on central bank digital currencies (CBDCs – see map). For central banks, are CBDCs just a defensive reaction to private-sector innovations in money, or are they an opportunity for the monetary system? In this post, we consider several long-standing goals of central banks in their support and provision of retail payments, why and how central banks tackle these issues, and where CBDCs fit into the array of potential solutions.

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Posted at 7:00 am in Central Bank, Cryptocurrencies, Currency | Permalink | Comments (0)
November 24, 2021

The Term Spread as a Predictor of Financial Instability

Dean Parker and Moritz Schularick

The term spread is the difference between interest rates on short- and long-dated government securities. It is often referred to as a predictor of the business cycle. In particular, inversions of the yield curve—a negative term spread—are considered an early warning sign. Such inversions typically receive a lot of attention in policy debates when they […]

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Posted at 7:00 am in Crisis, Financial Intermediation, Forecasting, Monetary Policy | Permalink | Comments (0)
November 23, 2021

Is Higher Financial Stress Lurking around the Corner for China?

Jan J. J. Groen and Adam I. Noble

Despite China’s tighter financial policies and the Evergrande troubles, Chinese financial stress measures have been remarkably stable around average levels. Chinese financial conditions, though, are affected by global markets, making it likely that low foreign financial stress conditions are blurring the state of Chinese financial markets. In this post, we parse out the domestic component of a Chinese financial stress measure to evaluate the downside risk to future economic activity.

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Posted at 7:00 am in Financial Markets, International Economics, Macroecon | Permalink | Comments (3)
November 22, 2021

Preemptive Runs and the Offshore U.S. Dollar Money Market Funds Industry

Marco Cipriani and Gabriele La Spada

In March 2020, U.S. dollar-denominated prime money market funds (MMFs) suffered heavy outflows as concerns about the COVID-19 pandemic increased in the United States and Europe. Investors redeemed their shares en masse not only from funds domiciled in the United States (“domestic”) but also from offshore funds. In this post, we use differences in the regulatory regimes of domestic and offshore funds to identify the impact of the redemption gates and liquidity fees recently introduced as part of MMF industry reforms in both the United States and Europe.

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Posted at 7:00 am in Financial Intermediation, Pandemic, Regulation | Permalink | Comments (0)
November 17, 2021

The Role of Educational Attainment in Household Debt and Delinquency Disparities

Ruchi Avtar, Rajashri Chakrabarti, and Kasey Chatterji-Len

This post concludes a three-part series exploring the gender, racial, and educational disparities of debt outcomes of college students. In the previous two posts, we examined how debt holding and delinquency behaviors vary among students of different race and gender, breaking up our analyses by level of degree pursued by the student. We found that Black and Hispanic students were less likely than white students to take on credit card debt, auto loans, and mortgage debt, but experienced higher rates of delinquency in each of these debt areas by the age of 30. In contrast, Black students were more likely to take out student debt and both Black and Hispanic students experienced higher rates of student debt delinquency. We found that Asian students broadly followed reverse patterns from Black and Hispanic students by age 30. They were more likely than white students to acquire mortgages and less likely to hold student debt, but their delinquency patterns were in general similar to those of white students. Women were less likely to hold an auto loan or mortgage and more likely to hold student debt by age 30, and in most cases their delinquency outcomes were indistinguishable from males. In this post, we seek to understand mechanisms behind these racial and gender disparities and examine the role of educational attainment in explaining these patterns.

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Posted at 6:02 am in Demographics, Education, Household Finance, Inequality, New York City | Permalink | Comments (0)

Unequal Distribution of Delinquencies by Gender, Race, and Education

Ruchi Avtar, Rajashri Chakrabarti, and Kasey Chatterji-Len

This post is the second in a three-part series exploring racial, gender, and educational differences in household debt outcomes. In the first post, we examined how the propensity to take out household debt and loan amounts varied among students by race, gender, and education level, finding notable differences across all of these dimensions. Were these disparities in debt behavior by gender, race, and education level associated with differences in financial stress, as captured by delinquencies? This post focuses on this question.

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Posted at 6:01 am in Demographics, Education, Household Finance, Inequality, Labor Market | Permalink | Comments (0)
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