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.
October 19, 2016
October 17, 2016
What Caused the Decline in Interstate Migration in the United States?
Geographic mobility is thought to be important both for economic mobility and for the efficiency of a labor market in allocating the right people to the right jobs. Accordingly, the willingness of the U.S. workforce to move is a factor behind the greater dynamism of the U.S. labor market compared to Europe. While Europeans tend to be more reluctant to move to distant places within their respective countries, the idea of moving across state borders for a job has been woven into the fabric of the American Dream. However, the image of the United States as a mobile nation has changed substantially over recent decades. This post investigates the role that demographic shifts—in particular, the nation’s aging population—have played in the recent decline in interstate migration.
October 14, 2016
Historical Echoes: The Bank Teller Action Figure, or It’s All in the Packaging
This is a story about a humorous bank ad that morphed into a promotional campaign. It’s a tale that shares themes with four previous Historical Echoes posts about Barbie, bank promotions, and bank tellers.
October 12, 2016
Let the Light In: How Financial Reporting and Transparency Improve Corporate Governance
Financial reporting is valuable because corporate governance—which we view as the set of contracts that help align managers’ interests with those of shareholders—can be more efficient when the parties commit themselves to a more transparent information environment. This is a key theme in our article The Role of Financial Reporting and Transparency in Corporate Governance, which reviews recent literature on the part played by financial reporting in resolving agency conflicts among managers, directors, and shareholders. In this post, we highlight some of the governance issues and recommendations discussed in the article, and we focus on how information asymmetries can create agency conflicts.
October 7, 2016
At the N.Y. Fed: Workshops and New Research on Improving Bank Culture and Governance
The New York Fed takes bank culture and governance seriously. As Bank President William Dudley said at a 2014 workshop convening policymakers and industry participants improving the culture and governance of banks is “an imperative,” both to ensure financial stability and to deepen public trust in our financial system. The Bank built on that first workshop with a second in November 2015 and will host a third event later this month, on October 20.
October 5, 2016
Why Did the Recent Oil Price Declines Affect Bond Prices of Non‑Energy Companies?
Oil prices plunged 65 percent between July 2014 and December of the following year. During this period, the yield spread—the yield of a corporate bond minus the yield of a Treasury bond of the same maturity—of energy companies shot up, indicating increased credit risk. Surprisingly, the yield spread of non‑energy firms also rose even though many non‑energy firms might be expected to benefit from lower energy‑related costs. In this blog post, we examine this counterintuitive result. We find evidence of a liquidity spillover, whereby the bonds of more liquid non‑energy firms had to be sold to satisfy investors who withdrew from bond funds in response to falling energy prices.
Posted at 7:00 am in Corporate Finance, Credit, Financial Markets, Inflation, Liquidity, Treasury, Unemployment | Permalink
October 3, 2016
Fear of $10 Billion
Ten billion has become a big number in banking since the Dodd-Frank Act of 2010. When banks’ assets exceed that threshold, they face considerably heightened supervision and regulation, including exams by the Consumer Financial Protection Bureau, caps on interchange fees, and annual stress tests. There are plenty of anecdotes about banks avoiding the $10 billion threshold or waiting to cross with a big merger, but we’ve seen no systematic evidence of this avoidance behavior. We provide some supporting evidence below and then discuss the implications for size-based bank regulation—where compliance costs ratchet up with size—more generally.
Posted at 7:00 am in Financial Institutions | Permalink
September 30, 2016
From the Vault: Does Forward Guidance Work?
This post takes a look at research assessing the effectiveness of forward guidance in monetary policy communications.
September 28, 2016
U.S. Real Wage Growth: Slowing Down With Age
In Monday’s post, we described the estimation of real wage growth rates for different cohorts of U.S. workers. Here, we turn our attention to estimating the effect of this demographic shift on the economy-wide average real wage growth rate.
September 26, 2016
U.S. Real Wage Growth: Fast Out of the Starting Blocks
Much has been written about the aging of the U.S. population, but the importance of this trend for the economy and its evolution can easily be overlooked. This week, we focus on the aging of the labor force and explore its implications for the behavior of real wage growth.
Posted at 7:00 am | Permalink
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