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56 posts on "Pandemic"

June 17, 2020

Did State Reopenings Increase Social Interactions?



Did State Reopenings Increase Social Interactions?

Social distancing—avoiding nonessential movement and largely staying at home—is seen as key to limiting the spread of COVID-19. To promote social distancing, over forty states imposed shelter-in-place or stay-at-home orders, closing nonessential businesses, banning large gatherings, and encouraging citizens to stay home. Over the course of the last month, virtually all of these states have reopened. However, these reopenings were preceded by a spontaneous increase in mobility and decline in social distancing. Did the reopenings decrease social distancing, or did it ratify ex post what was already going to take place? In this post, we will investigate this question using an event study methodology and demonstrate that reopenings probably have caused a large decline in social distancing, even after accounting for the trends already in place at the time of reopening.

Continue reading "Did State Reopenings Increase Social Interactions?" »

Posted by Blog Author at 7:00 AM in Crisis, Economic History, Expectations, Pandemic | Permalink | Comments (0)

June 16, 2020

Finally, Some Signs of Improvement in the Regional Economy



LSE_2020_jr-econ-improvement_deitz_460

The Federal Reserve Bank of New York’s June business surveys show some signs of improvement in the regional economy. Following two months of unprecedented decline due to the coronavirus pandemic, indicators of business activity point to a slower pace of contraction in the service sector and signs of a rebound in the manufacturing sector. Even more encouraging, as the regional economy has begun to reopen, many businesses have started to recall workers who were laid off or put on furlough since the start of the pandemic. Some have even hired new workers. Moreover, businesses expect to recall even more workers over the next month. Looking ahead, firms have become increasingly optimistic that conditions will improve in the coming months.

Continue reading "Finally, Some Signs of Improvement in the Regional Economy" »

Outflows from Bank-Loan Funds during COVID-19



The COVID-19 pandemic has put significant pressure on debt markets, especially those populated by riskier borrowers. The leveraged loan market, in particular, came under remarkable stress during the month of March. Bank-loan mutual funds, among the main holders of leveraged loans, suffered massive outflows that were reminiscent of the outflows they experienced during the 2008 crisis. In this post, we show that the flow sensitivity of the loan-fund industry to the COVID-19 crisis (and to negative shocks more generally) seems to be even greater than that of high-yield bond funds, which also invest in high-risk debt securities and have received much attention because of their possible exposure to run-like behavior by investors and their implications for financial stability.

Continue reading "Outflows from Bank-Loan Funds during COVID-19" »

June 15, 2020

Distribution of COVID-19 Incidence by Geography, Race, and Income



Distribution of COVID-19 Incidence by Geography, Race, and Income

In this post, we study whether (and how) the spread of COVID-19 across the United States has varied by geography, race, income, and population density. Have urban areas been more affected by COVID-19 than rural areas? Has population density mattered in the spread? Has the coronavirus's impact varied by race and income? Our analysis uncovers stark demographic and geographic differences in the effects of the pandemic thus far.

Continue reading "Distribution of COVID-19 Incidence by Geography, Race, and Income" »

Posted by Blog Author at 7:00 AM in Demographics, Inequality, Pandemic, Regional Analysis | Permalink | Comments (0)

June 12, 2020

How Fed Swap Lines Supported the U.S. Corporate Credit Market amid COVID-19 Strains



The onset of the COVID-19 shock in March 2020 brought large changes to the balance sheets of the U.S. branches of foreign banking organizations (FBOs). Most of these branches saw sizable usage of committed credit lines by U.S.-based clients, resulting in increased funding needs. In this post, we show that branches of FBOs from countries whose central banks used standing swap lines with the Federal Reserve (“standing swap central banks”—SSCBs) met their increased funding needs by accessing dollars that flowed into the United States through their foreign parent banks. This volume of dollar inflows accounted for at least half of the late March aggregate take-up at SSCB dollar operations.

Continue reading "How Fed Swap Lines Supported the U.S. Corporate Credit Market amid COVID-19 Strains" »

May 29, 2020

Which Workers Bear the Burden of Social Distancing Policies?



Which Workers Bear the Burden of Social Distancing Policies?

In the wake of the coronavirus outbreak, nearly all U.S. states imposed social distancing policies to combat the spread of illness. To the extent that work can be done from home, some workers moved their offices to their abodes. Others, however, are unable to continue working as their usual tasks require a specific location or environment, or involve close proximity to others. Which types of jobs cannot be done from home and which types of jobs require close personal proximity to others? What share of overall U.S. employment falls in these categories? And, given that these jobs will be the most adversely affected, what are the characteristics of workers employed in these jobs? The final question is of particular importance as the government designs and implements policies aimed at helping the workers hardest hit by the pandemic.

Continue reading "Which Workers Bear the Burden of Social Distancing Policies?" »

Posted by Blog Author at 10:01 AM in Labor Economics, Pandemic | Permalink | Comments (0)

May 27, 2020

Job Training Mismatch and the COVID-19 Recovery: A Cautionary Note from the Great Recession



LSE_Job Training Mismatch and the COVID-19 Recovery: A Cautionary Note from the Great Recession


Displaced workers have been shown to endure persistent losses years beyond their initial job separation events. These losses are especially amplified during recessions. (1) One explanation for greater persistence in downturns relative to booms, is that firms and industries on the margin of structural change permanently shift the types of tasks and occupations demanded after a large negative shock (Aghion et al. (2005)), but these new occupations do not match the stock of human capital held by those currently displaced. In response to COVID-19, firms with products and services that complement social-distancing (like Amazon distribution centers) may continue hiring during and beyond the recovery, while workers displaced from higher risk industries with more stagnant demand (for example, airport personnel, local retail clerks) are left to adjust to less familiar job opportunities. As some industries reopen gradually while others remain stunted, what role might workforce development programs have in bridging the skill gap such that displaced workers are best prepared for this new reality of work?

Continue reading "Job Training Mismatch and the COVID-19 Recovery: A Cautionary Note from the Great Recession" »

May 26, 2020

Consumers Increasingly Expect Additional Government Support amid COVID-19 Pandemic



Consumers Increasingly Expect Additional Government Support amid COVID-19 Pandemic

The New York Fed’s Center for Microeconomic Data released results today from its April 2020 SCE Public Policy Survey, which provides information on consumers' expectations regarding future changes to a wide range of fiscal and social insurance policies and the potential impact of these changes on their households. These data have been collected every four months since October 2015 as part of our Survey of Consumer Expectations (SCE). Given the ongoing COVID-19 pandemic, households face significant uncertainty about their personal situations and the general economic environment when forming plans and making decisions. Tracking individuals’ subjective beliefs about future government policy changes is important for understanding and predicting their behavior in terms of spending and labor supply, which will be crucial in forecasting the economic recovery in the months ahead.

Continue reading "Consumers Increasingly Expect Additional Government Support amid COVID-19 Pandemic" »

Posted by Blog Author at 11:00 AM in Expectations, Fiscal Policy, Pandemic, Unemployment | Permalink | Comments (0)

The Primary and Secondary Market Corporate Credit Facilities



LSE_https://libertystreeteconomics.newyorkfed.org/2020/05/the-primary-and-secondary-market-corporate-credit-facilities.html

This post is part of an ongoing series on the credit and liquidity facilities established by the Federal Reserve to support households and businesses during the COVID-19 outbreak.

On April 9, the Federal Reserve announced that it would take additional actions to provide up to $2.3 trillion in loans to support the economy in response to the coronavirus pandemic. Among the initiatives are the Primary Market and Secondary Market Corporate Credit Facilities (PMCCF and SMCCF), whose intent is to provide support for large U.S. businesses that typically finance themselves by issuing debt in capital markets. Corporate bonds support the operations of companies with more than 17 million employees based in the United States and these bonds are key assets for retirees and pension funds. If companies are unable to issue corporate bonds, they may be unable to invest in inventory and equipment, meet current liabilities, or pay employees. Maintaining access to credit is thus crucially important during the COVID‑19 pandemic, both for issuing companies and for their employees. This post documents the dislocations in the corporate bond market that have motivated the creation of these facilities and explains how we expect these facilities to support U.S. businesses and their employees both through the COVID‑related disruptions and beyond, when the economy recovers.

Continue reading "The Primary and Secondary Market Corporate Credit Facilities" »

Posted by Blog Author at 7:00 AM in Financial Institutions, Financial Markets, Pandemic | Permalink | Comments (0)

May 22, 2020

Have the Fed Swap Lines Reduced Dollar Funding Strains during the COVID-19 Outbreak?



LSE_Have the Fed Swap Lines Reduced Dollar Funding Strains during the COVID-19 Outbreak?

In March 2020, the Federal Open Market Committee (FOMC) made changes to its swap line facilities with foreign central banks to enhance the provision of dollars to global funding markets. Because the dollar has important roles in international trade and financial markets, reducing these strains helps facilitate the supply of credit to households and businesses, both domestically and abroad. This post summarizes the changes made to central bank swap lines and shows when these changes were effective at bringing down dollar funding strains abroad.

Continue reading "Have the Fed Swap Lines Reduced Dollar Funding Strains during the COVID-19 Outbreak?" »

Posted by Blog Author at 7:00 AM in Central Bank, Crisis, Currency, Pandemic | Permalink | Comments (1)
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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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