Recent Research

Does the Recent Decline in Household Longer-Term Inflation Expectations Signal a Loss of Confidence in the FOMC?

By A. Lee Smith, Brent Bundick, Trenton Herriford and Emily Pollard THE MACRO BULLETINHouseholds have lowered their longer-term inflation outlooks, but they appear confident in the FOMC’s ability to achieve stable prices.

Competition and Bank Fragility

By W. Blake Marsh and Rajdeep Sengupta RESEARCH WORKING PAPERThe buildup in commercial real estate loan concentration and the consequent fragility in small U.S. banks can be traced to an increase in large bank competition following interstate deregulation.

Response of Consumer Debt to Income Shocks: The Case of Energy Booms and Busts

By Jason P. Brown RESEARCH WORKING PAPEREach oil and gas well drilled from 2007 to 2015 generated nearly $7,000 in additional consumer debt in areas with drilling for an implied total of $2.7 billion or 0.5 percent of U.S. consumer debt.

Forecasting the Stance of Monetary Policy under Balance Sheet Adjustments

By Troy Davig and A. Lee Smith THE MACRO BULLETINChanges in the Federal Reserve’s balance sheet only modestly substitute for changes in the federal funds rate.

Managing Fraud in Remote Payments

By Zach Markiewicz and Richard J. Sullivan PAYMENTS SYSTEM RESEARCH BRIEFINGFollowing the rollout of new chip cards and ongoing growth in e-commerce, merchants and policymakers are seeking ways to blunt a likely surge in remote payment fraud.

Communicating Monetary Policy Rules

By Troy Davig and Andrew Foerster RESEARCH WORKING PAPERA central bank can achieve the gains of a rule-based policy without publicly stating a specific rule by establishing an inflation target, tolerance bands around the target, and providing economic projections.

Assessing Differences in Labor Market Outcomes Across Race, Age, and Educational Attainment

By Economic Research Department RESEARCH WORKING PAPERBroad indicators are often used to evaluate the health of the labor market, though do not necessarily reflect large disparities that exist in outcomes across age, education, gender, and race.

Waiting for a Pickup: GDP and the Sharing Economy

By Michael Redmond THE MACRO BULLETINCurrent measures of GDP may understate the contributions from ridesharing platforms and other dimensions of the sharing economy—a small but growing oversight for the national accounts.

The Large Unmet Demand for Housing

By Jordan Rappaport THE MACRO BULLETINA limited supply of housing available for sale or rent is significantly dampening household formation.

Competition and Coordination: The Card Network Balancing Act

By Jesse Leigh Maniff PAYMENTS SYSTEM RESEARCH BRIEFINGAs payment card networks seek to balance the benefits of collaboration against allegations of anti-competitive behavior, efforts to improve payments security may be hindered by the threat of legal action.

Wage Leaders and Laggards: Decomposing the Growth in Average Hourly Earnings

By Willem Van Zandweghe THE MACRO BULLETINWage growth has accelerated gradually over the past two years, but only a few industries have driven the trend.

Banks Re-enter the P2P Payments Fray: With Mobile, Will this Time Be Different?

By Terri Bradford PAYMENTS SYSTEM RESEARCH BRIEFINGAfter coming up short against nonbanks in two previous rounds of the fray over P2P payments, banks appear to be poised to go toe-to-toe this time around.

Stuck in Part-Time Employment

By Jonathan L. Willis THE MACRO BULLETINAlthough the share of workers employed part time for economic reasons has declined, it is unlikely to return to its pre-recession level in the near future.

Student Loan Relief Programs: Implications for Borrowers and the Federal Government

By Kelly D. Edmiston and Wenhua Di RESEARCH WORKING PAPERStudent loan relief plans can help struggling borrowers stay current on their debt and benefit from substantial debt write-offs in as little as 10 years, but these plans can impose a significant fiscal burden on taxpayers.

Monetary Policy and Macroeconomic Stability Revisited

By Willem Van Zandweghe, Yasuo Hirose and Takushi Kurozumi RESEARCH WORKING PAPERThis paper revisits the question of how the Federal Reserve achieved macroeconomic stability after the Great Inflation of the 1970s.

Sectoral Loan Concentration and Bank Performance (2001-2014)

By Rajdeep Sengupta and Kristen Regehr RESEARCH WORKING PAPERSectoral loan concentration can influence the size-profitability relationship for banks and the likelihood of bank survival. Switching specializations increases the hazard of failure but decreases the odds of being acquired.

Consumer Price Inflation and Rising Rents in the West

By Jordan Rappaport and Michael Redmond THE MACRO BULLETINRising home rents in four western metros have increasingly boosted consumer price inflation.

Asset Ownership, Windfalls, and Income: Evidence from Oil and Gas Royalties

By Jason P. Brown, Timothy Fitzgerald and Jeremy G. Weber RESEARCH WORKING PAPERIn 2013, total oil and gas royalty-related income exceeded $64 billion. Each dollar in royalties generated an additional $0.52 of local income.

How Does a Rise in International Shipping Costs Affect U.S. Inflation?

By Nicholas Sly , A. Lee Smith, Trenton Herriford and Elizabeth M. Johnson THE MACRO BULLETINTrenton Herriford, Elizabeth M. Johnson, Nicholas Sly, and A. Lee Smith find that an increase in ocean shipping costs leads to a modest boost in core inflation after one year.

The Equilibrium Term Structure of Equity and Interest Rates

By Taeyoung Doh and Shu Wu RESEARCH WORKING PAPERDoh and Wu incorporate a time-varying market price of risk into an equilibrium asset-pricing model based on long-run consumption risks that generates the term structure of bond and equity risk premia consistent with U.S. data.

What is Behind the Recent Increase in Labor Force Participation?

By Didem Tuzemen and Jonathan L. Willis THE MACRO BULLETINDidem Tüzemen and Jonathan L. Willis find that the recent increase in labor force participation is due not to more workers entering the labor force, but to fewer workers exiting it.

The Multinational Wage Premium and Wage Dynamics

By Nicholas Sly , Gianluca Orefice and Farid Toubal RESEARCH WORKING PAPERMultinational firms often enter countries through cross-border mergers and acquisitions. For the domestic firms that are acquired, foreign ownership tends to reverse years of wage declines and even promote wage gains for employees.

Price Dispersion and Inflation Persistence

By Willem Van Zandweghe and Takushi Kurozumi RESEARCH WORKING PAPERThis paper proposes a model of monetary policy that relies on price dispersion to explain empirical evidence on inflation persistence.

The Weak Outlook for Residential Investment

By Jordan Rappaport
October 06, 2016
THE MACRO BULLETINJordan Rappaport suggests supply-side factors will continue to constrain single-family home construction and sales into 2017.

Do Bank Bailouts Reduce or Increase Systemic Risk? The Effects of TARP on Financial System Stability

By Raluca A. Roman, Allen N. Berger and John Sedunov RESEARCH WORKING PAPERThe TARP bailout significantly reduced contributions to systemic risk, particularly for large banks, safe banks, and banks located in strong local economies. These reductions occurred primarily through a capital cushion channel.

Global Uncertainty in the Wake of Brexit

By Craig S. Hakkio and Nicholas Sly THE MACRO BULLETINCraig S. Hakkio and Nicholas Sly find that increased global uncertainty after Brexit will be a major concern for the United Kingdom, a modest concern for the euro area, and a minor concern for the United States.

Optimal Monetary Policy Regime Switches

By Andrew Foerster and Jason Choi RESEARCH WORKING PAPERHow should monetary policy rules respond to shifts in the economy?

Recession Forecasting Using Bayesian Classification

By Troy Davig and Aaron Smalter Hall RESEARCH WORKING PAPERA new approach to recession forecasting outperforms competing methods up to 12 months in advance.

Tracking Consumer Credit Trends

By Troy Davig and William Xu THE MACRO BULLETINTroy Davig and William Xu find that a larger share of consumers with low credit scores are increasing their debt than those with high credit scores.

Raising Capital When the Going Gets Tough: U.S. Bank Equity Issuance from 2001 to 2014

By Rajdeep Sengupta, Lamont Black and Ioannis Floros RESEARCH WORKING PAPERBank equity issuance to private investors peaked during the crisis even as investor requirements grew more stringent.

The Drag of Energy and Manufacturing on Productivity Growth

By Willem Van Zandweghe THE MACRO BULLETINWillem Van Zandweghe finds a decline in manufacturing and mining activity has slowed overall productivity growth.

Monetary Policy at the Zero Lower Bound: Revelations from the Summary of Economic Projections

By George A. Kahn and Andrew Palmer THE MACRO BULLETINGeorge A. Kahn and Andrew Palmer assess how FOMC participants' projections that policy would lift off from its effective lower bound related to their projections for inflation and unemployment.

Flowing into Employment: Implications for the Participation Rate

By Jose Mustre-del-Río, Michael Redmond and William Xu THE MACRO BULLETINJosé Mustre-del-Río, Michael Redmond, and William Xu find more prime-age individuals are flowing into employment from outside the labor force, though effects on the participation rate could be limited by educational attainment.

Debt-Dependent Effects of Fiscal Expansions

By Huixin Bi, Wenyi Shen and Shu-Chun S. Yang RESEARCH WORKING PAPERThe effects of an increase in government spending are not necessarily debt-dependent—instead, they may depend on general economic conditions as well as whether the government stabilizes debt through taxes or spending.
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Economic Review

Bond Premiums and the Natural Real Rate of Interest

By Craig S. Hakkio and A. Lee Smith Craig S. Hakkio and A. Lee Smith find that bond premiums are an important determinant of the natural real rate of interest, or r*.

Crowdedness, Centralized Employment, and Multifamily Home Construction

By Jordan Rappaport

Jordan Rappaport finds factors related to population, population density, and centralized employment have driven much of the recent variation in multifamily construction across metros.

Additional files: Data Supplement

Identifying State-Level Recessions

By Jason P. Brown Jason P. Brown tests two approaches to determining whether states in the Tenth Federal Reserve District are in a recession.

Residential Rent Affordability across U.S. Metropolitan Areas

By Kelly D. Edmiston Kelly D. Edmiston examines recent trends in rent affordability for both low- and middle-income households and across metropolitan areas.

Enforcement Actions and Bank Loan Contracting

By Raluca A. Roman Raluca A. Roman finds that bank loans initiated after an enforcement action have lower interest rates than loans initiated before an enforcement action.

The Dispersion of Farmland Values in the Tenth District

By Cortney Cowley Cortney Cowley examines the widening dispersion of farmland values in the Tenth Federal Reserve District and finds that land quality, climate, and commodity sales have played important roles.

Consumer Spending in China: The Past and the Future

By Jun Nie and Andrew Palmer Jun Nie and Andrew Palmer examine the recent rise in the share of consumer spending in Chinese GDP to assess whether China can become a consumption-driven economy.

Measuring the Stance of Monetary Policy on and off the Zero Lower Bound

By Taeyoung Doh and Jason Choi

Taeyoung Doh and Jason Choi propose a new “shadow” short-term interest rate to measure the stance of policy when the federal funds rate was constrained by the zero lower bound.

Additional files: Data Supplement

Access to Electronic Payments Systems by Unbanked Consumers

By Fumiko Hayashi Fumiko Hayashi identifies electronic payment products that can mitigate unbanked consumers’ problems with the banking system.

Has the Relationship between Bank Size and Profitability Changed?

By Rajdeep Sengupta and Kristen Regehr Kristen Regehr and Rajdeep Sengupta explore whether the relationship between bank size and profitability changed after the 2007–09 financial crisis.

Consumption Growth Regimes and the Post-Financial Crisis Recovery

By Andrew Foerster and Jason Choi Andrew Foerster and Jason Choi find that consumption has grown more slowly after the Great Recession due to the continued influence of persistent factors unusual to see outside recessions.

Global Uncertainty and U.S. Exports

By Nicholas Sly Nicholas Sly finds that periods of greater uncertainty and financial volatility within U.S. trading partners are associated with substantially lower demand for U.S. goods. 

Monetary Policy at the Zero Lower Bound: Revelations from the FOMC's Summary of Economic Projections

By George A. Kahn and Andrew Palmer George A. Kahn and Andrew Palmer assess how FOMC participants' projections that policy would lift off from its effective lower bound related to their projections for inflation and unemployment. The article is summarized in The Macro Bulletin.

The Lasting Damage from the Financial Crisis to U.S. Productivity

By Michael Redmond and Willem Van Zandweghe Michael Redmond and Willem Van Zandweghe find that tight credit conditions during the 2007–09 financial crisis dampened productivity, leaving it on a lower trajectory. The article is summarized in The Macro Bulletin.

Data Breach Notification Laws

By Richard Sullivan and Jesse Leigh Maniff Richard J. Sullivan and Jesse Leigh Maniff study individual provisions within states' data breach notification laws to evaluate their effects on identity theft.

Estimating the Monetary Policy Rule Perceived by Forecasters

By Brent Bundick Brent Bundick examines whether the FOMC’s implicit monetary policy rule, as perceived by professional forecasters, changed when the federal funds rate reached its effective lower bound. The article is summarized in The Macro Bulletin.
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