The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
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Revisiting a previous post about risk aversion and global asset prices following former Chairman Bernanke’s May 22, 2014, comments concerning the future of the Fed’s asset purchase programs, Groen finds that changes in the U.S. and foreign economic outlooks had a meaningful role in explaining global asset price movements during the so-called taper tantrum.
When the Treasury needed revenue to pay off debts from the Louisiana Purchase and the War of 1812, the U.S. government sold land acquired in the Louisiana Purchase. At the same time, increased agricultural demand and easy credit policies led to a speculative real estate boom. When the Treasury started to pay off its debts, the specie drain caused a painful but necessary contraction and the boom went bust. In this edition of Crisis Chronicles, the bloggers describe America’s first great economic crisis.
Unconventional energy development, such as horizontal drilling and hydraulic fracturing (“fracking”), has led to deposit inflows to banks. Plosser shows how these unsolicited deposits can be used to estimate banks’ investment decisions over the recent business cycle.
Students in recent years have been paying more to attend college and earning less upon graduation—trends that have raised questions about whether a college education remains a good investment. But research from economists Jaison Abel and Richard Deitz finds that the benefits of college still tend to outweigh the costs.
Del Negro and Sims argue that a central bank with a large balance sheet composed of long-duration nominal assets should have access to, and be willing to ask for, support for its balance sheet by the fiscal authority. Otherwise, its ability to control inflation may be at risk.
By Marco Del Negro and Christopher A. Sims, Staff Reports 701, November 2014
The authors investigate the residence choices of the young people surveyed in the New York Fed’s Consumer Credit Panel, and examine the relationship of these choices to evolving local house prices, local employment conditions, and the student debt reliance of local college students.
By Zachary Bleemer, Meta Brown, Donghoon Lee, and Wilbert van der Klaauw, Staff Reports 700, November 2014