ECONOMY

  • Banks and Nonbanks Are Not Separate, but Interwoven

    Viral V. Acharya, Nicola Cetorelli, and Bruce Tuckman In our previous post, we documented the significant growth of nonbank financial institutions (NBFIs) over the past decade, but also argued for and showed evidence of NBFIs’ dependence on banks for funding and liquidity support. In this post, we explain that the observed growth of NBFIs reflects banks optimally changing their business…

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  • The New York Fed DSGE Model Forecast—June 2024

    Marco Del Negro, Pranay Gundam, Donggyu Lee, Ramya Nallamotu, and Brian Pacula 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 March 2024. As usual, we wish to remind our readers that the DSGE model forecast…

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  • Is the Recent Inflationary Spike a Global Phenomenon?  

    Martín Almuzara, Babur Kocaoglu, and Argia Sbordone In the aftermath of the COVID-19 pandemic, inflation rose almost simultaneously in most economies around the world. After peaking in mid-2022, inflation then went into decline—a fall that was just as universal as the initial rise. In this post, we explore the interrelation of inflation dynamics across OECD countries by constructing a measure of…

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  • Supply Chain Disruptions Have Eased, But Remain a Concern 

    Jaison R. Abel and Richard Deitz  Supply chain disruptions became a major headache for businesses in the aftermath of the pandemic. Indeed, in October 2021, nearly all firms in our regional business surveys reported at least some difficulty obtaining the supplies they needed. These supply chain disruptions were a key contributor to the surge in inflation that occurred as the…

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  • Do Exchange-Traded Products Improve Bitcoin Trading? 

    Ken Armstrong, Asani Sarkar, and Leslie Conner Warren Spot bitcoin exchange-traded products (ETPs) began trading in the U.S. on January 11, 2024. For investors, these ETPs purport improved liquidity and price efficiency, and more convenient access to bitcoin trading compared to other means of trading bitcoin in spot markets. Proponents also cite bitcoin holdings as a portfolio diversification opportunity due to…

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  • Thinking of Pursuing a PhD in Economics? Info on Graduate School and Beyond

    Kasey Chatterji-Len and Anna Kovner Becoming a PhD economist can provide a fulfilling and financially secure career path. However, getting started in the field can be daunting if you don’t know much about the preparation you’ll need and the available job opportunities. If you’re wondering what it means to be an economics researcher or how to become one, please read…

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  • Can Discount Window Stigma Be Cured? 

    Olivier Armantier One of the core responsibilities of central banks is to act as “lender of last resort” to the financial system. In the U.S., the Federal Reserve has been operating as a lender of last resort through its “discount window” (DW) for more than a century. Historically, however, the DW has been plagued by stigma—banks’ reluctance to use the…

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  • Taking Stock: Dollar Assets, Gold, and Official Foreign Exchange Reserves

    Patrick Douglass, Linda S. Goldberg, and Oliver Z. Hannaoui Global central banks and finance ministries held nearly $12 trillion of foreign exchange reserves as of the end of 2023, with nearly $7 trillion composed of U.S. dollar assets. Nevertheless, a narrative has emerged that an observed decline in the share of dollar assets in official reserve portfolios represents the leading…

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  • The Changing Landscape of Corporate Credit

    Nina Boyarchenko and Leonardo Elias Firms’ access to credit is a crucial determinant of their investment, employment, and overall growth decisions. While we usually think of their ability to borrow as determined by aggregate credit conditions, in reality firms have a number of markets where they can borrow, and conditions can vary across those markets. In this post, we investigate…

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  • Veterans in the Labor Market: 2024 Update

    Rajashri Chakrabarti, Dan Garcia, and Maxim Pinkovskiy Veterans constitute a significant segment of the male labor force, and understanding labor market disparities between veterans and non‑veterans is an important component of studying disparities in the economy as a whole. In a previous Liberty Street Economics post, we have shown that even relative to a group of comparable non-veterans, veterans have…

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