ECONOMY
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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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Has Market Concentration in U.S. Manufacturing Increased?
Mary Amiti and Sebastian Heise The increasing dominance of large firms in the United States has raised concerns about pricing power in the product market. The worry is that large firms, facing fewer competitors, could increase their markups over marginal costs without fear of losing market share. In a recently published paper, we show that although sales of domestic firms…
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The New York Fed Consumer Credit Panel: A Foundational CMD Data Set
Andrew Haughwout, Donghoon Lee, Daniel Mangrum, Joelle Scally, and Wilbert van der Klaauw As the Great Financial Crisis and associated recession were unfolding in 2009, researchers at the New York Fed joined colleagues at the Board of Governors and Philadelphia Fed to create a new kind of data set. Household liabilities, particularly mortgages, had gone from being a quiet little…
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The Anatomy of Export Controls
Matteo Crosignani, Lina Han, Marco Macchiavelli, and André F. Silva Governments increasingly use export controls to limit the spread of domestic cutting-edge technologies to other countries. The sectors that are currently involved in this geopolitical race include semiconductors, telecommunications, and artificial intelligence. Despite their growing adoption, little is known about the effect of export controls on supply chains and the…
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A Retrospective on the Life Insurance Sector after the Failure of Silicon Valley Bank
Fulvia Fringuellotti and Saketh Prazad Following the Silicon Valley Bank collapse, the stock prices of U.S banks fell amid concerns about the exposure of the banking sector to interest rate risk. Thus, between March 8 and March 15, 2023, the S&P 500 Bank index dropped 12.8 percent relative to S&P 500 returns (see right panel of the chart below). The…
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What if China Manufactures a Sugar High?
Ozge Akinci, Hunter Clark, Jeff Dawson, Matthew Higgins, Silvia Miranda-Agrippino, Ethan Nourbash, and Ramya Nallamotu While the slump in China’s property sector has been steep, Chinese policymakers have responded to the falloff in property activity with policies designed to spur activity in the manufacturing sector. The apparent hope is that a pivot toward production-intensive growth can help lift the Chinese…
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Physical Climate Risk and Insurers
Hyeyoon Jung, Robert Engle, Shan Ge, and Xuran Zeng As the frequency and severity of natural disasters increase with climate change, insurance—the main tool for households and businesses to hedge natural disaster risks—becomes increasingly important. Can the insurance sector withstand the stress of climate change? To answer this question, it is necessary to first understand insurers’ exposure to physical climate…
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