ECONOMY
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Who’s Paying Those Overdraft Fees?
Gabriel Leonard, Donald Morgan, and Wilbert van der Klaauw One criticism of overdraft credit is that the fees seem borne disproportionately by low-income, Black, and Hispanic households. To investigate this concern, we surveyed around 1,000 households about their overdraft activity. Like critics, we find that these groups do tend to overdraft more often. However, when we control for respondents’ credit…
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Why Does the U.S. Always Run a Trade Deficit?
Thomas Klitgaard The obvious answer to the question of why the United States runs a trade deficit is that its export sales have not kept up with its demand for imports. A less obvious answer is that the imbalance reflects a macroeconomic phenomenon. Using national accounting, one can show deficits are also due to a persistent shortfall in domestic saving…
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Nonbanks and Banks: Alone or Together?
Nicola Cetorelli, Gonzalo Cisternas, and Asani Sarkar Nonbank financial institutions (NBFIs) constitute a variety of entities—fintech companies, mutual funds, hedge funds, insurance companies, private debt providers, special purpose vehicles, among others—that have become important providers of financial intermediation services worldwide. But what is the essence of nonbank financial intermediation? Does it have any inherent advantages, and how does it interact…
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Who Finances Real Sector Lenders?
Nina Boyarchenko, Hyuntae Choi, and Leonardo Elias The modern financial system is complex, with funding flowing not just from the financial sector to the real sector but within the financial sector through an intricate network of financial claims. While much of our work focuses on understanding the end result of these flows—credit provided to the real sector—we explore in this…
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The College Economy: Educational Differences in Labor Market Outcomes
Rajashri Chakrabarti, Thu Pham, Beckett Pierce, and Maxim Pinkovskiy It is intuitive that workers with higher levels of education tend to earn more than workers with less education. However, it is also true that workers with more education are much more likely to be employed, and this employment advantage of education has, if anything, grown in recent years. In this post,…
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Student Loan Delinquencies Are Back, and Credit Scores Take a Tumble
Andrew F. Haughwout, Donghoon Lee, Daniel Mangrum, Joelle Scally, and Wilbert van der Klaauw This morning, the Center for Microeconomic Data at the New York Fed released the Quarterly Report on Household Debt and Credit updated through the first quarter of 2025. Over the first quarter, overall household debt rose by $167 billion. An increase of $199 billion in mortgage…
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Student Loan Balance and Repayment Trends Since the Pandemic Disruption
Daniel Mangrum and Crystal Wang This month marks five years since the start of the COVID-19 pandemic, after which subsequent policy responses upended most trends underlying student loans in the U.S. Beginning in March 2020, executive and legislative actions suspended student loan payments and the accumulation of interest for loans owned by the federal government. In addition, federal actions marked all…
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Monetary Policy Spillovers in the Global Economy
Sushant Acharya, Ozge Akinci, Silvia Miranda-Agrippino, and Paolo A. Pesenti Understanding cross-border interdependencies and inspecting the international transmission mechanism of policy shocks is the raison d’être of open-economy macroeconomics as an intellectual discipline. The relevance for the policy debate is pervasive: over and over in the history of the international monetary system national policymakers have pointed at — and voiced…
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Will Peak Demand Roil Global Oil Markets?
Matthew Higgins and Thomas Klitgaard “Peak oil”—the notion that the depletion of accessible petroleum deposits would soon lead to declining global oil output and an upward trend in prices—was widely debated in the late 1990s and early 2000s. Proponents of the peak supply thesis turned out to be wrong, given the introduction of fracking and other new extraction methods. Now…
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Stablecoins and Crypto Shocks: An Update
Kenechukwu Anadu, Pablo D. Azar, Marco Cipriani, Thomas M. Eisenbach, Catherine Huang, Mattia Landoni, Gabriele La Spada, Marco Macchiavelli, Antoine Malfroy-Camine, and J. Christina Wang Stablecoins are crypto assets whose value is pegged to that of a fiat currency, usually the U.S. dollar. In our first Liberty Street Economics post, we described the rapid growth of stablecoins, the different types…
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