Federal Reserve Bank of Boston

Displaying 1-25 of 25 results

  • White Papers // Jun 2011

    Closed-form Estimates Of The New Keynesian Phillips Curve With Time-varying Trend Inflation

    The authors compare estimates of the New Keynesian Phillips Curve (NKPC) when the curve is specified in two different ways. In the standard Difference Equation (DE) form, current inflation is a function of past inflation, expected future inflation, and real marginal costs. The alternative Closed Form (CF) specification explicitly solves...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jun 2011

    Financing Constraints And Unemployment: Evidence From The Great Recession

    This paper exploits the differential financing needs across industrial sectors and provides strong empirical evidence that financing constraints of small businesses in the United States are important in explaining the unemployment dynamics around the Great Recession. In particular, the authors show that workers in small firms are more likely to...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jun 2011

    A Response To Cogley And Sbordone's Comment On "Closed-Form Estimates Of The New Keynesian Phillips Curve With Time-Varying Trend Inflation"

    In their 2010 comment (which the authors refer to as CS10), Cogley and Sbordone argue that: their estimates are not entirely closed form, and hence are arbitrary; they cannot guarantee that their estimates are valid, while their estimates (Cogley and Sbordone 2008, henceforth CS08) always are; and the estimates in...

    Provided By Federal Reserve Bank of Boston

  • White Papers // May 2011

    Do Commodity Price Spikes Cause Long-Term Inflation?

    This public policy brief examines the relationship between trend inflation and commodity price increases and finds that evidence from recent decades supports the notion that commodity price changes do not affect the long-run inflation rate. Evidence from earlier decades suggests that effects on inflation expectations and wages played a key...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Apr 2011

    Self-Employment In The Global Economy

    This paper studies the effects of foreign competition on self-employment levels. The authors begin by pointing out a previously unknown fact: the greater the exposure to foreign competition, the smaller the fraction of self-employed people. This fact holds across very different countries, across relatively similar countries like European Union members,...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Dec 2010

    Affective Decision Making: A Theory Of Optimism Bias

    Affective Decision Making (ADM) is a strategic model of choice under risk where the authors posit two cognitive processes - the "Rational" and the "Emotional" process. The two processes interact in a simultaneous-move intrapersonal potential game, and observed choice is the result of a pure Nash equilibrium strategy in this...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Dec 2010

    Evidence Of A Credit Crunch? Results From The 2010 Survey Of First District Community Banks

    This policy brief summarizes the findings of the Survey of Community Banks conducted by the Federal Reserve Bank of Boston in May 2010. This survey seeks to understand how the supply of, and demand for, bank business loans changed in the period following the financial crisis. The survey design focuses...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Nov 2010

    Mismatch In The Labor Market: Measuring The Supply Of And Demand For Skilled Labor In New England

    Over the past decade, policymakers and business leaders across New England have been concerned that the region's slower population growth and loss of residents to other parts of the country will lead to a shortage of skilled labor - particularly when the baby boom generation retires.1 Prior to the Great...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Sep 2010

    Evidence Of A Credit Crunch?: Results From The 2010 Survey Of First District Community Banks

    This paper summarizes the findings of the Survey of Community Banks conducted by the Federal Reserve Bank of Boston in May 2010. This survey seeks to understand how the supply of, and demand for, bank business loans changed in the period following the financial crisis. The survey design focuses on...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Aug 2010

    A Profile Of The Mortgage Crisis In A Low-And-Moderate-Income Community

    This paper assesses the impact of the mortgage crisis on Chelsea, Massachusetts, a low- and moderate income community of 35,000 adjacent to Boston. After years of rapid growth, house prices started falling in 2005. According to the repeat-sales indices, by the end of 2009 prices had fallen by as much...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Aug 2010

    Internal Sources Of Finance And The Great Recession

    The rising stockpile of cash as a share of total assets at U.S. firms has intrigued economists since at least the paper of Bates, Kahle, and Stulz (2006), yet there has been relatively little work on where this cash has come from and how it is related to investment performance....

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jun 2010

    Wage Setting Patterns And Monetary Policy: International Evidence

    Systematic differences in the timing of wage setting decisions among industrialized countries provide an ideal framework to study the importance of wage rigidity in the transmission of monetary policy. The Japanese Shunto presents the best-known case of bunching in wage setting decisions: From February to May, most firms set wages...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jun 2010

    Unaffordable Housing And Local Employment Growth

    High housing prices have caused concerns among policy makers as well as the public in many U.S. regions. There is a general belief that unaffordable housing could drive businesses away and thus impede job growth. However, there has been little empirical evidence that supports this view. In this paper, the...

    Provided By Federal Reserve Bank of Boston

  • White Papers // May 2010

    Mobile Payments in the United States at Retail Point of Sale: Current Market and Future Prospects

    Although mobile payments are increasingly used in some countries, they have not been adopted widely in the United States so far, despite their potential to add value for consumers and streamline the payments system. After describing a few countries experiences, the authors analyze the prospects for the U.S. market for...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Feb 2010

    Jobs In Springfield, Massachusetts: Understanding And Remedying The Causes Of Low Resident Employment Rates

    As part of the Federal Reserve Bank of Boston's commitment to supporting efforts to revitalize the economy of Springfield, Massachusetts, this paper explores the causes of and potential remedies for the city's low resident employment rates. When compared to the state as a whole and to other midsize New England...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jan 2010

    Mobile Payments Industry Roundtable Summary

    This paper summarizes a meeting convened by retail payments representatives from the Boston and Atlanta Federal Reserve Banks for key industry stakeholders involved in mobile payments in the U.S. The Fed has always been involved in payments as part of its central bank role, so the authors are interested in...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Dec 2009

    State-Dependent Pricing And Optimal Monetary Policy

    This paper analyzes optimal monetary policy under recommitment in a State-Dependent Pricing (SDP) environment. Under SDP, monopolistically competitive firms are allowed to endogenously change the timing of price adjustments. I show that this endogenous timing of price adjustment alters the tradeoff and the cost of inflation variation faced by the...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Dec 2009

    Inflation Persistence

    This paper examines the concept of inflation persistence in macroeconomic theory. It begins with a definition of persistence, emphasizing the difference between reducedform and structural persistence. It then examines a number of empirical measures of reduced form persistence, considering the possibility that persistence may have changed over time. The paper...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Nov 2009

    Financial Leverage, Corporate Investment, And Stock Returns

    This paper presents a dynamic model of the firm with risk?]free debt contracts, investment irreversibility, and debt restructuring costs. The model fits several stylized facts of corporate finance and asset pricing: First, book leverage is constant across different book?]to?]market portfolios, whereas market leverage differs significantly. Second, changes in market leverage...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Nov 2009

    Housing And Debt Over The Life Cycle And Over The Business Cycle

    This paper describes an equilibrium life-cycle model of housing where no convex adjustment costs lead households to adjust their housing choice infrequently and by large amounts when they do so. In the cross-sectional dimension, the model matches the wealth distribution; the age profiles of consumption, homeownership, and mortgage debt; and...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jun 2009

    Reviving Mortgage Securitization: Lessons From The Brady Plan And Duration Analysis

    The authors review the period of the Latin American debt crisis in order to draw policy analogies from that experience for current U.S. credit securitization markets. During the earlier episode the Brady Plan used a zero-coupon U.S. Treasury security to provide a credit enhancement for the troubled assets. This revitalized...

    Provided By Federal Reserve Bank of Boston

  • White Papers // May 2009

    The Financial Burden Of Health Care

    Escalating medical costs are threatening the nation's financial well-being and its health. With insurance premiums increasing 78 percent between 2001 and 2007 and wages by only 19 percent, American workers have felt the pinch. Few workers or their employers have been able to absorb premium increases comfortably, and for many...

    Provided By Federal Reserve Bank of Boston

  • White Papers // May 2009

    Empirical Estimates Of Changing Inflation Dynamics

    This paper provides an array of empirical evidence bearing on potentially important changes in the dynamics of U.S. inflation. The authors examine the overall performance of Phillips curves relative to some well-known benchmarks, the efficiency with which the Federal Reserve's Green book forecasts of inflation use real activity information, and...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Sep 2003

    Productivity and Economies of Scale in the Production of Bank Service Value Added

    This paper uses a new measure of bank service output to estimate various specifications of production and cost functions for Bank Holding Companies (BHCs) over the period 1986 to 1999. The new output series is a true flow measure of bank service value added, and it follows from a unified...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Sep 2003

    Service Output of Bank Holding Companies in the 1990s and the Role of Risk

    This paper constructs a new measure of output for Bank Holding Companies (BHCs) over the period 1986 to 1999. This flow measure of bank value added follows from a unified model of bank operation that integrates theories of production, financial intermediation, and asset pricing. The primary contribution of the model...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Sep 2003

    Productivity and Economies of Scale in the Production of Bank Service Value Added

    This paper uses a new measure of bank service output to estimate various specifications of production and cost functions for Bank Holding Companies (BHCs) over the period 1986 to 1999. The new output series is a true flow measure of bank service value added, and it follows from a unified...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Sep 2003

    Service Output of Bank Holding Companies in the 1990s and the Role of Risk

    This paper constructs a new measure of output for Bank Holding Companies (BHCs) over the period 1986 to 1999. This flow measure of bank value added follows from a unified model of bank operation that integrates theories of production, financial intermediation, and asset pricing. The primary contribution of the model...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Sep 2010

    Evidence Of A Credit Crunch?: Results From The 2010 Survey Of First District Community Banks

    This paper summarizes the findings of the Survey of Community Banks conducted by the Federal Reserve Bank of Boston in May 2010. This survey seeks to understand how the supply of, and demand for, bank business loans changed in the period following the financial crisis. The survey design focuses on...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jun 2011

    Financing Constraints And Unemployment: Evidence From The Great Recession

    This paper exploits the differential financing needs across industrial sectors and provides strong empirical evidence that financing constraints of small businesses in the United States are important in explaining the unemployment dynamics around the Great Recession. In particular, the authors show that workers in small firms are more likely to...

    Provided By Federal Reserve Bank of Boston

  • White Papers // May 2011

    Do Commodity Price Spikes Cause Long-Term Inflation?

    This public policy brief examines the relationship between trend inflation and commodity price increases and finds that evidence from recent decades supports the notion that commodity price changes do not affect the long-run inflation rate. Evidence from earlier decades suggests that effects on inflation expectations and wages played a key...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jun 2010

    Unaffordable Housing And Local Employment Growth

    High housing prices have caused concerns among policy makers as well as the public in many U.S. regions. There is a general belief that unaffordable housing could drive businesses away and thus impede job growth. However, there has been little empirical evidence that supports this view. In this paper, the...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Apr 2011

    Self-Employment In The Global Economy

    This paper studies the effects of foreign competition on self-employment levels. The authors begin by pointing out a previously unknown fact: the greater the exposure to foreign competition, the smaller the fraction of self-employed people. This fact holds across very different countries, across relatively similar countries like European Union members,...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jun 2011

    A Response To Cogley And Sbordone's Comment On "Closed-Form Estimates Of The New Keynesian Phillips Curve With Time-Varying Trend Inflation"

    In their 2010 comment (which the authors refer to as CS10), Cogley and Sbordone argue that: their estimates are not entirely closed form, and hence are arbitrary; they cannot guarantee that their estimates are valid, while their estimates (Cogley and Sbordone 2008, henceforth CS08) always are; and the estimates in...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jun 2011

    Closed-form Estimates Of The New Keynesian Phillips Curve With Time-varying Trend Inflation

    The authors compare estimates of the New Keynesian Phillips Curve (NKPC) when the curve is specified in two different ways. In the standard Difference Equation (DE) form, current inflation is a function of past inflation, expected future inflation, and real marginal costs. The alternative Closed Form (CF) specification explicitly solves...

    Provided By Federal Reserve Bank of Boston

  • White Papers // May 2009

    The Financial Burden Of Health Care

    Escalating medical costs are threatening the nation's financial well-being and its health. With insurance premiums increasing 78 percent between 2001 and 2007 and wages by only 19 percent, American workers have felt the pinch. Few workers or their employers have been able to absorb premium increases comfortably, and for many...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jan 2010

    Mobile Payments Industry Roundtable Summary

    This paper summarizes a meeting convened by retail payments representatives from the Boston and Atlanta Federal Reserve Banks for key industry stakeholders involved in mobile payments in the U.S. The Fed has always been involved in payments as part of its central bank role, so the authors are interested in...

    Provided By Federal Reserve Bank of Boston

  • White Papers // May 2010

    Mobile Payments in the United States at Retail Point of Sale: Current Market and Future Prospects

    Although mobile payments are increasingly used in some countries, they have not been adopted widely in the United States so far, despite their potential to add value for consumers and streamline the payments system. After describing a few countries experiences, the authors analyze the prospects for the U.S. market for...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Dec 2010

    Evidence Of A Credit Crunch? Results From The 2010 Survey Of First District Community Banks

    This policy brief summarizes the findings of the Survey of Community Banks conducted by the Federal Reserve Bank of Boston in May 2010. This survey seeks to understand how the supply of, and demand for, bank business loans changed in the period following the financial crisis. The survey design focuses...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Dec 2010

    Affective Decision Making: A Theory Of Optimism Bias

    Affective Decision Making (ADM) is a strategic model of choice under risk where the authors posit two cognitive processes - the "Rational" and the "Emotional" process. The two processes interact in a simultaneous-move intrapersonal potential game, and observed choice is the result of a pure Nash equilibrium strategy in this...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Nov 2009

    Financial Leverage, Corporate Investment, And Stock Returns

    This paper presents a dynamic model of the firm with risk?]free debt contracts, investment irreversibility, and debt restructuring costs. The model fits several stylized facts of corporate finance and asset pricing: First, book leverage is constant across different book?]to?]market portfolios, whereas market leverage differs significantly. Second, changes in market leverage...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Dec 2009

    Inflation Persistence

    This paper examines the concept of inflation persistence in macroeconomic theory. It begins with a definition of persistence, emphasizing the difference between reducedform and structural persistence. It then examines a number of empirical measures of reduced form persistence, considering the possibility that persistence may have changed over time. The paper...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Dec 2009

    State-Dependent Pricing And Optimal Monetary Policy

    This paper analyzes optimal monetary policy under recommitment in a State-Dependent Pricing (SDP) environment. Under SDP, monopolistically competitive firms are allowed to endogenously change the timing of price adjustments. I show that this endogenous timing of price adjustment alters the tradeoff and the cost of inflation variation faced by the...

    Provided By Federal Reserve Bank of Boston

  • White Papers // May 2009

    Empirical Estimates Of Changing Inflation Dynamics

    This paper provides an array of empirical evidence bearing on potentially important changes in the dynamics of U.S. inflation. The authors examine the overall performance of Phillips curves relative to some well-known benchmarks, the efficiency with which the Federal Reserve's Green book forecasts of inflation use real activity information, and...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Aug 2010

    Internal Sources Of Finance And The Great Recession

    The rising stockpile of cash as a share of total assets at U.S. firms has intrigued economists since at least the paper of Bates, Kahle, and Stulz (2006), yet there has been relatively little work on where this cash has come from and how it is related to investment performance....

    Provided By Federal Reserve Bank of Boston

  • White Papers // Nov 2010

    Mismatch In The Labor Market: Measuring The Supply Of And Demand For Skilled Labor In New England

    Over the past decade, policymakers and business leaders across New England have been concerned that the region's slower population growth and loss of residents to other parts of the country will lead to a shortage of skilled labor - particularly when the baby boom generation retires.1 Prior to the Great...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Nov 2009

    Housing And Debt Over The Life Cycle And Over The Business Cycle

    This paper describes an equilibrium life-cycle model of housing where no convex adjustment costs lead households to adjust their housing choice infrequently and by large amounts when they do so. In the cross-sectional dimension, the model matches the wealth distribution; the age profiles of consumption, homeownership, and mortgage debt; and...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jun 2010

    Wage Setting Patterns And Monetary Policy: International Evidence

    Systematic differences in the timing of wage setting decisions among industrialized countries provide an ideal framework to study the importance of wage rigidity in the transmission of monetary policy. The Japanese Shunto presents the best-known case of bunching in wage setting decisions: From February to May, most firms set wages...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Aug 2010

    A Profile Of The Mortgage Crisis In A Low-And-Moderate-Income Community

    This paper assesses the impact of the mortgage crisis on Chelsea, Massachusetts, a low- and moderate income community of 35,000 adjacent to Boston. After years of rapid growth, house prices started falling in 2005. According to the repeat-sales indices, by the end of 2009 prices had fallen by as much...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Feb 2010

    Jobs In Springfield, Massachusetts: Understanding And Remedying The Causes Of Low Resident Employment Rates

    As part of the Federal Reserve Bank of Boston's commitment to supporting efforts to revitalize the economy of Springfield, Massachusetts, this paper explores the causes of and potential remedies for the city's low resident employment rates. When compared to the state as a whole and to other midsize New England...

    Provided By Federal Reserve Bank of Boston

  • White Papers // Jun 2009

    Reviving Mortgage Securitization: Lessons From The Brady Plan And Duration Analysis

    The authors review the period of the Latin American debt crisis in order to draw policy analogies from that experience for current U.S. credit securitization markets. During the earlier episode the Brady Plan used a zero-coupon U.S. Treasury security to provide a credit enhancement for the troubled assets. This revitalized...

    Provided By Federal Reserve Bank of Boston