Federal Reserve Bank of New York

Displaying 1-36 of 36 results

  • White Papers // Jan 2011

    Responses To The Financial Crisis, Treasury Debt, And The Impact On Short-Term Money Markets

    Several programs have been introduced by U.S. fiscal and monetary authorities in response to the financial crisis. The authors examine the responses involving Treasury debt-the Term Securities Lending Facility (TSLF), the Supplemental Financing Program, increases in Treasury issuance, and open market operations-and their impacts on the overnight Treasury general collateral...

    Provided By Federal Reserve Bank of New York

  • White Papers // Nov 2010

    Fitting Observed Inflation Expectations

    This paper provides evidence on the extent to which inflation expectations generated by a standard Christiano et al. (2005)/Smets and Wouters (2003) - type DSGE model are in line with what is observed in the data. The authors consider three variants of this model that differ in terms of the...

    Provided By Federal Reserve Bank of New York

  • White Papers // Nov 2010

    Real-Time Inflation Forecasting In A Changing World

    This paper revisits inflation forecasting using reduced-form Phillips curve forecasts, that is, inflation forecasts using activity and expectations variables. The authors propose a model that results from averaging across different regression specifications selected from a set of potential predictors that includes inflation lags, different real activity data, term structure data,...

    Provided By Federal Reserve Bank of New York

  • White Papers // Nov 2010

    Do Underwriters Matter? The Impact Of The Near Loss Of An Equity Underwriter

    The financial crisis provides a natural experiment for testing theoretical predictions of the equity underwriter's role following an initial public offering. Clients of Bear Stearns, Lehman Brothers, Merrill Lynch, and Wachovia saw their stock prices fall almost 5%, on average, on the day it appeared that these institutions might collapse....

    Provided By Federal Reserve Bank of New York

  • White Papers // Oct 2010

    Equity Premium Predictions With Adaptive Macro Indexes

    Fundamental economic conditions are crucial determinants of equity premia. However, commonly used predictors do not adequately capture the changing nature of economic conditions and hence have limited power in forecasting equity returns. To address the inadequacy, this paper constructs macro indexes from large data sets and adaptively chooses optimal indexes...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2010

    Deposit Market Competition, Wholesale Funding, And Bank Risk

    In this paper the authors revisit the long debate on the risk effects of bank competition and propose a new approach to the empirical estimation of the relation between deposit market competition and bank risk. This approach is based on the classical moral hazard problem of the bank: deposit market...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2010

    Improving Survey Measures Of Household Inflation Expectations

    Expectations about future inflation are generally thought to play an important role in households' decisions about spending and saving. They are also of great interest to central bankers, who take them into account when determining policy or assessing the effectiveness of communications with the public. To help improve existing survey...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2010

    Stressed, Not Frozen: The Federal Funds Market In The Financial Crisis

    The authors examine the importance of liquidity hoarding and counterparty risk in the U.S. overnight interbank market during the financial crisis of 2008. The findings suggest that concerns about counterparty risk play a much larger role than liquidity hoarding: In the two days after Lehman Brothers' bankruptcy, loan amounts and...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2010

    Firm Value And Cross-Listings: The Impact Of Stock Market Prestige

    This paper investigates the valuation impact of a firm's decision to cross-list on a more (or less) prestigious stock exchange relative to its own domestic market. The authors use network analysis to derive broad market-based measures of prestige for forty-five country or regional stock exchange destinations between 1990 and 2006....

    Provided By Federal Reserve Bank of New York

  • White Papers // Aug 2010

    A Private Lender Cooperative Model For Residential Mortgage Finance

    The authors describe a set of six design principles for the reorganization of the U.S. housing finance system and apply them to one model for replacing Fannie Mae and Freddie Mac that has so far received frequent mention but little sustained analysis - the lender cooperative utility. They discuss the...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jun 2010

    Design Of Contingent Capital With A Stock Price Trigger For Mandatory Conversion

    The proposal for banks to issue contingent capital that must convert into common equity when the banks' stock price falls below a specified threshold, or "Trigger," does not in general lead to a unique equilibrium in equity and contingent capital prices. Multiple or no equilibrium arises because both equity and...

    Provided By Federal Reserve Bank of New York

  • White Papers // May 2010

    Global Banks And International Shock Transmission: Evidence From The Crisis

    Global banks played a significant role in transmitting the 2007-09 financial crisis to emerging-market economies. The authors examine adverse liquidity shocks on main developed country banking systems and their relationships to emerging markets across Europe, Asia, and Latin America, isolating loan supply from loan demand effects. Loan supply in emerging...

    Provided By Federal Reserve Bank of New York

  • White Papers // Apr 2010

    The Changing Nature Of Financial Intermediation And The Financial Crisis Of 2007-09

    The financial crisis of 2007-09 highlighted the changing role of financial institutions and the growing importance of the "Shadow banking system," which grew out of the securitization of assets and the integration of banking with capital market developments. This trend was most pronounced in the United States, but it also...

    Provided By Federal Reserve Bank of New York

  • White Papers // Mar 2010

    Social Security, Benefit Claiming, And Labor Force Participation: A Quantitative General Equilibrium Approach

    The authors build a general equilibrium model of overlapping generations that incorporates endogenous saving, labor force participation, work hours, and Social Security benefit claims. Using this model, they study the impact of three Social Security reforms: a reduction in benefits and payroll taxes; an increase in the earliest retirement age,...

    Provided By Federal Reserve Bank of New York

  • White Papers // Mar 2010

    Productivity And The Density Of Human Capital

    The authors estimate a model of urban productivity in which the agglomeration effect of density is enhanced by a metropolitan area's stock of human capital. Estimation accounts for potential biases due to the endogeneity of density and industrial composition effects. Using new information on output per worker for U.S. metropolitan...

    Provided By Federal Reserve Bank of New York

  • White Papers // Feb 2010

    MBS Ratings And The Mortgage Credit Boom

    The authors study credit ratings on subprime and Alt-A Mortgage-Backed Securities (MBS) deals issued between 2001 and 2007, the period leading up to the subprime crisis. Ratings are found to be correlated with ex-ante credit risk, and with subsequent deal performance, suggesting they contain useful information for investors. However, controlling...

    Provided By Federal Reserve Bank of New York

  • White Papers // Feb 2010

    Import Competition And Quality Upgrading

    It is important to understand the factors that influence a country's transition from the production of low-quality to high-quality products since the production of high-quality goods is often viewed as a pre-condition for export success and, ultimately, for economic development. In this paper, the authors provide the first evidence that...

    Provided By Federal Reserve Bank of New York

  • White Papers // Feb 2010

    Human Capital And Economic Activity In Urban America

    The authors examine the relationship between human capital and economic activity in U.S. metropolitan areas, extending the literature in two ways. First, they utilize new data on metropolitan area GDP to measure economic activity. Results show that a one-percentage point increase in the proportion of residents with a college degree...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jan 2010

    The Credit Process: A Guide For Small Business Owners

    Some say owning a home is the American dream. Millions of small business owners will argue, however, that owning one's own business is really the American dream. But while it offers rewards, owning a business is not easy. Entrepreneurship has its problems, and a critical - and sometimes fatal -...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jan 2010

    Monetary Cycles, Financial Cycles, And The Business Cycle

    One of the most robust stylized facts in macroeconomics is the forecasting power of the term spread for future real activity. The economic rationale for this forecasting power usually appeals to expectations of future interest rates, which affect the slope of the term structure. In this paper, the authors propose...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jan 2010

    The Measurement Of Rent Inflation

    Providing for shelter represents a large portion of the typical household budget. Accordingly, rent, paid either to a landlord or to oneself as an owner-occupant, has a large weight in the CPI and in the personal consumption expenditures deflator, resulting in substantial scrutiny of how tenant rent and owners' equivalent...

    Provided By Federal Reserve Bank of New York

  • White Papers // Dec 2009

    Investment Shocks And The Relative Price Of Investment

    The authors estimate a New-Neoclassical Synthesis model of the business cycle with two investment shocks. The first, an investment-specific technology shock, affects the transformation of consumption into investment goods and is identified with the relative price of investment. The second shock affects the production of installed capital from investment goods...

    Provided By Federal Reserve Bank of New York

  • White Papers // Dec 2009

    Measuring Consumer Uncertainty About Future Inflation

    Survey measures of consumer inflation expectations have an important shortcoming in that, while providing useful summary measures of the distribution of point forecasts across individuals, they contain no direct information about an individual's uncertainty about future inflation. The latter is important not only for forecasting inflation and other macroeconomic outcomes,...

    Provided By Federal Reserve Bank of New York

  • White Papers // Dec 2009

    Real Time Underlying Inflation Gauges For Monetary Policymakers

    Central banks analyze a wide range of data to obtain better measures of underlying inflationary pressures. Factor models have widely been used to formalize this procedure. Using a dynamic factor model this paper develops a measure of Underlying Inflation (UIG) at time horizons of relevance for monetary policymakers for both...

    Provided By Federal Reserve Bank of New York

  • White Papers // Nov 2009

    Macroprudential Supervision Of Financial Institutions: Lessons From The SCAP

    A fundamental conclusion drawn from the recent financial crisis is that the supervision and regulation of financial firms in isolation - a purely micro prudential perspective - are not sufficient to maintain financial stability. Rather, a macro prudential perspective, which evaluates and responds to the financial system as a whole,...

    Provided By Federal Reserve Bank of New York

  • White Papers // Nov 2009

    What Fiscal Policy Is Effective At Zero Interest Rates?

    Tax cuts can deepen a recession if the short-term nominal interest rate is zero, according to a standard New Keynesian business cycle model. An example of a contractionary tax cut is a reduction in taxes on wages. This tax cut deepens a recession because it increases deflationary pressures. Another example...

    Provided By Federal Reserve Bank of New York

  • White Papers // Nov 2009

    Implications Of The Financial Crisis For Potential Growth: Past, Present, And Future

    The scale of the recent collapse in asset values and the magnitude of the recession suggest that activities connected to the increase in values over the 2002-07 period - notably, expansion of the financial markets, homebuilding, and real estate - were overstated. If this is true, aggregate U.S. economic growth...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2009

    Labor Market Pooling And Occupational Agglomeration

    This paper examines the micro-foundations of occupational agglomeration in U.S. metropolitan areas, with an emphasis on labor market pooling. Controlling for a wide range of occupational attributes, including proxies for the use of specialized machinery and for the importance of knowledge spillovers, the authors find that jobs characterized by a...

    Provided By Federal Reserve Bank of New York

  • White Papers // Aug 2009

    Gender And The Availability Of Credit To Privately Held Firms: Evidence From The Surveys Of Small Business Finances

    This paper analyzes differences by gender in the ownership of privately held U.S. firms and examines the role of gender in the availability of credit. Using data from the nationally representative Surveys of Small Business Finances, which span a period of sixteen years, the authors document a series of empirical...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jul 2009

    The Shadow Banking System: Implications For Financial Regulation

    The current financial crisis has highlighted the growing importance of the "Shadow banking system," which grew out of the securitization of assets and the integration of banking with capital market developments. This trend has been most pronounced in the United States, but it has had a profound influence on the...

    Provided By Federal Reserve Bank of New York

  • White Papers // Feb 2009

    Seismic Effects Of The Bankruptcy Reform

    The authors argue that the 2005 Bankruptcy Abuse Reform (BAR) contributed to the surge in subprime foreclosures that followed its passage. Before BAR, over-indebted mortgagors could free up income to pay the mortgage by filing bankruptcy and having their unsecured debts discharged. BAR blocks that maneuver for better-off filers by...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jan 2009

    What's Behind Volatile Import Prices From China?

    In a sharp departure from earlier trends, the price of U.S. imports from China rose 6 percent in the 2006-08 period. To explore the forces behind this surprising increase, the authors create a new import index that uses highly disaggregated data to track price developments in different product types. The...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jan 2009

    A Theory Of Slow-Moving Capital And Contagion

    Fire sales that occur during crises beg the question of why sufficient outside capital does not move in quickly to take advantage of fire sales, or in other words, why outside capital is so "Slow-moving". The authors propose an answer to this puzzle in the context of an equilibrium model...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2008

    The Economics Of Two-Sided Payment Card Markets: Pricing, Adoption And Usage

    This paper provides a new theory for two-sided payment card markets by positing better micro-foundations. Adopting payment cards by consumers and merchants requires a fixed cost, but yields lower marginal costs of making payments. Considering this together with the heterogeneity of consumer income and merchant size, the theory derives card...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jun 2004

    Are Bank Holding Companies a Source of Strength to Their Banking Subsidiaries

    The paper presents evidence that the cross-guarantee authority granted to the FDIC by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 has unexpectedly strengthened the Federal Reserve's source-of-strength doctrine. In particular, the study finds that a bank affiliated with a multi-bank holding company is significantly safer than either...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2001

    New Evidence On The Lending Channel

    Do banks play a special role in the transmission mechanism of monetary policy? Article discusses the use the presence of internal capital markets in bank holding companies to isolate plausibly exogenous variation in the financial constraints faced by subsidiary banks. In particular, It demonstrate that affiliated bank loan growth is...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jun 2004

    Are Bank Holding Companies a Source of Strength to Their Banking Subsidiaries

    The paper presents evidence that the cross-guarantee authority granted to the FDIC by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 has unexpectedly strengthened the Federal Reserve's source-of-strength doctrine. In particular, the study finds that a bank affiliated with a multi-bank holding company is significantly safer than either...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jan 2010

    The Credit Process: A Guide For Small Business Owners

    Some say owning a home is the American dream. Millions of small business owners will argue, however, that owning one's own business is really the American dream. But while it offers rewards, owning a business is not easy. Entrepreneurship has its problems, and a critical - and sometimes fatal -...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2010

    Deposit Market Competition, Wholesale Funding, And Bank Risk

    In this paper the authors revisit the long debate on the risk effects of bank competition and propose a new approach to the empirical estimation of the relation between deposit market competition and bank risk. This approach is based on the classical moral hazard problem of the bank: deposit market...

    Provided By Federal Reserve Bank of New York

  • White Papers // Feb 2010

    Import Competition And Quality Upgrading

    It is important to understand the factors that influence a country's transition from the production of low-quality to high-quality products since the production of high-quality goods is often viewed as a pre-condition for export success and, ultimately, for economic development. In this paper, the authors provide the first evidence that...

    Provided By Federal Reserve Bank of New York

  • White Papers // Nov 2009

    Macroprudential Supervision Of Financial Institutions: Lessons From The SCAP

    A fundamental conclusion drawn from the recent financial crisis is that the supervision and regulation of financial firms in isolation - a purely micro prudential perspective - are not sufficient to maintain financial stability. Rather, a macro prudential perspective, which evaluates and responds to the financial system as a whole,...

    Provided By Federal Reserve Bank of New York

  • White Papers // Oct 2010

    Equity Premium Predictions With Adaptive Macro Indexes

    Fundamental economic conditions are crucial determinants of equity premia. However, commonly used predictors do not adequately capture the changing nature of economic conditions and hence have limited power in forecasting equity returns. To address the inadequacy, this paper constructs macro indexes from large data sets and adaptively chooses optimal indexes...

    Provided By Federal Reserve Bank of New York

  • White Papers // Nov 2010

    Fitting Observed Inflation Expectations

    This paper provides evidence on the extent to which inflation expectations generated by a standard Christiano et al. (2005)/Smets and Wouters (2003) - type DSGE model are in line with what is observed in the data. The authors consider three variants of this model that differ in terms of the...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jan 2011

    Responses To The Financial Crisis, Treasury Debt, And The Impact On Short-Term Money Markets

    Several programs have been introduced by U.S. fiscal and monetary authorities in response to the financial crisis. The authors examine the responses involving Treasury debt-the Term Securities Lending Facility (TSLF), the Supplemental Financing Program, increases in Treasury issuance, and open market operations-and their impacts on the overnight Treasury general collateral...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2010

    Improving Survey Measures Of Household Inflation Expectations

    Expectations about future inflation are generally thought to play an important role in households' decisions about spending and saving. They are also of great interest to central bankers, who take them into account when determining policy or assessing the effectiveness of communications with the public. To help improve existing survey...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jan 2009

    What's Behind Volatile Import Prices From China?

    In a sharp departure from earlier trends, the price of U.S. imports from China rose 6 percent in the 2006-08 period. To explore the forces behind this surprising increase, the authors create a new import index that uses highly disaggregated data to track price developments in different product types. The...

    Provided By Federal Reserve Bank of New York

  • White Papers // Aug 2009

    Gender And The Availability Of Credit To Privately Held Firms: Evidence From The Surveys Of Small Business Finances

    This paper analyzes differences by gender in the ownership of privately held U.S. firms and examines the role of gender in the availability of credit. Using data from the nationally representative Surveys of Small Business Finances, which span a period of sixteen years, the authors document a series of empirical...

    Provided By Federal Reserve Bank of New York

  • White Papers // Mar 2010

    Social Security, Benefit Claiming, And Labor Force Participation: A Quantitative General Equilibrium Approach

    The authors build a general equilibrium model of overlapping generations that incorporates endogenous saving, labor force participation, work hours, and Social Security benefit claims. Using this model, they study the impact of three Social Security reforms: a reduction in benefits and payroll taxes; an increase in the earliest retirement age,...

    Provided By Federal Reserve Bank of New York

  • White Papers // May 2010

    Global Banks And International Shock Transmission: Evidence From The Crisis

    Global banks played a significant role in transmitting the 2007-09 financial crisis to emerging-market economies. The authors examine adverse liquidity shocks on main developed country banking systems and their relationships to emerging markets across Europe, Asia, and Latin America, isolating loan supply from loan demand effects. Loan supply in emerging...

    Provided By Federal Reserve Bank of New York

  • White Papers // Feb 2010

    MBS Ratings And The Mortgage Credit Boom

    The authors study credit ratings on subprime and Alt-A Mortgage-Backed Securities (MBS) deals issued between 2001 and 2007, the period leading up to the subprime crisis. Ratings are found to be correlated with ex-ante credit risk, and with subsequent deal performance, suggesting they contain useful information for investors. However, controlling...

    Provided By Federal Reserve Bank of New York

  • White Papers // Nov 2009

    What Fiscal Policy Is Effective At Zero Interest Rates?

    Tax cuts can deepen a recession if the short-term nominal interest rate is zero, according to a standard New Keynesian business cycle model. An example of a contractionary tax cut is a reduction in taxes on wages. This tax cut deepens a recession because it increases deflationary pressures. Another example...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2001

    New Evidence On The Lending Channel

    Do banks play a special role in the transmission mechanism of monetary policy? Article discusses the use the presence of internal capital markets in bank holding companies to isolate plausibly exogenous variation in the financial constraints faced by subsidiary banks. In particular, It demonstrate that affiliated bank loan growth is...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2008

    The Economics Of Two-Sided Payment Card Markets: Pricing, Adoption And Usage

    This paper provides a new theory for two-sided payment card markets by positing better micro-foundations. Adopting payment cards by consumers and merchants requires a fixed cost, but yields lower marginal costs of making payments. Considering this together with the heterogeneity of consumer income and merchant size, the theory derives card...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jan 2009

    A Theory Of Slow-Moving Capital And Contagion

    Fire sales that occur during crises beg the question of why sufficient outside capital does not move in quickly to take advantage of fire sales, or in other words, why outside capital is so "Slow-moving". The authors propose an answer to this puzzle in the context of an equilibrium model...

    Provided By Federal Reserve Bank of New York

  • White Papers // Feb 2010

    Human Capital And Economic Activity In Urban America

    The authors examine the relationship between human capital and economic activity in U.S. metropolitan areas, extending the literature in two ways. First, they utilize new data on metropolitan area GDP to measure economic activity. Results show that a one-percentage point increase in the proportion of residents with a college degree...

    Provided By Federal Reserve Bank of New York

  • White Papers // Feb 2009

    Seismic Effects Of The Bankruptcy Reform

    The authors argue that the 2005 Bankruptcy Abuse Reform (BAR) contributed to the surge in subprime foreclosures that followed its passage. Before BAR, over-indebted mortgagors could free up income to pay the mortgage by filing bankruptcy and having their unsecured debts discharged. BAR blocks that maneuver for better-off filers by...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jul 2009

    The Shadow Banking System: Implications For Financial Regulation

    The current financial crisis has highlighted the growing importance of the "Shadow banking system," which grew out of the securitization of assets and the integration of banking with capital market developments. This trend has been most pronounced in the United States, but it has had a profound influence on the...

    Provided By Federal Reserve Bank of New York

  • White Papers // Nov 2010

    Real-Time Inflation Forecasting In A Changing World

    This paper revisits inflation forecasting using reduced-form Phillips curve forecasts, that is, inflation forecasts using activity and expectations variables. The authors propose a model that results from averaging across different regression specifications selected from a set of potential predictors that includes inflation lags, different real activity data, term structure data,...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2009

    Labor Market Pooling And Occupational Agglomeration

    This paper examines the micro-foundations of occupational agglomeration in U.S. metropolitan areas, with an emphasis on labor market pooling. Controlling for a wide range of occupational attributes, including proxies for the use of specialized machinery and for the importance of knowledge spillovers, the authors find that jobs characterized by a...

    Provided By Federal Reserve Bank of New York

  • White Papers // Nov 2009

    Implications Of The Financial Crisis For Potential Growth: Past, Present, And Future

    The scale of the recent collapse in asset values and the magnitude of the recession suggest that activities connected to the increase in values over the 2002-07 period - notably, expansion of the financial markets, homebuilding, and real estate - were overstated. If this is true, aggregate U.S. economic growth...

    Provided By Federal Reserve Bank of New York

  • White Papers // Dec 2009

    Investment Shocks And The Relative Price Of Investment

    The authors estimate a New-Neoclassical Synthesis model of the business cycle with two investment shocks. The first, an investment-specific technology shock, affects the transformation of consumption into investment goods and is identified with the relative price of investment. The second shock affects the production of installed capital from investment goods...

    Provided By Federal Reserve Bank of New York

  • White Papers // Dec 2009

    Measuring Consumer Uncertainty About Future Inflation

    Survey measures of consumer inflation expectations have an important shortcoming in that, while providing useful summary measures of the distribution of point forecasts across individuals, they contain no direct information about an individual's uncertainty about future inflation. The latter is important not only for forecasting inflation and other macroeconomic outcomes,...

    Provided By Federal Reserve Bank of New York

  • White Papers // Dec 2009

    Real Time Underlying Inflation Gauges For Monetary Policymakers

    Central banks analyze a wide range of data to obtain better measures of underlying inflationary pressures. Factor models have widely been used to formalize this procedure. Using a dynamic factor model this paper develops a measure of Underlying Inflation (UIG) at time horizons of relevance for monetary policymakers for both...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jan 2010

    Monetary Cycles, Financial Cycles, And The Business Cycle

    One of the most robust stylized facts in macroeconomics is the forecasting power of the term spread for future real activity. The economic rationale for this forecasting power usually appeals to expectations of future interest rates, which affect the slope of the term structure. In this paper, the authors propose...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jan 2010

    The Measurement Of Rent Inflation

    Providing for shelter represents a large portion of the typical household budget. Accordingly, rent, paid either to a landlord or to oneself as an owner-occupant, has a large weight in the CPI and in the personal consumption expenditures deflator, resulting in substantial scrutiny of how tenant rent and owners' equivalent...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2010

    Stressed, Not Frozen: The Federal Funds Market In The Financial Crisis

    The authors examine the importance of liquidity hoarding and counterparty risk in the U.S. overnight interbank market during the financial crisis of 2008. The findings suggest that concerns about counterparty risk play a much larger role than liquidity hoarding: In the two days after Lehman Brothers' bankruptcy, loan amounts and...

    Provided By Federal Reserve Bank of New York

  • White Papers // Apr 2010

    The Changing Nature Of Financial Intermediation And The Financial Crisis Of 2007-09

    The financial crisis of 2007-09 highlighted the changing role of financial institutions and the growing importance of the "Shadow banking system," which grew out of the securitization of assets and the integration of banking with capital market developments. This trend was most pronounced in the United States, but it also...

    Provided By Federal Reserve Bank of New York

  • White Papers // Mar 2010

    Productivity And The Density Of Human Capital

    The authors estimate a model of urban productivity in which the agglomeration effect of density is enhanced by a metropolitan area's stock of human capital. Estimation accounts for potential biases due to the endogeneity of density and industrial composition effects. Using new information on output per worker for U.S. metropolitan...

    Provided By Federal Reserve Bank of New York

  • White Papers // Jun 2010

    Design Of Contingent Capital With A Stock Price Trigger For Mandatory Conversion

    The proposal for banks to issue contingent capital that must convert into common equity when the banks' stock price falls below a specified threshold, or "Trigger," does not in general lead to a unique equilibrium in equity and contingent capital prices. Multiple or no equilibrium arises because both equity and...

    Provided By Federal Reserve Bank of New York

  • White Papers // Nov 2010

    Do Underwriters Matter? The Impact Of The Near Loss Of An Equity Underwriter

    The financial crisis provides a natural experiment for testing theoretical predictions of the equity underwriter's role following an initial public offering. Clients of Bear Stearns, Lehman Brothers, Merrill Lynch, and Wachovia saw their stock prices fall almost 5%, on average, on the day it appeared that these institutions might collapse....

    Provided By Federal Reserve Bank of New York

  • White Papers // Aug 2010

    A Private Lender Cooperative Model For Residential Mortgage Finance

    The authors describe a set of six design principles for the reorganization of the U.S. housing finance system and apply them to one model for replacing Fannie Mae and Freddie Mac that has so far received frequent mention but little sustained analysis - the lender cooperative utility. They discuss the...

    Provided By Federal Reserve Bank of New York

  • White Papers // Sep 2010

    Firm Value And Cross-Listings: The Impact Of Stock Market Prestige

    This paper investigates the valuation impact of a firm's decision to cross-list on a more (or less) prestigious stock exchange relative to its own domestic market. The authors use network analysis to derive broad market-based measures of prestige for forty-five country or regional stock exchange destinations between 1990 and 2006....

    Provided By Federal Reserve Bank of New York