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ResearchUPDATE

Research UPDATE n Number 1, 2013

federal reserve bank of new york
Research and Statistics Group

■

Number 2, 2013

www.newyorkfed.org/research

Economist-Bloggers Offer Perspectives on Recent
Consumer Spending Trends

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payroll tax cut to expire at the
end of 2012, and the higher
income that workers had grown
accustomed to was gone.
The authors find that the
tax cut led to a substantial
increase in consumer spending
Wilbert van der Klaauw and facilitated the pay-down
of debt. In addition, they point
to a recent consumer survey that suggests that the
expiration of the payroll tax cut is likely to lead to a
substantial reduction in spending and contribute to a
slowdown, or possibly a reversal, in the debt paydown. However, given other concurrent changes in
the ­macroeconomy, such as the increase in housing
wealth of U.S. consumers over the last year, it may
be difficult to detect the response to the tax hike in
aggregate statistics.

n practically every news report on the
economy, we hear about the rise—or fall—
of consumer spending. Accounting for about
70 percent of U.S. economic activity,
consumer spending is widely hailed as the main
engine of economic growth. When Americans
buy more goods and services, businesses generate
higher sales and profits and can afford to hire
workers. Less consumer spending generally results
in slower economic growth.
To inform the public and policymakers, the
Liberty Street Economics blog recently examined two
topics related to consumer spending: how consumers
have reacted to the expiration of the payroll tax cut of
2011-12 and how they are coping with unprecedented
levels of student loan debt.
In My Two (Per)cents: How Are American
Workers Dealing with the Payroll Tax Hike? Basit
Zafar, Max Livingston, and Wilbert van der Klaauw
explore the implications of the payroll tax cut—and
its subsequent expiration—for
U.S. workers.
The tax cut, which was in
place during all of 2011 and
2012, reduced Social Security
and Medicare taxes withheld
from workers’ paychecks by
2 percent. This tax cut affected
nearly 155 million workers in
Basit Zafar
the United States, and put an
additional $1,000 a year in the pocket of an average
household earning $50,000. As part of the “fiscal
cliff ” negotiations, Congress allowed the 2011-12

Also in this issue…
How did consumers respond to the Great
Recession? By shedding more than
$1 trillion in debt.��������������������������������������������������3
Out of the “shadows”: A look at a critical
banking system������������������������������������������������������4
Top blog posts of Q2.�������������������������������������������������5
Most downloaded publications��������������������������������5
Papers recently published by Research
Group economists�������������������������������������������������6
Papers presented at conferences�������������������������������7
Staff Reports: New titles���������������������������������������������9
Publications and papers: April–June�������������������� 11
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Research UPDATE ■ Number 2, 2013
loan borrowers were actually less likely to hold mortgage
and auto debt than their peers with no student debt.
Brown and Caldwell put forth two reasons why
consumers with student loans are withdrawing from
the housing and auto debt markets: First, a weakening in the labor markets since 2007 has likely lowered
graduates’ expectations of their future income.
Declining participation in the housing and auto debt
markets may be a result of graduates decreasing their
consumption, and thus debt, levels in response to
these lower expectations.
A second reason could be more limited access
to credit. In response to the recent recession and
credit crunch, lenders have tightened underwriting standards in all major consumer debt markets.
Consumers with substantial student debt therefore
may not be able to meet the stricter debt-to-income
ratio standards that are now being applied by lenders.
In addition, repayment delinquency has become more
prevalent among student borrowers.
Both of these factors—lower expectations of future earnings and more limited access to credit—may
have broad implications for the ongoing recovery of
the housing and auto markets, and of U.S. consumer
spending more generally. ■

Another obstacle to economic growth may be consumers’ unprecedented levels of
student debt. Student loans are
considered by economists to be
“good debt,” since study after
study has shown that college
graduates earn more over a lifeMeta Brown
time. But an increasing number
of borrowers are struggling to pay them off. There
are now more consumers with student debt—at
higher levels than ever before—and delinquencies
have been growing.
In Young Student Loan Borrowers Retreat
from Housing and Auto Markets, Meta Brown and
Sydnee Caldwell examine trends in homeownership,
auto debt, and total borrowing, and find that high
levels of student debt may be dampening young
workers’ post-schooling economic activity.
The bloggers observe that for the first time in at
least ten years, thirty-year-olds with no student loans
are more likely to have home-secured debt (mortgages)
than those with student loans, and that the same
pattern holds for auto market participation for
twenty-five-year-olds. By the end of 2012, student

Research Group Publications and Other Media
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The Economic Policy Review—a policy-oriented journal focusing on economic and financial
market issues.

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EPR Executive Summaries—selected Economic Policy Review articles, in abridged form.

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Current Issues in Economics and Finance—concise studies of topical economic and financial issues.

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Second District Highlights—a regional supplement to Current Issues.

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Staff Reports—technical papers intended for publication in leading economic and finance journals.

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Publications and Other Research—an annual catalogue of our research output.

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Liberty Street Economics—a blog that enables our economists to engage with the public on important
economic issues quickly and frequently.

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www.newyorkfed.org/research

How Did Consumers Respond to the Great Recession?
By Shedding More Than $1 Trillion in Debt

S

ince the onset of the financial crisis, households have reduced their outstanding debt
by about $1.3 trillion. [Editor’s note: As of
first-quarter 2013, this figure is $1.45 trillion.]
While part of this reduction stemmed from a
historic increase in consumer
defaults and lender charge-offs,
particularly on mortgage debt,
other factors were also at play.
In The Financial Crisis at the
Kitchen Table: Trends in
Household Debt and Credit
(Current Issues in Economics and
Andrew Haughwout
Finance, vol. 19, no. 2), Meta
Brown, Andrew Haughwout, Donghoon Lee, and
Wilbert van der Klaauw use a rich new data set on
individual credit accounts to investigate the consumer behavior underlying these trends.
This data set—the Federal Reserve Bank of New
York Consumer Credit Panel—is an ongoing panel
of quarterly data on individual and household debt.
It is created from a large sample of U.S. consumer
credit reports provided to the New York Fed by
Equifax, one of three national credit reporting agencies.

The authors’ analysis of
the Consumer Credit Panel
reveals that households actively
reduced their obligations since
2008 by paying down their
current
Households actively
debts and
reducing new reduced their obligations
Donghoon Lee
borrowing. since 2008 by paying down
These choices, along with banks’ their current debts and
stricter lending standards, helped
reducing new borrowing.
drive this deleveraging process.
These choices, along with
The authors note that, in
light of recent modest improve- banks’ stricter lending
ments in credit availability, an
standards, helped drive this
important question is how much
deleveraging process.
further consumers’ voluntary
actions will lower aggregate debt
before spending resumes. While the pay-down of
debt has helped improve household balance sheets,
it has also likely contributed to slow consumption
growth since the beginning of the recession. Therefore, “the trajectory for consumer indebtedness
has important implications for consumption and
economic growth going forward.” ■

RESEARCH AND STATISTICS GROUP
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Research UPDATE ■ Number 2, 2013

Out of the “Shadows”: A Look at a Critical
Banking System

T

Using the Fed’s “Flow
of Funds” data, Pozsar and
his coauthors calculate that
shadow bank liabilities grew to
nearly $22 trillion in June 2007,
compared
An understanding of the
with about
$14 trillion
“plumbing” of the shadow
Tobias Adrian
in traditional
banking system is an
banking liabilities. Yet the size of
important underpinning
the shadow banking system has
contracted substantially since then, for any study of financial
while traditional banking liabilities
system interlinkages.
have continued to grow.
As such, the authors contend
that despite efforts to address the excesses of credit
bubbles, the shadow banking system will likely continue to play a significant role in the financial system
for the foreseeable future. Furthermore, higher
capital and liquidity standards for traditional banking
entities are “likely to increase the returns to shadow
banking activity,” partially because reform efforts
have done “little to address the tendency of large
institutional cash pools to form outside the banking
system.”
The study, Shadow Banking, updates a 2010 paper published in the Staff Reports series; it includes a
series of online appendixes that depict graphically the
processes of the shadow banking system and its many
components. ■

he nature of financial intermediation has
changed in step with the rapid growth of
the market-based financial system.
“Shadow banks” now serve a critical role,
yet they are still a mystery to some. A forthcoming
study in the Economic Policy Review helps to
demystify the banks by describing the institutional
features of the shadow banking system.
Authors Zoltan Pozsar, Tobias Adrian, Adam
Ashcraft, and Hayley Boesky also consider the
system’s economic role and its relation to the traditional banking system as well as offer observations on
the future of shadow banks in light of recent reform
efforts. They argue that an understanding of the
“plumbing” of the shadow banking system is an
important underpinning for any study of financial
system interlinkages.
Shadow banks are financial intermediaries that
conduct maturity, credit, and liquidity transformation
without explicit access to central bank liquidity or
public sector credit guarantees. They intermediate
credit through various securitization and secured
funding techniques, including asset-backed commercial paper and securities, collateralized debt obligations, and repos. The banks contributed to asset price
appreciation and credit expansion prior to the recent
financial crisis. During the crisis, however, the
shadow banking system’s vulnerabilities and fragility
were exposed, compelling the Federal Reserve and
other government agencies to provide emergency
support.

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www.newyorkfed.org/research

Top Blog Posts of Q2

O

ur Liberty Street Economics blog
publishes on economic topics twice a
week—more frequently when there is
a post on a newly released report or on
a pressing topic.

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Listed below are the top five posts in the
second quarter.
■

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Are Stocks Cheap? A Review of the Evidence
Fernando Duarte and Carlo Rosa
May 8 – 38,985 downloads

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Young Student Loan Borrowers Retreat from
Housing and Auto Markets
Meta Brown and Sydnee Caldwell
April 17 – 9,627 downloads

Crisis Chronicles: 300 Years of Financial Crises
(1620-1920)
James Narron and David Skeie
June 24 – 5,226 downloads
Grading Student Loans
Meta Brown, Andrew Haughwout, Donghoon Lee,
Maricar Mabutas, and Wilbert van der Klaauw
March 5 – 4,337 downloads
Do Big Cities Help College Graduates Find
Better Jobs?
Jaison Abel and Richard Deitz
May 20 – 4,203 downloads ■

Most Downloaded Publications

L

SSRN website, second-quarter 2013:

isted below are the most sought-after
Research Group articles and papers from
the New York Fed’s website and from the
Bank’s page on the Social Science Research
Network site.

■

New York Fed website, second-quarter 2013:
■

■

■

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Cash Dollars Abroad
Rebecca Hellerstein and William Ryan
Staff Reports, no. 400,
October 2009 – 16,353 downloads
Why Are Banks Holding So Many Excess
­Reserves?
Todd Keister and James McAndrews
Staff Reports, no. 380,
July 2009 – 4,197 downloads

■

The Corporate Governance of Banks
Jonathan R. Macey and Maureen O’Hara
Economic Policy Review, vol. 9, no. 1,
April 2003 – 257 downloads
Transparency, Financial Accounting Information,
and Corporate Governance
Robert M. Bushman and Abbie J. Smith
Economic Policy Review, vol. 9, no. 1,
April 2003 – 253 downloads
Determinants and Impact of Sovereign Credit
Ratings
Richard Cantor and Frank Packer
Economic Policy Review, vol. 2, no. 2,
October 1996 – 229 downloads
For lists of the top-ten downloads, visit our website.■

The Financial Crisis at the Kitchen Table: Trends
in Household Debt and Credit
Meta Brown, Andrew Haughwout, Donghoon Lee,
and Wilbert van der Klaauw
Current Issues in Economics and Finance,
vol. 19, no. 2, 2013 – 3,365 downloads

RESEARCH AND STATISTICS GROUP
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Research UPDATE ■ Number 2, 2013

Recently Published
Mary Amiti. 2013. “Import Competition and Quality
Upgrading,” with Amit Khandelwal. Review of
­Economics and Statistics 95, no. 2 (May): 476-90.

Thomas Eisenbach. 2013. “Macroeconomics with
Financial Frictions: A Survey,” with Markus Brunnermeier
and Yuliy Sannikov. In Daron Acemoglu, Manuel
Arellano, and Eddie Dekel, eds., Advances in Economics
and Econometrics. Tenth World Congress of the
Econometric Society. Vol. 2. Cambridge, U.K.:
Cambridge University Press.

Rajashri Chakrabarti. 2013. “Accountability with
Voucher Threats, Responses, and the Test-Taking
Population: Regression Discontinuity Evidence from
Florida.” Education Finance and Policy 8, no. 2
(Spring): 121-67.

Andreas Fuster. 2013. “What Goes Up Must Come
Down? Experimental Evidence on Intuitive Forecasting,” with John Beshears, James Choi, David Laibson,
and Brigitte Madrian. American Economic Review
103, no. 3 (May): 570-4. Papers and Proceedings of
the 125th Annual Meeting of the American Economic
Association.

Rajashri Chakrabarti. 2013. “Do Vouchers Lead to
Sorting under Random Private School Selection?
Evidence from the Milwaukee Voucher Program.”
Economics of Education Review 34, June: 191-218.
Marco Cipriani. 2013. “Like Mother Like Son?
Experimental Evidence on the Transmission of
Values from Parents to Children,” with Paola Giuliano
and Olivier Jeanne. Journal of Economic Behavior and
Organization 90, June: 100-11.

Tanju Yorulmazer. 2013. “Liquidity Hoarding,” with
Douglas Gale. Theoretical Economics 8, no. 2 (May):
291-324. ■

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media coverage of the Group’s work.

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Papers Presented
“Micro, Macro, and Strategic Forces in International
Trade Invoicing,” Linda Goldberg. Cornell University
seminar, Ithaca, New York, April 18. With Cédric Tille.

“The Gender Unemployment Gap,” Stefania Albanesi.
University of Uppsala seminar, Uppsala, Sweden,
May 21. With Ayşegül Şahin. Also presented
at a Stockholm School of Economics seminar,
Stockholm, Sweden, May 22; a Sveriges Riksbank
seminar, Stockholm, Sweden, May 23; and a Latin
American Studies Association–World Bank seminar,
Washington, D.C., May 31.

“Size, Complexity, and Liquidity Management:
Evidence from Foreign Banks in the United States,”
Linda Goldberg. Financial Crisis and the Global
Financial System, a conference sponsored by the
Bank of Japan’s Institute for Monetary and Economic
Studies, Tokyo, Japan, May 29.

“Jobless Recoveries and Gender-Biased Technological
Change,” Stefania Albanesi. Society for Economic
Dynamics annual meeting, Seoul, Korea, June 29.
With Ayşegül Şahin.

“Size and Complexity in Global Banking,”
Linda Goldberg. Global Banks, International Capital
Flows, and Financial Integration, a conference
cosponsored by the European Research Council, the
London Business School, the Federal Reserve Bank
of New York, and the Centre for Economic Policy
Research, London, England, April 12.

“The Impact of Housing Markets on Consumer Debt:
Credit Report Evidence from 1999 to 2012,”
Meta Brown. Midwest Economic Association
meetings, Columbus, Ohio, March 23. With Sarah
Stein and Basit Zafar. Also presented at a University
of North Carolina at Chapel Hill seminar, Chapel Hill,
North Carolina, April 17, and a New York University
conference, New York City, June 1.

“Geographical Reallocation and Unemployment
during the Great Recession: The Role of the Housing
Bust,” Fatih Karahan. 2013 Annual Search and
Matching Conference, University of Mainz, Mainz,
Germany, May 16. With Serena Rhee.

“Financial Education and the Debt Behavior of the
Young,” Meta Brown and Basit Zafar. Thirty-Ninth
Eastern Economic Association annual meetings,
New York City, May 10. With Jaya Wen.

“Unemployment Benefits and Unemployment in the
Great Recession: The Role of Macro Effects,”
Fatih Karahan. Seventh Annual Conference on
Macroeconomics across Time and Space, cosponsored by the Federal Reserve Bank of Philadelphia
and the National Bureau of Economic Research,
Philadelphia, Pennsylvania, May 3. With Marcus
Hagedorn, Iourii Manovskii, and Kurt Mitman. Also
presented at the North American Summer Meeting
of the Econometric Society, Los Angeles, California,
June 14, and the Society for Economic Dynamics
annual meeting, Seoul, Korea, June 28.

“The Forward Guidance Puzzle,” Marc Giannoni.
Twenty-First Centre for Economic Policy Research
European Summer Symposium in International
Macroeconomics, Izmir, Turkey, May 23. With
Marco Del Negro and Christina Patterson.
“The Inflation Output Trade-Off Revisited,”
Marc Giannoni. University of Tokyo seminar, Tokyo,
Japan, June 27. Also presented at the Society for
Economic Dynamics annual meeting, Seoul, Korea,
June 29. With Gauti Eggertsson.

“What Do Data on Millions of U.S. Workers Say about
Labor Income Risk?” Fatih Karahan. North American
Summer Meeting of the Econometric Society, Los
Angeles, California, June 16.

“Banking Globalization, Transmission, and Monetary
Policy Autonomy,” Linda Goldberg. Two Decades
of Inflation Targeting: Main Lessons and Remaining
Challenges, a conference sponsored by Sveriges
Riksbank, Stockholm, Sweden, June 3.

RESEARCH AND STATISTICS GROUP
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Research UPDATE ■ Number 2, 2013
“How Do Banks Scramble for Liquidity? Evidence
from the Asset-Backed Commercial Paper Freeze
of 2007,” Anna Kovner. Federal Reserve Bank of
Chicago Forty-Ninth Annual Conference on Bank
Structure and Competition, Chicago, Illinois, May 8.
With Viral Acharya and Gara Afonso.

“The Effects of the Saving and Banking Glut on
the U.S. Economy,” Andrea Tambalotti. Advances
in DSGE Models, a workshop at the University of
Milan Bicocca, Milan, Italy, June 13. With Alejandro
Justiniano and Giorgio Primiceri. Also presented at a
University of Padova seminar, Padova, Italy, June 18.

“The Pre-FOMC Announcement ‘Drift,’” David Lucca

“How Does Risk Management Influence Production
Decisions? Evidence from a Field Experiment,”
James Vickery. Kauffman Foundation–Brandeis
International Business School Fourth Entrepreneurial
Finance and Innovation Conference, Boston,
Massachusetts, June 10.

and Emanuel Moench. Western Finance Association
meetings, Incline Village, Nevada, June 20. Also
presented by Moench at a CIRANO (Center for
Interuniversity Research and Analysis on Organizations)/Bank of Canada workshop, Montreal, Quebec,
Canada, April 11.

“Securitization and the Fixed-Rate Mortgage,”
James Vickery. Federal Reserve Bank of Chicago
Forty-Ninth Annual Conference on Bank Structure
and Competition, Chicago, Illinois, May 10. With
Andreas Fuster. Also presented at the Western
Finance Association meetings, Incline Village,
Nevada, June 18.

“Forecasting through the Rear-View Mirror: Data
Revisions and Bond Return Predictability,” Emanuel
Moench. Western Finance Association meetings,
Incline Village, Nevada, June 19. With Eric Ghysels
and Casidhe Horan.
“Pricing TIPS and Treasuries with Linear Regressions,”
Emanuel Moench. Bank of Canada seminar, Ottawa,
Ontario, Canada, May 3. With Michael Abrahams,
Tobias Adrian, and Richard Crump.

“Credit Constraints, Subjective Expectations, and
College Choice in Urban Pakistan,” Basit Zafar.
Political Economy of the Muslim World, a conference
jointly organized by the Baker Institute of Public
Policy at Rice University and the Association for
Analytic Learning about Islam and Muslim Societies,
Rice University, Houston, Texas, April 6. With
Adeline Delavande.

“Banking across Borders,” Friederike Niepmann.
Deutsche Bundesbank seminar, Frankfurt, Germany,
April 11. Also presented at the Twenty-First Centre
for Economic Policy Research European Summer
Symposium in International Macroeconomics, Izmir,
Turkey, May 21.

“Determinants of College Major Choice: Identification
Using an Information Experiment,” Basit Zafar.
University of Edinburgh seminar, Edinburgh,
Scotland, May 20. With Matthew Wiswall.

“Banking across Borders with Heterogeneous
Banks,” Friederike Niepmann. CESifo Annual Area
Conference on Global Economy, Munich, Germany,
May 17.

“Gender, Competitiveness, and Labor Market Expectations,” Basit Zafar. University of Essex seminar, Essex,
United Kingdom, May 22. With Ernesto Reuben and
Matthew Wiswall. ■

“U.S. Dollar Funding Premium of Global Banks,”
Asani Sarkar. Eighth annual conference of the
Financial Intermediation Research Society,
Dubrovnik, Croatia, May 31. With Warren Hrung.

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www.newyorkfed.org/research

New Titles in the Staff Reports Series
Macroeconomics and Growth

No. 611, April 2013
A Bargaining Theory of Trade Invoicing
and Pricing
Linda Goldberg and Cédric Tille

No. 613, April 2013
The Gender Unemployment Gap
Stefania Albanesi and Ayşegül Şahin
Albanesi and Şahin study the evolution of gender
differences in unemployment from a long-run
perspective and over the business cycle.

Goldberg and Tille develop a theoretical model
of international trade pricing in which individual
exporters and importers bargain over the transaction
price and exposure to exchange rate fluctuations.

No. 615, May 2013
Dynamic Effects of Credit Shocks in a Data-Rich
Environment
Jean Boivin, Marc P. Giannoni, and Dalibor Stevanovic

No. 614, May 2013
Going Global: Markups and Product Quality
in the Chinese Art Market
Jennie Bai, Jia Guo, and Benjamin Mandel

The authors reexamine the evidence on the propagation mechanism of credit shocks to economic activity.
Such shocks are found to have important effects on
real activity measures, aggregate prices, leading
indicators, and credit spreads.

The authors exploit some special features of the Chinese
fine-art market to study the influence of quality and
markups on international prices.

No. 618, May 2013
Inflation in the Great Recession and
New Keynesian Models
Marco Del Negro, Marc P. Giannoni, and
Frank Schorfheide

No. 610, April 2013
Up Close It Feels Dangerous: “Anxiety” in the Face
of Risk
Thomas M. Eisenbach and Martin C. Schmalz

Microeconomics

Eisenbach and Schmalz model an “anxious” agent as
more risk averse to imminent, rather than distant,
risk. They show that costly delegation of investment
decisions is a strategy for coping with agent anxiety.

The authors use a standard DSGE model, available
prior to the recent financial crisis and estimated using
data up to third-quarter 2008, to explain the behavior
of key macroeconomic variables since the crisis.

No. 612, April 2013
Shared Knowledge and the Coagglomeration
of Occupations
Todd M. Gabe and Jaison R. Abel

No. 621, May 2013
Inflation Risk and the Cross Section of Stock Returns
Fernando M. Duarte

Occupations with similar knowledge requirements
tend to coagglomerate, or locate near one another,
and the importance of this shared knowledge is
greater in metropolitan areas than in states.

Duarte argues that the inflation risk premium arises
because high inflation lowers expectations of future
real consumption growth.

International
No. 609, April 2013
Banking across Borders with Heterogeneous Banks
Friederike Niepmann

No. 617, May 2012
The Impact of Housing Markets on Consumer
Debt: Credit Report Evidence from 1999 to 2012
Meta Brown, Sarah Stein, and Basit Zafar

Niepmann develops a general equilibrium model of
trade and foreign direct investment in banking to
explain the heterogeneity in banks’ foreign operations.

The authors investigate the effects of large swings in the
housing market on nonmortgage borrowing, including
student, credit card, auto, and home equity debts.

RESEARCH AND STATISTICS GROUP
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Research UPDATE ■ Number 2, 2013

Banking and Finance

Quantitative Methods

No. 616, May 2013
The Risk of Fire Sales in the Tri-Party Repo Market
Brian Begalle, Antoine Martin, James McAndrews, and
Susan McLaughlin

No. 619, May 2013
Time-Varying Structural Vector Autoregressions
and Monetary Policy: A Corrigendum
Marco Del Negro and Giorgio Primiceri

The authors conclude that limited tools are available
to mitigate the risk of pre-default fire sales and that
no established tools currently exist to mitigate the
risk of post-default sales.

Del Negro and Primiceri correct a mistake in the
estimation algorithm of Primiceri’s 2005 time-varying
structural vector autoregression model and propose a
new algorithm for the estimation of VAR or DSGE
models with stochastic volatility. ■

No. 620, May 2013
Trading Partners in the Interbank Lending Market
Gara Afonso, Anna Kovner, and Antoinette Schoar
There is large and persistent heterogeneity in the
extent to which some banks concentrate lending and
borrowing across counterparties, observe Afonso,
Kovner, and Schoar.
No. 622, May 2013
The Microstructure of China’s Government
Bond Market
Jennie Bai, Michael Fleming, and Casidhe Horan
The authors describe the history and structure of the
Chinese government bond market and assess its
liquidity and informational efficiency.

federal reserve bank of new york
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www.newyorkfed.org/research

Research and Statistics Group Publications and
Papers: April–June 2013
Staff Reports

Publications are available at on our webpage or may
be accessed by clicking on the publication titles below.

No. 609, April 2013
Banking across Borders with Heterogeneous Banks
Friederike Niepmann

Economic Policy Review,
VOL. 19, NO. 1

No. 610, April 2013
Up Close It Feels Dangerous: “Anxiety” in the Face
of Risk
Thomas M. Eisenbach and Martin C. Schmalz

TBA Trading and Liquidity in the Agency
MBS Market
James Vickery and Joshua Wright
Unintended Consequences of School
Accountability Policies: Evidence from Florida
and Implications for New York
Rajashri Chakrabarti and Noah Schwartz

No. 611, April 2013
A Bargaining Theory of Trade Invoicing
and Pricing
Linda Goldberg and Cédric Tille

Trading Activity and Price Transparency in the
Inflation Swap Market
Michael J. Fleming and John R. Sporn

No. 612, April 2013
Shared Knowledge and the Coagglomeration
of Occupations
Todd M. Gabe and Jaison R. Abel

Current Issues in Economics
and Finance, Vol. 19

No. 613, April 2013
The Gender Unemployment Gap
Stefania Albanesi and Ayşegül Şahin

No. 2
The Financial Crisis at the Kitchen Table: Trends in
Household Debt and Credit
Meta Brown, Andrew Haughwout, Donghoon Lee, and
Wilbert van der Klaauw

No. 614, May 2013
Going Global: Markups and Product Quality
in the Chinese Art Market
Jennie Bai, Jia Guo, and Benjamin Mandel

No. 3
Securities Loans Collateralized by Cash:
Reinvestment Risk, Run Risk, and Incentive Issues
Frank Keane

No. 615, May 2013
Dynamic Effects of Credit Shocks in a Data-Rich
Environment
Jean Boivin, Marc P. Giannoni, and Dalibor Stevanovic

No. 4
New Jersey’s Abbott Districts: Education Finances
during the Great Recession
Rajashri Chakrabarti and Sarah Sutherland

No. 616, May 2013
The Risk of Fire Sales in the Tri-Party Repo Market
Brian Begalle, Antoine Martin, James McAndrews, and
Susan McLaughlin

No. 5
Paying Paul and Robbing No One: An Eminent
Domain Solution for Underwater Mortgage Debt
Robert Hockett

No. 617, May 2013
The Impact of Housing Markets on Consumer
Debt: Credit Report Evidence from 1999 to 2012
Meta Brown, Sarah Stein, and Basit Zafar

RESEARCH
RESEARCH AND
ANDSTATISTICS
STATISTICSGROUP
GROUP
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Research UPDATE ■ Number 2, 2013
No. 618, May 2013
Inflation in the Great Recession and
New Keynesian Models
Marco Del Negro, Marc P. Giannoni, and
Frank Schorfheide

April 12
Historical Echoes: The Invention of the ATM—
A Case of Multiple Independent Discovery?
Amy Farber
April 15
Do Treasury Term Premia Rise around
Monetary Tightenings?
Tobias Adrian, Richard Crump, and Emanuel Moench

No. 619, May 2013
Time-Varying Structural Vector Autoregressions
and Monetary Policy: A Corrigendum
Marco Del Negro and Giorgio Primiceri

Just Released: April Empire State Manufacturing
Survey
Jason Bram and Richard Deitz

No. 620, May 2013
Trading Partners in the Interbank Lending Market
Gara Afonso, Anna Kovner, and Antoinette Schoar

April 17
Young Student Loan Borrowers Retreat from
Housing and Auto Markets
Meta Brown and Sydnee Caldwell

No. 621, May 2013
Inflation Risk and the Cross Section of Stock Returns
Fernando M. Duarte

April 19
Historical Echoes: Fedspeak as a Second Language
Amy Farber

No. 622, May 2013
The Microstructure of China’s Government
Bond Market
Jennie Bai, Michael Fleming, and Casidhe Horan

April 22
The Effect of Superstorm Sandy on the Macroeconomy
M. Henry Linder, Richard W. Peach, and Sarah K. Stein

Liberty Street Economics
Blog

Japanese Inflation Expectations, Revisited
Benjamin R. Mandel and Geoffrey Barnes

April 1
How Liquid Is the Inflation Swap Market?
Michael Fleming and John Sporn

May 6
Uncertainty, Liquidity Hoarding, and Financial Crises
Tanju Yorulmazer

April 3
I Want My Money Now: The Highs and Lows of
Payments in Real Time
Parinitha Sastry and David Skeie

May 8
Are Stocks Cheap? A Review of the Evidence
Fernando Duarte and Carlo Rosa

Just Released: February Report Points to Moderate
Regional Economic Growth
Jason Bram and James Orr

May 10
Historical Echoes: What Do the New York Fed and
Grand Central Terminal Have in Common?
Amy Farber

April 5
Historical Echoes: Central Bank and Paper Money
Innovator Given Death Sentence for His Efforts
Amy Farber

May 13
Capital Controls, Currency Wars, and International
Cooperation
Bianca De Paoli and Anna Lipińska

April 8
Does Import Competition Improve the Quality
of Domestic Goods?
Mary Amiti and Amit Khandelwal
April 10
Foreclosures Loom Large in the Region
Jaison R. Abel and Richard Deitz

federal reserve bank of new york
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www.newyorkfed.org/research
May 14
Just Released: The Geography of Student Debt
Andrew Haughwout, Donghoon Lee,
Wilbert van der Klaauw, and Joelle Scally

May 31
Historical Echoes: How to Choose a Bank, Past
and Present
Amy Farber

May 15
My Two (Per)cents: How Are American Workers
Dealing with the Payroll Tax Hike?
Basit Zafar, Max Livingston, and Wilbert van der Klaauw

June 3
Data Link Helps Shed Light on Banks and
Public Equity
Anna Kovner, Phoebe White, and Lily Zhou

May 17
Historical Echoes: The “Mississippi Bubble”—When
One’s Back Could Be Rented Out as a Writing Desk
Amy Farber

June 5
Drilling Down into Core Inflation: Goods
versus Services
M. Henry Linder, Richard Peach, and Robert Rich

May 20
Do Big Cities Help College Graduates Find
Better Jobs?
Jaison R. Abel and Richard Deitz

Just Released: New York’s Latest Beige Book Report
Points to Sustained Growth
Jaison R. Abel and Jason Bram
June 24
Crisis Chronicles: 300 Years of Financial Crises
(1620–1920)
James Narron and David Skeie

May 22
Foreign Borrowing in the Euro Area Periphery:
The End Is Near
Matthew Higgins and Thomas Klitgaard

June 26
States Are Recovering Lost Jobs at Surprisingly
Similar Rates
Jason Bram and James Orr

May 23
Just Released: The New York Fed Staff Forecast—
May 2013
Jonathan McCarthy and Richard Peach

June 27
Just Released: Are Recent College Graduates
Finding Good Jobs?
Jaison R. Abel and Richard Deitz

May 24
Historical Echoes: Seeing through the Blackout
of 1965 and Other Trials
Amy Farber

June 28
Historical Echoes: Skull Bumps and
Economic Behavior
Amy Farber

May 29
Piggy Banks
Donald P. Morgan and Katherine Samolyk

The views expressed in the publications, papers, and posts summarized in Research Update are those of the authors
and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System.
federal reserve bank of new york RESEARCH AND STATISTICS GROUP
13