Reports

“The financial stress associated with the failures of Silicon Valley Bank, Signature Bank and, more recently, First Republic Bank remind us that modern economies still depend on traditional financial institutions. And even with mitigating policies such as central bank emergency lending programs and deposit insurance, bank survival depends on bank executives properly managing assets and liabilities.”

“We show that the banking system has seen a considerable decline in deposit funding since the start of the current monetary policy tightening cycle in March 2022. The speed of deposit outflows increased during March 2023, following the run on SVB, with the most acute outflows concentrated in a relatively narrow segment of the banking…

“We present a production economy with nominal price rigidities that explains several asset pricing facts, including a downward-sloping term structure of the equity premium, upward sloping term structures of nominal and real interest rates, and the cyclical variation of the term structures. In the model, after a productivity shock a countercyclical labor share exacerbates the…

“Our analysis shows that while underlying inflation could ease to near 2 percent sometime next year, its path depends crucially on the evolution of future inflation. We also show that if inflation surprises to the upside and decays more slowly, underlying inflation could converge to approximately 3 percent and risk becoming embedded in the economy.…

“This Economic Commentary combines data, economic theory, and narrative information around historical events to empirically assess the key drivers of inflation in the pandemic period since early 2021. According to estimates from one of our approaches, both aggregate demand and supply factors have contributed significantly to high inflation. Under some more stringent but potentially debatable…

“One view of customers’ withdrawals from crypto-asset platforms in 2022 is that market discipline has effectively punished firms that took excessive risks and committed other abuses in attempting to pay high returns to customers. At the same time, market discipline is small solace to the hundreds of thousands, if not millions, of retail users who…

“What determines consumers’ financial behavior? Can income and demographic attributes explain why some consumers have a bank account or a credit card while others do not, or why some credit cardholders revolve their balances while others diligently pay their debts every month? Using detailed data collected from consumer surveys, we find that while demographics and…

“Job gains exceeded output growth in 2022, bringing GDP per worker back down to its trend level after being well above for an extended period. Employment is consequently set to grow slower than output going forward, as it typically does. Breaking down the GDP per worker by industry, though, shows a significant divergence between the…

“In this article, we presented recent research analyzing the role of labor costs in determining the price level. Not counting the current episode, inflation has risen much more slowly during the expansions since 2000. This pattern is associated with a slowdown in core goods inflation, which may have slowed because higher wages do not pass…

“The all items less food and energy index rose 5.5 percent over the last 12 months.” “Indexes which increased in April include shelter, used cars and trucks, motor vehicle insurance, recreation, household furnishings and operations, and personal care. The index for airline fares and the index for new vehicles were among those that decreased over…