Reports

“Recent work helps shed light on this debate by assessing the effect of U.S. monetary policy on foreign firms. Using cross-country firm-level data for 1995—2019, this research examines how U.S. monetary policy shapes global firms’ sales and investment spending. The richness of the sample enables the authors to explore not merely the impact of these shocks…

This is a monthly report about the status of the U.S. economy, published by the NY Fed.

“The latest population adjustments don’t significantly affect the basic story of the overall LFP rate. This rate changed little over the course of 2022 and is still lower than it was pre-COVID, and the pre-COVID LFP rate was probably higher than the published data suggest. The biggest factor influencing the recent behavior of the overall…

Baseline Scenario “The baseline scenario for the United States features an initial slowdown and then a gradual recovery. The unemployment rate rises steadily from just over 3½ percent at the end of 2022 to near 5 percent by the first quarter of 2024, before declining to just over 4½ percent by the end of the…

“International spillovers of U.S. monetary policy decisions have broad implications for foreign economies and market participants. During periods of high volatility in international asset markets, men­tions of foreign countries in FOMC minutes may explain some of the movements of foreign asset prices. In sovereign debt markets, spillovers provide informational content on the term structure of…

“In conclusion, there is some evidence, although weak and not recent, that the real consumption cycle declines during episodes of monetary policy tightening. In 2022, consumption remained approximately 2% above trend. Additionally, financial conditions—shown by the financial conditions index—improved at the end of 2022 despite the Fed tightening monetary policy. Looking toward the future, it…

“We have explored the optimal tax-and-transfer policy in an environment with rich household heterogeneity and where the government has many tools for raising tax revenue. The optimal policy places very high tax rates on capital income and on consumption. Labor income taxes feature high top tax rates but also a progressive schedule similar to that…

“In this paper, we identify the effect of government debt on banks’ balance sheet health and credit provision. We provide a theoretical model to back our measure of bank financing constraints. We use data from the universe of banks in Turkey during 1997–2002 to demonstrate the financial constraint on banks and identify and quantify the…

“The collateral channel of investment is one of the main ways economists connect asset-price fluctuations and economic recessions. When asset prices collapse, firms’ liquidation values of assets decline, so firms have more difficulty securing borrowing. Data from publicly listed companies confirm this result: When real estate prices decline, companies that own real estate decrease their…