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2017 Economic Commentaries

  • How Small Banks Deal with Large Shocks

    Kristle Cortés

    Recent research has focused on the occurrence of natural disasters to study how small community banks adjust their typical way of doing business to respond to large shocks. The research finds that banks strategically adjust their business in three ways to meet the increased demand for capital after a natural disaster. Read More

  • The Federal Funds Market since the Financial Crisis

    Ben R. Craig Sara Millington

    Through the federal funds market, commercial banks used to supply each other with overnight liquidity. But since the financial crisis, the banking system has been awash in reserves and the federal funds rate has been near zero, leaving banks little incentive to participate. Still, the market continues to operate, but it has changed. Read More

  • Lingering Residual Seasonality in GDP Growth

    Kurt G. Lunsford

    Measuring economic growth is complicated by seasonality, the regular fluctuation in economic activity that depends on the season of the year. The Bureau of Economic Analysis uses statistical techniques to remove seasonality from its estimates of GDP, and, in 2015, it took steps to improve the seasonal adjustment of data back to 2012. I show that residual seasonality in GDP growth remains even after these adjustments, has been a longer-term phenomenon, and is particularly noticeable in the 1990s. The size of this residual seasonality is economically meaningful and has the ability to change the interpretation of recent economic activity. Read More

  • Trends in Revenues at US Colleges and Universities, 1987-2013

    Peter L. Hinrichs

    This Economic Commentary studies trends in inflated-adjusted revenues per student at US colleges and universities in broad revenue categories between 1987 and 2013. The findings show that, as widely perceived, tuition revenue has risen over time at both public and private institutions. Read More

  • Wage Growth after the Great Recession

    Roberto Pinheiro Meifeng Yang

    We show that the sluggishness of nominal wage growth since the Great Recession is due to weak growth in labor productivity and lower-than-expected inflation. Since 2014, the trend has reversed. Read More

  • Parental Proximity and the Earnings Consequences of Job Loss

    Patrick Coate Pawel Krolikowski Mike Zabek

    We find post-job-loss earnings recovery is faster for young adults who live near their parents than for young adults who live farther away. This positive effect diminishes gradually as the distance to one’s parents increases. Most of the effect is driven by higher wages after job displacement, not by differences in the number of hours worked. The effect is not present for older workers, who may be caring for elderly parents. Read More

  • The State of States’ Unemployment in the Fourth District

    Murat Tasci Caitlin Treanor Christopher Vecchio

    Evaluating what constitutes a “normal” level for the unemployment rate is an important issue for policymakers, who need to assess how close the economy is to full employment. We introduce a framework that enables us to calculate the normal unemployment rate for each of the four states in the Fourth District and compare that rate to the national normal rate. We conclude that these states and the District as a whole have very little labor market slack left from the Great Recession. Read More

  • Monetary Policy and Inequality

    Pedro S. Amaral

    This Commentary examines the link between monetary policy and income and wealth inequality by reviewing the theoretical channels that have been proposed and examining the empirical evidence on their importance. The analysis suggests that the magnitude of any redistributive consequences of conventional monetary policy seems to be small. Evidence that unconventional monetary policies have led to increases in inequality is still inconclusive. Read More