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Economic Research

Liberty Street Economics
The R&D Puzzle in U.S. Manufacturing Productivity Growth
Since firms’ investment in research and development for new technologies constitutes a central driver of productivity growth, the authors explore if an observed slowdown in productivity may be due to a decline in R&D. Their results suggest that “R&D intensity” has been increasing, even as productivity growth declines. This points to a decline in the effectiveness of R&D in generating productivity growth in U.S. manufacturing.
By Danial Lashkari and Jeremy Pearce
Every Dollar Counts: The Top 5 Liberty Street Economics Posts of 2024
High prices and rising debt put pressure on household budgets this year, so it’s little wonder that the most-read Liberty Street Economics posts of 2024 dealt with issues of financial stress. These include rising delinquency rates, grocery price inflation, and the spread of “buy now, pay later” plans, along with a potential challenge to the U.S. dollar’s status in the international monetary system.
The New York Fed DSGE Model Forecast—December 2024
The authors present an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. They describe their forecast and its change since September 2024.
By Sophia Cho, Marco Del Negro, Ibrahima Diagne, Pranay Gundam, Donggyu Lee, and Brian Pacula
Anatomy of the Bank Runs in March 2023
Runs have plagued the banking system for centuries and returned to prominence with the bank failures in early 2023. Building on research from their recently published Staff Report, the authors use data on wholesale and retail payments to understand the bank runs of March 2023. Which banks were run on? How were they different from other banks? And how did they respond to the run?
By Marco Cipriani, Thomas Eisenbach, and Anna Kovner
Do Import Tariffs Protect U.S. Firms?
One key motivation for imposing tariffs on imported goods is to protect U.S. firms from foreign competition. The authors delve into the cross-sectional patterns in search of segments of the economy that may have benefited from import protection. What they find, instead, is that most firms suffered large valuation losses on tariff announcement days. They also document that these financial losses translated into future reductions in profits, employment, sales, and labor productivity.
By Mary Amiti, Matthieu Gomez, Sang Hoon Kong, and David E. Weinstein
Using Stock Returns to Assess the Aggregate Effect of the U.S.-China Trade War
Estimating the aggregate impact of the U.S.-China trade war on the U.S. economy is challenging because tariffs can affect the economy through many different channels. In addition to changing relative prices, tariffs can impact productivity and economic uncertainty. Using financial market data, the authors suggest that the trade war between the U.S. and China from 2018 to 2019 had a negative effect on the U.S. economy that was substantially larger than past estimates.
By Mary Amiti, Matthieu Gomez, Sang Hoon Kong, and David E. Weinstein
RESEARCH TOPICS
Applied Macroeconomics
and Econometrics Center
The mission of the Applied Macroeconomics and Econometrics Center (AMEC) is to provide intellectual leadership in the central banking community in the fields of macro and applied econometrics.

Data Releases
Global Supply Chain Pressure Index
(Updated: Monthly)

Measuring the Natural Rate of Interest
(Updated: Quarterly)

Multivariate Core Trend Inflation
(Updated: Monthly)

The New York Fed DSGE Model
(Updated: Quarterly)

New York Fed Staff Nowcast
(Updated: Weekly)

Outlook-at-Risk
(Updated: Monthly)

Treasury Term Premia
(Updated: Daily)

Yield Curve as a Leading Indicator
(Updated: Monthly)
Center for Microeconomic Data
Reserve Demand Elasticity (RDE)
RDE estimates provide a quantitative measure of the ampleness of reserves in the U.S. banking system in real time. New data are published monthly.
Decorative Image - variety of polaroid portraits of diverse group of people
Equitable Growth Indicators (EGIs)   
A measure of disparities across four economic outcomes—inflation, real and nominal earnings, employment, and real and nominal consumer spending.
Corporate Bond Market Distress Index (CMDI)
The CMDI is a summary metric of corporate bond market functioning based on information from multiple sources including measures of primary market issuance and pricing, secondary market pricing and liquidity conditions, and the relative pricing between traded and nontraded bonds. It updates monthly.
Regional Surveys
Monthly surveys conducted by the New York Fed track the sentiment of executives at regional manufacturing and service-sector firms regarding business conditions.

Data Releases
Empire State Manufacturing Survey
(Updated: Monthly)

Business Leaders Survey
(Updated: Monthly)

Regional Business Surveys:
Special Topics
(Updated: Quarterly)
Regional Employment Trends
These interactive charts track employment in state and metro regions in the Federal Reserve’s Second District, utilizing the New York Fed’s early benchmarks of payroll employment data. It updates monthly.
Mapping Home Price Changes
Explore year-over-year changes in home prices since 2003, both regionally and nationally, using this dynamic map — updated with new home price index data on a monthly basis. Hover over a county for granular data.
Early Benchmarked Employment Data
Monthly releases of early benchmarked employment figures for New York State, New Jersey, Puerto Rico, and the U.S. Virgin Islands, as well as the metropolitan areas in New York and Northern New Jersey
The Labor Market for Recent College Graduates
The labor market for recent college graduates weakened somewhat in the third quarter of 2024. The unemployment rate ticked up to 5.3 percent, while the underemployment rate held steady at around 40.6 percent.
Recent Publications
When It Rains, It Pours: Cyber Vulnerability and Financial Conditions
How does systemic cyber risk interact with other financial vulnerabilities? To study how cyber vulnerability evolves over the financial cycle, the authors analyze the market turmoil at the onset of the COVID-19 pandemic. They find that the systemic consequences of cyberattacks are heightened when markets are more volatile and when financial intermediaries’ balance sheets are strained. Furthermore, official-sector interventions to stabilize financial markets likely have a mitigating, if unintended, effect on cyber vulnerability.
Thomas M. Eisenbach, Anna Kovner, and Michael Junho Lee, Economic Policy Review 31, no. 1
Repo Intermediation and Central Clearing: An Analysis of Sponsored Repo
Through the past decade, the Treasury market has experienced several episodes when market functioning has been severely disrupted. These disruptions highlighted the important role of intermediaries and raised questions on identifying the drivers of spreads charged by these firms. Although significant work has been done considering these issues for some Treasury securities markets, little has been done on sponsored repo, where dealer-to-customer trades are centrally cleared. The authors evaluate the forces behind a dealer-intermediary’s decision to move a bilateral repo transaction with a customer into central clearing.
Adam Copeland and R. Jay Kahn, Staff Report 1140, December 2024
Corporate Debt Structure over the Global Credit Cycle
The authors study the determinants of prepayment at the instrument level for a large cross-section of firms around the world, how such prepayment affects firm-level debt structure, and how global credit conditions affect the ability and willingness of firms to refinance their debt early. Their results show that the impact of global credit conditions on firms' debt structure can be traced back to how instrument-level prepayment incentives change over the global credit cycle.
Nina Boyarchenko and Leonardo Elias, Staff Report 1139, December 2024
The Long-Term Rise of Labor Market Detachment: Evidence from Local Labor Markets
The authors develop a measure of chronic joblessness in the United States—termed the detachment rate—that identifies those who have been out of the labor force for more than a year. They show that the detachment rate doubled for prime-age men since the early 1980s and rose by a quarter for prime-age women since 2000. The rate increased more in places with weak local economies, particularly those with job loss due to globalization and technological change.
Jaison R. Abel and Richard Deitz, Staff Report 1138, November 2024
Discount Window Stigma After the Global Financial Crisis
The authors study Discount Window (DW) stigma, the reluctance to access the Federal Reserve’s lender-of-last-resort facility, between 2014 and 2024. Despite increased usage since 2020, they find conclusive evidence that the DW is stigmatized, especially among smaller banks and when financial markets experience disruptions. The authors also identify new determinants and consequences of DW stigma and discuss the implications for the provision of emergency liquidity.
Olivier Armantier, Marco Cipriani, and Asani Sarkar, Staff Report 1137, November 2024
The Financial Stability Implications of Digital Assets
In recent years, financial activity associated with digital assets has grown significantly, with periods of exponential growth and multiple precipitous crashes. The authors consider the potential vulnerabilities associated with the digital asset ecosystem. They argue that while the contribution of digital assets to system risk has been limited to date, the observed fragilities in the digital asset space could destabilize the broader financial system if the digital ecosystem becomes more systemic.
Pablo D. Azar, Garth Baughman, Francesca Carapella, Jacob Gerszten, Arazi Lubis, J.P. Perez-Sangimino, David E. Rappoport, Chiara Scotti, Nathan Swem, Alexandros P. Vardoulakis, and Aurite Werman, Economic Policy Review 30, no. 2, November 2024
Firms’ Supply Chain Adaptation to Carbon Taxes
The authors provide evidence on how firms’ supply chain decisions adapt in response to carbon taxes. By constructing a novel dataset using information from the European Union’s Emissions Trading System (EU ETS) and Carbon Border Adjustment Mechanism, they demonstrate that French firms modified their sourcing of dirty products as the EU ETS tightened. Specifically, firms increased imports from non-ETS countries, leading to carbon leakage both in terms of trade shares and at the extensive margin, as the firms established new supply relationships with dirty non-ETS foreign producers.
Pierre Coster, Julian di Giovanni, and Isabelle Mejean, Staff Report 1136, November 2024
Clustering in Natural Disaster Damages
Economists have primarily studied the effects of natural disasters using county-by-month level datasets, which requires implicitly assuming that losses from natural disasters are independently distributed across space and time. On the other hand, the climate science literature finds consistent evidence of clustering in natural disaster occurrences, where disasters tend to be concentrated either in certain regions or in short windows of time. This paper introduces the concept of natural disaster clustering to the economics literature.
Jacob Kim-Sherman and Lee Seltzer, Staff Report 1135, November 2024
RESEARCH SERIES
Economic Inequality
This ongoing Liberty Street Economics series analyzes disparities in economic and policy outcomes by race, gender, age, region, income, and other factors.
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