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Economic Research

Liberty Street Economics
What Do Climate Risk Indices Measure?
As interest in the economic impacts of climate change grows, several indices have been developed to quantify climate risks. Various approaches have been employed, utilizing firm-level emissions data, financial market data (from equity and derivatives markets), or textual data. Focusing on the latter approach, the authors conduct descriptive analyses of six text-based climate risk indices from published or well-cited papers, highlighting their differences and commonalities.
By Hyeyoon Jung and Oliver Hannaoui
Exposure to Generative AI and Expectations about Inequality
With the rise of generative AI (genAI), many worry about its potential displacement effects in the labor market and its implications for income inequality. In supplemental questions to the February 2024 Survey of Consumer Expectations, the authors asked a representative sample of U.S. residents about their experience with genAI tools. They find that relatively few people have used genAI, but those who have used it have a relatively bleak outlook on its impacts on jobs and future inequality.
By Natalia Emanuel and Emma Harrington
Are Nonbank Financial Institutions Systemic?
The authors provide a quantitative assessment of systemic risk stemming from nonbank financial sectors. Even though these sectors have heterogeneous business models, ranging from insurance to trading and asset management, they find that the systemic risk of these sectors has common variation, and this commonality has increased over time. Moreover, nonbank sectors tend to become more systemic when banking sector systemic risk increases.
By Andres Aradillas Fernandez, Martin Hiti, and Asani Sarkar
The Central Banking Beauty Contest
Expectations can play a significant role in driving economic outcomes, but how well do central banks understand the expectations of market participants—and vice versa? The authors develop a model that features a dynamic game between a monetary authority and a set of market participants. This game’s main novelty is that each side attempts, with varying degrees of accuracy, to forecast the other’s beliefs, resulting in new findings regarding the levels and trajectories of inflation.
By Gonzalo Cisternas and Aaron Kolb
Flood Risk Outside Flood Zones: A Look at Mortgage Lending in Risky Areas
In support of the National Flood Insurance Program, the Federal Emergency Management Agency creates flood maps that indicate areas with high flood risk, where mortgage applicants must buy flood insurance. However, these maps are discrete, whereas the underlying flood risk may be continuous, and they are sometimes outdated. The authors examine what types of lenders are aware of this “unmapped” flood risk and how they adjust their lending practices in those regions.
By Kristian Blickle, Evan Perry, and João A.C. Santos
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
Labor market conditions improved slightly for recent college graduates in the second quarter of 2024. The unemployment rate edged down to 4.5 percent and the underemployment rate inched lower to 40.5 percent.
Recent Publications
Demographic Differences in Letters of Recommendation for Economics Ph.D. Students
Letters of recommendation from faculty advisors play a critical role in the job market for Ph.D. economists. The authors analyze 6,400 letters of recommendation for more than 2,200 economics and finance Ph.D. graduates from 2018 to 2021. They introduce a new measure of letter quality and find that female, Asian, and Black or Hispanic candidates are all less likely to be recommended to top academic departments, even after controlling for other letter characteristics. They also find that early career outcomes are influenced by letter characteristics.
Beverly Hirtle and Anna Kovner, Staff Report 1129, October 2024
Wage Growth and Labor Market Tightness
The authors highlight the importance of two measures of labor market tightness in determining wage growth: the quits rate, and vacancies per effective searcher (V/ES)—where searchers include both employed and non-employed job seekers. Amongst a broad set of indicators of labor market tightness, they find that these two measures are independently the most strongly correlated with wage inflation and also predict wage growth well in out-of-sample forecasting exercises.
Sebastian Heise, Jeremy Pearce, and Jacob P. Weber, Staff Report 1128, October 2024
Climate-Related Financial Stability Risks for the United States: Methods and Applications
Policymakers are keenly interested in assessing the resilience of the financial system in relation to climate change, leading to a surge of academic research on policy options. The authors review the burgeoning literature on climate-related risks, focusing especially on existing methodologies that have been used to study U.S. climate-related financial stability risks. They suggest ways these methodologies could be combined to obtain a more complete understanding of climate risks and vulnerabilities.
Celso Brunetti, Matteo Crosignani, Benjamin Dennis, Gurubala Kotta, Donald P. Morgan, Chaehee Shin, and Ilknur Zer, Economic Policy Review 30, no. 1, October 2024.
Need for Speed: Quality of Innovations and the Allocation of Inventors
The slowdown in productivity growth has become a central academic and policy discussion. The authors study how the tradeoff between speed and quality in innovation interacts with firm dynamics, concentration, and economic growth. They develop an endogenous growth model that incorporates the speed-quality tradeoff and show that allocating less labor toward speed increases growth, particularly in the presence of private benefits to innovation and spillovers in innovation.
Santiago Caicedo and Jeremy Pearce, Staff Report 1127, October 2024
Do Cost-of-Living Shocks Pass Through to Wages?
When firms set both prices and wages, how do workers’ wages respond to cost-of-living shocks, and how large is this response? To answer this, the authors develop a novel, tractable New Keynesian model that implies that the quits rate is the dominant predictor of nominal wage growth in the wage Phillips curve, consistent with recent U.S. data. They analyze the propagation of cost-of-living shocks in the model economy.
Justin Bloesch, Seung Joo Lee, and Jacob P. Weber, Staff Report 1126, October 2024
Inequality Within Countries is Falling: Underreporting Robust Estimates of World Poverty, Inequality, and the Global Distribution of Income
Household surveys suffer from persistent and growing underreporting. The authors seek to adjust household survey inequality measures to make them comparable to and consistent with more reliable national accounts data to accurately measure economic growth. They propose a methodology that enables them to infer the degree of adjustment required by comparing the regional distributions of national accounts aggregates and of household survey means.
Maxim Pinkovskiy, Xavier Sala-i-Martin, Kasey Chatterji-Len, and William Nober. Staff Report 1125, September 2024
The Pay and Non-Pay Content of Job Ads
How informative are job ads about the actual pay and amenities offered by employers? Using a comprehensive database of job ads posted by Norwegian employers, the authors develop a methodology to systematically classify the information on both pay and non-pay job attributes advertised in vacancy texts. Their findings suggest that publicly advertised job attributes are meaningful predictors of employer attractiveness, and non-pay attributes are about as predictive as pay-related attributes.
Richard Audoly, Manudeep Bhuller, and Tore Adam Reiremo, Staff Report 1124, September 2024
Payout Restrictions and Bank Risk-Shifting
What are the effects of payout restrictions on bank risk-shifting? To answer this question, the authors examine the restrictions imposed on U.S. banks during the COVID crisis. Using a high-frequency differences-in-differences empirical strategy, they show that when share buybacks are banned and dividends restricted, banks’ equity prices fall while their credit default swap spreads and bond yields decline. These results indicate that payout restrictions shift risk from debt holders to equity holders.
Fulvia Fringuellotti and Thomas Kroen, Staff Report 1123, September 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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