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Nonbanks and Banks: Alone or Together?
Nonbank financial institutions constitute a variety of entities that have become important providers of financial intermediation services worldwide. But what is the essence of nonbank financial intermediation? Does it have any inherent advantages, and how does it interact with that performed by banks? The authors provide a model-based survey of recent literature on nonbank intermediation, with an emphasis on how it competes, or cooperates, with traditional banks.
By Nicola Cetorelli, Gonzalo Cisternas, and Asani Sarkar
Why Does the U.S. Always Run a Trade Deficit?
One possible reason why the United States runs a trade deficit is that the imbalance reflects a macroeconomic phenomenon. Using national accounting, the author shows that deficits could be due to a persistent shortfall in domestic saving that requires funds from abroad to finance domestic investment spending. Therefore, reducing the trade imbalance would require both more exports relative to imports and a narrowing of the gap between saving and investment spending.
By Thomas Klitgaard
Photo: Split screen of Two women working, the first is a Housekeeper cleaning a hotel room. The second is thinking, laptop and typing businesswoman, bank consultant or working on research report, project or solution. Computer, administration analysis and professional person reading online account data.
The College Economy: Educational Differences in Labor Market Outcomes
It is intuitive that workers with higher levels of education tend to earn more than those with less. The authors find that it is also true that workers with more education are much more likely to be employed, and that this advantage has grown in recent years. They document profound differences in labor market outcomes by educational attainment and assert that fostering higher labor force participation of workers without a college degree is key to promoting maximum employment.
By Rajashri Chakrabarti, Thu Pham, Beckett Pierce, and Maxim Pinkovskiy
Photo: Back view of a student wearing an academic robe carrying a large bag on his back with the words "DEBT" written on it, a concept of students burdened by expensive education costs.
Student Loan Delinquencies Are Back, and Credit Scores Take a Tumble
Overall household debt rose by $167 billion over the first quarter of 2025, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. The delinquency rate for student loans surged from below 1 to nearly 8 percent, as the pause on reporting delinquent federal student loans ended. The authors focus on student loan delinquency, including which borrowers are past due and its effect on their access to credit.
By Andrew F. Haughwout, Donghoon Lee, Daniel Mangrum, Joelle Scally, and Wilbert van der Klaauw
Who Finances Real Sector Lenders?
The modern financial system is complex, with funding flowing not just from the financial sector to the real sector but within the financial sector through an intricate network of financial claims. While the authors’ previous work focused on understanding the end result of these flows, here they explore how accounting for interlinkages across the financial sector changes their perception of who finances credit to the real sector.
By Nina Boyarchenko, Hyuntae Choi, and Leonardo Elias
Gauging the Strength of China’s Economy in Uncertain Times
In this post, the authors provide an update on China’s recent economic performance and policy changes. At present, China’s “credit impulse”—the change in the flow of new aggregate credit to the economy relative to GDP—appears likely sufficient to allow it to muddle through with steady but not strong growth over the next year despite the intensifying trade conflict with the U.S.
By Jeffrey B. Dawson and Hunter L. Clark
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.

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Global Supply Chain Pressure Index
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Measuring the Natural Rate of Interest
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Multivariate Core Trend Inflation
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The New York Fed DSGE Model
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Yield Curve as a Leading Indicator
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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.
Economic Heterogeneity Indicators (EHIs)
The EHIs are broad-based economic indicators that measure macroeconomic outcomes experienced by different demographic, economic, and geographic groups on both a regional and national level.
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.
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Monthly surveys conducted by the New York Fed track the sentiment of executives at regional manufacturing and service-sector firms regarding business conditions.

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Empire State Manufacturing Survey
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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 deteriorated noticeably in the first quarter of 2025. The unemployment rate jumped to 5.8 percent—the highest reading since 2021—and the underemployment rate rose sharply to 41.2 percent.
Recent Publications
Information Spillovers Within Couples: Evidence from a Sequential Survey of Spouses
Many economic decisions are made jointly at the household level. However, little is known about information flow within couples, and whether spouses hold aligned expectations about the same outcomes. The authors conduct an online survey of 2,200 middle-aged married couples in the U.S., in which both spouses report their expectations about the same outcomes. They use these novel data to test the assumption of equality of expectations within couples and then quantify the extent of information spillovers to investigate the factors that facilitate or hinder information flow between partners.
Adeline Delavande, Gizem Koşar, and Basit Zafar, Staff Report 1154, June 2025
The Price of Processing: Information Frictions and Market Efficiency in DeFi
A central question in financial economics concerns price discovery, or how new information be-comes embedded in asset prices. The authors study this question within the context of hacks in decentralized finance (DeFi). They precisely time both when the hacks begin on the public blockchain record and when the news is later announced on social media, becoming common knowledge. Their central finding is that prices move significantly before the news becomes common knowledge.
Pablo D. Azar, Sergio Olivas, and Nish D. Sinha, Staff Report 1153, April 2025
Component-Based Dynamic Factor Nowcast Model
The authors propose a component-based dynamic factor model for nowcasting GDP growth, evaluating its performance against existing models. They demonstrate that, on average, the performance of the standard dynamic factor model can be improved by 15 percent and its density nowcast performance can be improved by 20 percent over a large historical sample.
Hannah O’Keeffe and Katerina Petrova, Staff Report 1152, April 2025
Uniform Inference with General Autoregressive Processes
Imposing short memory assumptions in macroeconomic and financial models is convenient, since it delivers standard econometric inference on the models’ parameters with conventional asymptotic distributions. However, such stationarity assumptions are often empirically unrealistic. The authors propose a unified, distribution-free framework for inference in autoregressive, predictive regression, and local projection models, when the regressor’s autoregressive root is in (-∞, ∞). They demonstrate how their procedure can be used to construct valid confidence intervals in standard epidemiological models.
Tassos Magdalinos and Katerina Petrova, Staff Report 1151, April 2025
How Do We Learn About the Long Run?
The authors provide novel empirical and theoretical insights into how professional forecasters form and revise long-run expectations. Using a novel and unique panel dataset of individual-level professional forecasts across multiple horizons, the authors show that long-horizon expectations display considerable heterogeneity across forecasters, evolve dynamically in response to short-run developments, and are shaped by multivariate considerations. Their findings challenge the conventional assumption of anchored or rational long-run expectations and motivate models in which information frictions are relevant at short- and long-run horizons.
Richard K. Crump, Stefano Eusepi, Emanuel Moench, and Bruce Preston, Staff Report 1150, April 2025
The Risk Sensitivity of Global Liquidity Flows: Heterogeneity, Evolution, and Drivers
The period after the global financial crisis (GFC) was characterized by a considerable risk migration within global liquidity flows, away from cross-border bank lending toward international bond issuance. The authors investigate the drivers of these global risk sensitivities and the determinants of the post-GFC risk migration. They also examine the shifting drivers of global liquidity across its main components (cross-border and international bonds), borrowing country groups (advanced and emerging market economies), and borrowing sectors (bank and non-bank).
Stefan Avdjiev, Leonardo Gambacorta, Linda S. Goldberg, and Stefano Schiaffi, Staff Report 1149, April 2025
Subjective Uncertainty and the Marginal Propensity to Consume
Earnings uncertainty is central to most heterogeneous-household models. Yet, there is surprisingly little evidence on how subjective uncertainty is related to consumption behavior. Using unique data from the New York Fed’s Survey of Consumer Expectations, the authors show that the marginal propensity to consume (MPC) is increasing and concave in individual specific earnings growth uncertainty.
Gizem Koşar and Davide Melcangi, Staff Report 1148, April 2025
Tradeoffs for the Poor, Divine Coincidence for the Rich
Monetary policymakers face a tradeoff between the variability of inflation and real activity. However, both the experience of recent decades and the heterogeneous agent New Keynesian (HANK) literature developed over the same period make it clear that such tradeoffs may be very different for different households. The authors use an estimated medium-scale HANK model to investigate how the tradeoff between stabilizing inflation and consumption volatility varies for households with different levels of wealth.
Marco Del Negro, Ibrahima Diagne, Keshav Dogra, Pranay Gundam, Donggyu Lee, and Brian Pacula, Staff Report 1147, April 2025
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