Board of Governors of the Federal Reserve System

November 2014 Update of the FRB/US model

This FEDS Note is a companion to the most recent release of the FRB/US model of the U.S. economy on the Board's website.

DOI: https://doi.org/10.17016/2380-7172.0036

Optimal-Control Monetary Policy in the FRB/US Model

The question of how best to conduct monetary policy has been studied by economists for a long time. Over the past 25 years or so, attention has focused on systematic approaches to setting the short-term interest rate in a manner that effectively balances policymaker objectives.

DOI: https://doi.org/10.17016/2380-7172.0035

Introducing Actuarial Liabilities and Funding Status of Defined-Benefit Pensions in the U.S. Financial Accounts

Last year, in its September 2013 release, the Financial Accounts of the United States (formerly known as Flow of Funds accounts) changed the treatment of defined-benefit (DB) pensions from a cash accounting basis to an accrual accounting basis.

DOI: https://doi.org/10.17016/2380-7172.0034

Measuring Direct Investment in the Financial Accounts of the United States

This note explains recent changes in the treatment of direct investment in the Federal Reserve Board's Financial Accounts of the United States (formerly known as the Flow of Funds Accounts).

DOI: https://doi.org/10.17016/2380-7172.0033

Accounting for Mortgage Charge-offs in the Financial Accounts of the United States

The level of outstanding home mortgage debt in the United States has declined about $1.5 trillion, or 13 percent, since its peak six years ago. This large drop in mortgage debt has been the primary driver of the reduction in household liabilities often referred to as "household deleveraging" and frequently measured by statistics such as aggregate household debt relative to income.

DOI: https://doi.org/10.17016/2380-7172.0032

Student Loans and Homeownership Trends

The increases in student loan debt and delinquencies over the past few years have raised concerns about whether heavy student loan debt burdens are making it more difficult for young households to become homeowners.

DOI: https://doi.org/10.17016/2380-7172.0031

Residual Seasonality in Core Consumer Price Inflation

The past 10 years have typically seen a pattern in which consumer price inflation has tended to be higher in the first half of the year than in the second half.

DOI: https://doi.org/10.17016/2380-7172.0030

The Social Discount Rate in Developing Countries

The "social discount rate" is the interest rate used in cost-benefit analyses of infrastructure and other public projects.

DOI: https://doi.org/10.17016/2380-7172.0029

Updating the Labor Market Conditions Index

Starting Monday, October 6th, we will provide updated estimates of the labor market conditions index (LMCI) every month.

DOI: https://doi.org/10.17016/2380-7172.0028

Risk Transfer Across Economic Sectors Using Credit Default Swaps

Credit default swaps (CDS) play an important role in distributing risk in the global financial system.

DOI: https://doi.org/10.17016/2380-7172.0027

Financial Stability Monitoring

In a recently released New York Fed staff report, we present a forward-looking monitoring program to identify and track time-varying sources of systemic risk.

DOI: https://doi.org/10.17016/2380-7172.0026

Enhanced Financial Accounts

The Federal Reserve Board has begun an ambitious and long-term effort to upgrade the Financial Accounts of the United States to provide a significantly more detailed and timely picture of financial intermediation in the United States.

DOI: https://doi.org/10.17016/2380-7172.0025

The Recent Decline in Long-Term Unemployment

In this FEDS Note we take a deeper look at the sizeable decline in long-term unemployment seen over the first half of 2014.

DOI: https://doi.org/10.17016/2380-7172.0024

Repurchase Agreements in the Financial Accounts of the United States

The objectives of this note are to provide an overview of how Board staff compiles repo data for the Financial Accounts, to explain recent changes to those methods and how these changes affect our understanding of the role played by repo in the financial crisis, and to describe plans for further improvements to the repo series.

DOI: https://doi.org/10.17016/2380-7172.0023

Deleveraging: Is it over and what was it?

Anyone who has followed the commentary on consumer spending in recent years has heard a lot about household deleveraging.

DOI: https://doi.org/10.17016/2380-7172.0022

The effect of labor slack on wages: Evidence from state-level relationships

Over the past several years, increases in most broad measures of wages have been quite muted, which many would consider symptomatic of weak demand for labor.

DOI: https://doi.org/10.17016/2380-7172.0021

Using cross-state variation to assess the potential for additional improvement in measures of labor market conditions

While the national unemployment rate and the monthly change in payroll employment receive considerable attention among analysts seeking to assess the current state of the labor market, a broader range of labor market indicators are potentially also useful.

DOI: https://doi.org/10.17016/2380-7172.0020

Assessing the Change in Labor Market Conditions

The U.S. labor market is large and multifaceted. Often-cited indicators, such as the unemployment rate or payroll employment, measure a particular dimension of labor market activity, and it is not uncommon for different indicators to send conflicting signals about labor market conditions.

DOI: https://doi.org/10.17016/2380-7172.0019

Perspectives on the Recent Weakness in Investment

After having been a relatively bright spot early in the recovery, nonresidential private fixed investment, which in this note we refer to as business fixed investment (BFI), increased at an average annual rate of only about 4 percent in 2012 and 2013, an unusually slow pace during an expansion.

DOI: https://doi.org/10.17016/2380-7172.0018

Forecasting Stock Market Crashes is Hard--Especially Future Ones: Can Option Prices Help?

Stock market gyrations are notoriously hard to predict, and not for lack of effort by legions of investors, market commentators and academics.

DOI: https://doi.org/10.17016/2380-7172.0017

The Federal Debt-Limit Standoff of 2013 in the Financial Accounts of the United States

When there is a legislative standoff over raising the federal statutory debt limit, the Treasury Department can use its so-called "toolbox of extraordinary measures" to temporarily obtain additional room to borrow and finance the government's operations.

DOI: https://doi.org/10.17016/2380-7172.0016

The Role of Financial Imbalances in Assessing the State of the Economy

The buildup of financial imbalances may provide a signal regarding the sustainable rate of resource utilization in the economy.

DOI: https://doi.org/10.17016/2380-7172.0015

Why is Involuntary Part-Time Work Elevated?

Despite substantial improvement in the unemployment rate and several other labor market indicators, the number of Americans involuntarily working part time (also called "part-time for economic reasons") remains unusually high nearly five years into the recovery.

DOI: https://doi.org/10.17016/2380-7172.0014

Some Implications of Knightian Uncertainty for Finance and Regulation

With the recession of 2008, "uncertainty" became a buzzword. Since then, economists have largely shaped how policymakers, politicians, and the general public think about uncertainty, through, among other means, models that explicitly account for uncertainty.

DOI: https://doi.org/10.17016/2380-7172.0013

The FRB/US Model: A Tool for Macroeconomic Policy Analysis

Using big data in finance: Example of sentiment-extraction from news articles

There is much discussion and research in finance on using "big data" to understand market "sentiment."

DOI: https://doi.org/10.17016/2380-7172.0011

Estimating the Effect of Central Clearing on Credit Derivative Exposures

Central clearing of derivatives is a primary objective of the global financial reform effort emerging from the financial crisis.

DOI: https://doi.org/10.17016/2380-7172.0010

A Few Thoughts on the Recent Deceleration of Student Loan Debt

While the amount of student loan debt outstanding has continued to rise in recent quarters, its rate of growth has slowed recently.

DOI: https://doi.org/10.17016/2380-7172.0009

How Does Earnings Risk for Americans Change during Recessions?

Aggregate labor earnings fell more in the period from 2007 to 2009 than during any other post-war recession.

DOI: https://doi.org/10.17016/2380-7172.0008

Measuring Agency MBS Market Liquidity with Transaction Data

Agency mortgage backed securities are fixed income securities that entitle the owner to principal and interest payments on underlying residential mortgages that are guaranteed by government-sponsored enterprises or government agencies.

DOI: https://doi.org/10.17016/2380-7172.0007

The Rise in Equity Valuation Ratios

Recent discussions by some market participants have noted that a number of equity valuation ratios are elevated.

DOI: https://doi.org/10.17016/2380-7172.0006