Search Results
Journal Article
Understanding the wash cycle
Money laundering has gone on since the first crime was committed for profit, but it has been explicitly illegal only since 1986. Interest in this topic soars whenever a major ?laundromat? is uncovered. This Economic Commentary describes the money laundering process, summarizes the evolving statutes, and describes the Federal Reserve?s role in assisting in their enforcement
Working Paper
The effect of pricing on demand and revenue in Federal Reserve ACH payment processing
Because the automated clearinghouse (ACH) has been found to have lower social costs than paper checks, the Federal Reserve has been promoting more widespread use of ACH by lowering ACH processing fees. In this paper we have obtained the first numerical estimates of ACH demand elasticities, a measure of the responsiveness of ACH demand to price changes. In order to determine how robust the estimates are, various methods were employed to estimate the demand elasticities. ; Our results show that the volume of ACH items processed by the Federal Reserve does respond to changes in per-item fees. We ...
Working Paper
Decomposing TFP growth in the presence of cost inefficiency, nonconstant returns to scale, and technological progress
A decomposition of observed total factor productivity (TFP) growth that examines changes in returns to scale, cost efficiency, and technology and that develops several decompositions using production and cost frontiers.
Journal Article
Productivity gains: how permanent?
This Economic Commentary confirms that productivity growth has been unusually robust over the last few years and explores reasonable assumptions about the likely future pattern of productivity growth. These assumptions can generate substantially different productivity growth paths. Government forecasts, which guide the major tax and benefit programs, have been increased in recent years yet remain cautious.
Working Paper
Scale economies, scope economies, and technical change in Federal Reserve payment processing
In the past decade, the U.S. economy has witnessed a tremendous surge in the usage of electronic payment processing services and an increased importance of the firms that provide these services. The payments industry has also undergone changes in cost structure with the introduction of new technology. Unfortunately, data on the private provision of payment processing services are not available. However, the Federal Reserve provides similar services and collects data on its own provision of payments processing, offering an opportunity to gain insights into the cost structure of payments ...
Journal Article
What you should know about identity theft
Identity theft?appropriating someone else?s identity for illicit gain?is the fastest-growing financial crime. It can cause considerable financial losses, and cleaning up a trashed credit history can be time consuming and frustrating. This Economic Commentary examines the identity theft phenomenon?how it works, how lawmakers, regulators, and financial institutions are combating it, and what consumers can do to protect themselves.
Working Paper
TFP growth, change in efficiency, and technological progress in the U. S. airline industry: 1970 to 1981
An overview of the airline industry's early adaptations to deregulation using a best-practice cost function approach; measures cost efficiency and changes in total factor productivity growth for airlines in the 1970s and early 1980s and discusses how these findings relate to individual airline performance.
Journal Article
Labor productivity growth across states
Labor productivity growth, a measure of output per unit of work, is closely tied to gains in wages and living standards, and it provides a direct measure of a country?s competitive position over time. The same holds true for states. Since the last business cycle peak in 2000, states boosted their average labor productivity growth to 2.3 percent. In Ohio, this growth came as a result of modest output growth accompanied by sharp employment losses. Although this has been a painful transition for the Fourth District, solid productivity gains have made the remaining firms and workers more ...
Journal Article
Consumer financial privacy and the Gramm-Leach-Bliley Act
By requiring financial institutions to put adequate controls in place to secure consumers? confidential data and by clearly spelling out what rights consumers and financial institutions have, the 1999 Gramm-Leach-Bliley Act is a positive step toward ensuring consumer financial privacy. If there are no market imperfections, then competition may be relied on to efficiently sort out the competing interests of consumers and financial institutions. Alternatively, if there are market imperfections in the form of externalities, the Coase theorem suggests that the act, by clearly assigning property ...
Journal Article
Making payments in cyberspace
An examination of the payment problems that will have to be overcome as the electronic marketplace evolves, including the issues of trust between buyer and seller, security of payment instruments, individual privacy versus law enforcement concerns, and the implications for monetary policy.