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Discussion Paper
Foreign Portfolio Investment When the United States was an Emerging Market
In this note, we analyze two surveys occurring in 1853 and 1869 and compare the patterns of foreign ownership then to foreign portfolio investment in the present-day United States.
Discussion Paper
Short-Term Funding Stresses and Asset Prices: Lessons from U.S. History
Recent stress episodes in U.S. short-term dollar funding markets have brought renewed attention to the functioning of these markets and how they interact with capital markets more generally. The history of U.S. money markets and stock and bond markets before the founding of the Federal Reserve offer a unique perspective on how the structure of money markets can contribute to broader asset price fluctuations.
Discussion Paper
Official Reserve Revaluations: The International Experience
With public debt at high levels, some governments have begun to explore financing additional expenditures without raising taxes while also not increasing public debt outstanding. One possibility is using proceeds from valuation gains on gold reserves, as has been floated in the U.S. and Belgium recently.
Working Paper
Intermediary Asset Pricing during the National Banking Era
Financial intermediary balance sheets matter for asset returns even when these intermediaries do not directly participate in the relevant asset markets. During the National Banking Era, liquidity conditions for the New York Clearinghouse (NYCH) banks forecast excess returns for stocks, bonds, and currencies. The NYCH banks had little to no direct participation in these markets; their main link to these markets was through securities financing. Liquidity conditions affect asset prices through the credit growth of the NYCH banks, which shapes marginal investors' discount rates. I use ...
Discussion Paper
Foreign Demand for U.S. Treasury Securities during the Pandemic
Foreign investors hold a sizable amount of U.S. Treasury securities—$7.5 trillion or about 35 percent of the total outstanding—so net purchases by foreign investors receive significant attention from a variety of sources, including academic researchers, finance professionals, and journalists. During the pandemic, foreign demand for U.S. Treasury securities has received scrutiny for a variety of reasons, including the contribution of foreign investors to the massive selloff in March 2020 (Duffie, 2020; Vissing-Jorgensen, forthcoming) and the ability of foreign investors to absorb ...
Discussion Paper
A Brief Illustrated History of the Federal Reserve’s Balance Sheet
The size of the Federal Reserve's balance expanded dramatically from 2008 to 2022 and has recently begun to adjust as the Fed moves toward a policy of "ample" reserves. While this expansion was unprecedented in its speed and came after a long period of stability, the Federal Reserve's balance sheet has risen and fallen and changed in composition over time. This note provides a graphical review of the evolution of the balance sheet from the Fed's founding in 1914 through 2025, with particular emphasis on how the balance sheet changed as the gold standard ended in the early 1970s, as the Fed ...