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Journal Article
Alternatives to Libor in consumer mortgages
Many adjustable rate mortgages in the United States are indexed to Libor. While the accuracy of this rate has recently been called into question, another issue affecting U.S. borrowers has become evident since the onset of the financial crisis. Specifically, many U.S. consumers with Libor-based loans may have been hit with substantially higher payments when their loans reset during the financial crisis than if those loans had been tied to a Treasury rate. We investigate several alternative reference rates for consumer loans and estimate their payment effects on a large sample of Libor-linked ...
Journal Article
Wage inflation and worker uncertainty
Compares two possible explanations of why pay increases continue to be moderate in a vigorous labor market--workers' uncertainty about their jobs and human resource managers' wage-setting behavior--and looks at how each explanation matches the evidence on the timing of inflation and wage changes.
Working Paper
State growth empirics: the long-run determinants of state income growth
Real average U.S. per capita personal income growth over the last 65 years exceeded a remarkable 400 percent. Also notable over this period is that the stark income differences across states have narrowed considerably: In 1939 the highest income state?s per capita personal income was 4.5 times the lowest, but by 1976 this ratio had fallen to less than 2 times. Since 1976, the standard deviation of per capita incomes at the state level has actually risen, as some higher-income states have seen their income levels rise relative to the median of the states. A better understanding of the sources ...
Report
Identifying inflation's grease and sand effects in the labor market
Inflation has been accused of causing distortionary prices and wage fluctuations (sand) as well as lauded for facilitating adjustments to shocks when wages are rigid downwards (grease). This paper investigates whether these two effects can be distinguished from each other in a labor market by the following identification strategy: inflation-induced deviations among employer's mean wage-changes represent unintended intramarket distortions (sand), while inflation-induced, inter-occupational wage-changes reflect intended alignments with intermarket forces (grease). Using a unique 40-year panel ...
Journal Article
Another look at part-time employment
A study that disputes recent reports claiming that undesirable and low-paying part-time jobs are overtaking full-time work, explaining how these reports overlook expansion in the labor force, confuse establishment and household data, and disregard differences in worker characteristics that can obscure relative wages.
Working Paper
Is \\"Fintech\\" Good for Small Business Borrowers? Impacts on Firm Growth and Customer Satisfaction
?Fintech? is a rapidly expanding segment of the financial market that is receiving much attention from investors and increasing regulatory scrutiny. While the attention is rising, very little is known about the performance of these lending sources on the outcomes of small businesses that make use of them. The Federal Reserve?s 2015 Small Business Credit Survey has data on the experiences of business owners with this new funding source and can provide some useful insights into this expanding sector, if compositional differences among the businesses that get bank loans, those that get fintech ...
Working Paper
Macro- and microeconomic consequences of wage rigidity
An exploration of the micro- and macroeconomic theories, implications, and evidence of wage rigidity from the perspective of human resource managers and economic researchers, showing that human resource policies can subtly alter the rigidity of wages.
Discussion Paper
Does wage inflation cause price inflation?
Is there any evidence to support the assumption that increased wages cause inflation? This study updates and expands earlier research into this question and finds little support for the view that higher wages cause higher prices. On the contrary, more evidence is found for higher prices leading to wage growth.
Report
The effects of inflation on wage adjustments in firm-level data: grease or sand?
This paper studies the effects of inflation on wage changes made by firms in a unique thirty-seven-year panel of occupations and employers drawn from the Federal Reserve Bank of Cleveland Community Salary Survey (CSS). Our analysis first identifies two relative prices embedded in wage changes and, second, draws inferences about the costs and benefits of inflation from the adjustments in these relative prices. Typically, firms manage employer-wide wage adjustments (controlling for occupational wage changes) separately from their interoccupational wage changes (controlling for employer wage ...
Journal Article
Are service-sector jobs inferior?
An argument that the wage gap between the service-producing and goods-producing sectors has narrowed to the point that the service industries now offer wage opportunities very similar to those in manufacturing and construction.