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Jel Classification:D31 

Journal Article
Do we know what we owe? Consumer debt as reported by borrowers and lenders

Household surveys are the source of some of the most widely studied data on consumer balance sheets, with the Survey of Consumer Finances (SCF) generally cited as the leading source of wealth data for the United States. At the same time, recent research questions survey respondents? propensity and ability to report debt characteristics accurately. This study compares household debt as reported by borrowers to the SCF with household debt as reported by lenders to Equifax using the new FRBNY Consumer Credit Panel (CCP). The borrower and lender debt distributions are compared by year, age of ...
Economic Policy Review , Issue 21-1 , Pages 19-44

Briefing
Cliff notes: the effects of the 2013 debt-ceiling crisis

We investigate the effects of the 2013 debt-ceiling crisis on the Treasury bill market and possible spillovers to the commercial paper market and money market funds. We also compare this experience with the prior debt-ceiling crisis in 2011. We find that the 2013 debt-ceiling crisis reduced the demand for Treasury bills that were scheduled to mature right after the debt-ceiling deadline, but not for longer-term Treasury bills. Accordingly, we see that a hump formed at the shorter end of the term structure of Treasury bill yields around the debt-ceiling deadline, with the term structure ...
Public Policy Brief

Report
Do we know what we owe? A comparison of borrower- and lender-reported consumer debt

Household surveys are the source of some of the most widely studied data on consumer balance sheets, with the Survey of Consumer Finances (SCF) generally cited as the leading source of wealth data for the United States. At the same time, recent research questions survey respondents? propensity and ability to report debt characteristics accurately. We compare household debt as reported by borrowers to the SCF with household debt as reported by lenders to Equifax using the new FRBNY Consumer Credit Panel (CCP). Moments of the borrower and lender debt distributions are compared by year, age of ...
Staff Reports , Paper 523

Report
Lights, camera,...income! Estimating poverty using national accounts, survey means, and lights

In this paper, we try to understand whether measures of GDP per capita taken from national accounts or measures of mean income or consumption derived from household surveys better proxy for true income per capita. We propose a data-driven method to assess the relative quality of GDP per capita versus survey means by comparing the evolution of each series to the evolution of satellite-recorded nighttime lights. Our main assumption, which is robust to a variety of specification checks, is that the measurement error in nighttime lights is unrelated to the measurement errors in either national ...
Staff Reports , Paper 669

Report
Educational assortative mating and household income inequality

We document the degree of educational assortative mating, how it evolves over time, and the extent to which it differs between countries. Our analysis focuses on the United States but also uses data from Denmark, Germany, the United Kingdom, and Norway. We find evidence of positive assortative mating at all levels of education in each country. However, the time trends vary by the level of education: Among college graduates, assortative mating has been declining over time, whereas individuals with a low level of education are increasingly sorting into internally homogeneous marriages. These ...
Staff Reports , Paper 682

Report
Modigliani Meets Minsky: Inequality, Debt, and Financial Fragility in America, 1950-2016

This paper studies the secular increase in U.S. household debt and its relation to growing income inequality and financial fragility. We exploit a new household-level data set that covers the joint distributions of debt, income, and wealth in the United States over the past seven decades. The data show that increased borrowing by middle-class families with low income growth played a central role in rising indebtedness. Debt-to-income ratios have risen most dramatically for households between the 50th and 90th percentiles of the income distribution. While their income growth was low, ...
Staff Reports , Paper 924

Report
Credit, Income and Inequality

Analyzing unique data on loan applications by individuals who are majority owners of small firms, we detail how a bank’s credit decisions affect their future income. We use the bank’s cutoff rule, which is based on the applicants’ credit scores, as the discontinuous locus providing exogenous variation in the decision to grant loans. We show that application acceptance increases recipients’ income five years later by more than 10 percent compared to denied applicants. This effect is mostly driven by the use of borrowed funds to undertake investments, and is stronger when individuals ...
Staff Reports , Paper 929

Working Paper
Cyclical Labor Income Risk

We investigate cyclicality of variance and skewness of household labor income risk using PSID data. There are five main findings. First, we find that head's labor income exhibits countercyclical variance and procyclical skewness. Second, the cyclicality of hourly wages is mutted, suggesting that head's labor income risk is mainly coming from the volatility of hours. Third, younger households face stronger cyclicality of income volatility than older ones, although the level of volatility is lower for the younger ones. Fourth, while a second earner helps lower the level of skewness, it does not ...
Opportunity and Inclusive Growth Institute Working Papers , Paper 22

Working Paper
Income and Wealth Inequality in America, 1949-2016

This paper introduces a new long-run dataset based on archival data from historical waves of the Survey of Consumer Finances. The household-level data allow us to study the joint distributions of household income and wealth since 1949. We expose the central importance of portfolio composition and asset prices for wealth dynamics in postwar America. Asset prices shift the wealth distribution because the composition and leverage of household portfolios differ systematically along the wealth distribution. Middle-class portfolios are dominated by housing, while rich households predominantly own ...
Opportunity and Inclusive Growth Institute Working Papers , Paper 9

Report
Intergenerational Redistribution in the Great Recession

We construct a stochastic overlapping-generations general equilibrium model in which households are subject to aggregate shocks that affect both wages and asset prices. We use a calibrated version of the model to quantify how the welfare costs of big recessions are distributed across different household age groups. The model predicts that younger cohorts fare better than older cohorts when the equilibrium decline in asset prices is large relative to the decline in wages. Asset price declines hurt the old, who rely on asset sales to finance consumption, but benefit the young, who purchase ...
Staff Report , Paper 498

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