Search Results
Showing results 1 to 10 of approximately 21.
(refine search)
Discussion Paper
Just Released: Who's Borrowing Now? The Young and the Riskless!
According to today’s release of the New York Fed’s 2013:Q4 Household Debt and Credit Report, aggregate consumer debt increased by $241 billion in the fourth quarter, the largest quarter-to-quarter increase since 2007. More importantly, between 2012:Q4 and 2013:Q4, total household debt rose $180 billion, marking the first four-quarter increase in outstanding debt since 2008. As net household borrowing resumes, it is interesting to see who is driving these balance changes, and to compare some of today’s patterns with those of the boom period.
Briefing
How Couples Approach Portfolio Allocation
The classical theory of household portfolio allocation finds that the share of household wealth invested in risky assets is independent of the level of household wealth. However, this prediction is at odds with empirical observations. This Economic Brief presents findings that reconcile the two. A model in which a household's portfolio allocation reflects the preferences of both spouses, adjusted for the bargaining power of each spouse, predicts that the wealthier a household becomes, the greater the share of its wealth will be invested in risky assets.
Working Paper
Bank Size and Household Financial Sentiment: Surprising Evidence from the University of Michigan Surveys of Consumers
We analyze comparative advantages/disadvantages of small and large banks in improving household sentiment regarding financial conditions. We match sentiment data from the University Of Michigan Surveys Of Consumers with local banking market data from 2000 to 2014. Surprisingly, the evidence suggests that large rather than small banks have significant comparative advantages in boosting household sentiment. Findings are robust to instrumental variables and other econometric methods. Additional analyses are consistent with both scale economies and the superior safety of large banks as channels ...
Journal Article
The Rise and Fall of Pandemic Excess Wealth
U.S. households accumulated significantly more wealth following the pandemic onset than would have been expected without the pandemic shock. Overall excess household wealth—measured as households’ inflation-adjusted net worth beyond pre-pandemic projections—peaked in late 2021 at $13 trillion, then rapidly fell to zero in late 2022, where it broadly remained through the third quarter of 2023. This rise and fall can be attributed mainly to financial assets, particularly equity holdings. Similarly, real liquid asset holdings currently sit below pre-pandemic projections despite a ...
Journal Article
Kitchen Conversations: How Households Make Economic Choices
Economists have studied decision-making for centuries, but how do households, as opposed to individuals, make decisions? The future of personal finance may rest on the answers.
Working Paper
Inflation at the Household Level
We use scanner data to estimate inflation rates at the household level. Households' inflation rates have an annual interquartile range of 6.2 to 9.0 percentage points. Most of the heterogeneity comes not from variation in broadly defined consumption bundles but from variation in prices paid for the same types of goods. Lower-income households experience higher inflation, but most cross-sectional variation is uncorrelated with observables. Households' deviations from aggregate inflation exhibit only slightly negative serial correlation. Almost all variability in a household's inflation rate ...
Speech
A Different Kind of Recession
Remarks at the Institute of International Finance: Central Banking in the Age of COVID-19 Summit (delivered via videoconference).
Journal Article
The Geography of Subprime Credit
Improving the financial lives of the people living in neighborhoods with large concentrations of lowcredit-scored households1 requires an understanding of the socioeconomic and financial challenges of those places. In this study, we identify such neighborhoods and analyze their socioeconomic and financial attributes, focusing on Illinois, Indiana, Iowa, Michigan, and Wisconsin (the five states served by the Federal Reserve Bank of Chicago). We find geographic patterns in the locations of subprime-scored households, in particular that these households are more highly concentrated in urban ...
Journal Article
How Do Periods of Inflation, Recession Affect Real Earnings?
Households can lose spending power if they suffer job losses during recessions or when the cost of living rises at times of high inflation. One way to assess the historical roles these two factors have played in eroding economy-wide earnings is by breaking down the cumulative growth in inflation-adjusted household earnings into three components: nominal earnings growth, inflation, and employment growth. Analyzing the results suggests that periods of high inflation may undermine economy-wide real earnings growth more than mild recessions.
Speech
The U.S. economic outlook and the implications for monetary policy
Remarks at Bank Indonesia–Federal Reserve Bank of New York Joint International Seminar, Bali Indonesia.