This Economic Commentary studies whether statewide bans on affirmative action in admission to public universities cause students to move to a new state to attend college. Regression results using data from the decennial census and the American Community Survey provide little evidence that affirmative action bans result in migration across state lines to attend college. In addition to being of direct interest, these results provide a check on earlier research that treats different states roughly as separate higher education markets.
本《经济评论》研究了全州范围内禁止公立大学录取平权法案是否会导致学生搬到另一个州上大学。利用十年一次的人口普查和美国社区调查(American Community Survey)数据进行的回归结果显示，几乎没有证据表明平权法案禁令会导致跨州移民到美国上大学。除了具有直接意义外，这些结果还对早期将不同州大致视为独立高等教育市场的研究进行了检验。
{"title":"Do Affirmative Action Bans Cause Students to Move Across State Lines to Attend College?","authors":"Peter L. Hinrichs","doi":"10.26509/frbc-ec-202004","DOIUrl":"https://doi.org/10.26509/frbc-ec-202004","url":null,"abstract":"This Economic Commentary studies whether statewide bans on affirmative action in admission to public universities cause students to move to a new state to attend college. Regression results using data from the decennial census and the American Community Survey provide little evidence that affirmative action bans result in migration across state lines to attend college. In addition to being of direct interest, these results provide a check on earlier research that treats different states roughly as separate higher education markets.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125038760","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We analyze how median real incomes in the United States have changed since 1980 under a definition of the middle class that adjusts for changes in demographics. We find that failing to adjust for demographic shifts in the population relating to age, race, and education can indicate a more positive outlook than is truly the case. We also find that the real median incomes of today’s middle class are somewhat higher than they used to be, particularly for households headed by two adults. We find, as in prior research, that prices for housing, healthcare, and education have risen more than middle-class incomes, while prices for transportation, food, and recreation have risen less than middle-class incomes.
{"title":"Is the Middle Class Worse Off Than It Used to Be?","authors":"Emily Dohrman, Bruce C. Fallick","doi":"10.26509/frbc-ec-202003","DOIUrl":"https://doi.org/10.26509/frbc-ec-202003","url":null,"abstract":"We analyze how median real incomes in the United States have changed since 1980 under a definition of the middle class that adjusts for changes in demographics. We find that failing to adjust for demographic shifts in the population relating to age, race, and education can indicate a more positive outlook than is truly the case. We also find that the real median incomes of today’s middle class are somewhat higher than they used to be, particularly for households headed by two adults. We find, as in prior research, that prices for housing, healthcare, and education have risen more than middle-class incomes, while prices for transportation, food, and recreation have risen less than middle-class incomes.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126491223","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
From 1978 to 1981, Kuwait’s two stock markets, one the conservatively regulated “official” market and the other the unregulated Souk al-Manakh, exploded in size, growing to the point where the amount of capital actively traded exceeded that of every other country in the world except the United States and Japan. A year later, the system collapsed in an instant, causing huge real losses to the economy and financial disruption lasting nearly a decade. This Commentary examines the emergence of the Souk, the simple financial innovation that evolved to solve its rapidly increasing need for liquidity and credit, and the herculean efforts to solve the tangled problems resulting from the collapse. Two lessons of Kuwait’s crisis are that it is difficult to separate the banking and unregulated financial sectors and that regulators need detailed data on the transactions being conducted at all financial institutions to give them the understanding of the entire network they must have to maintain financial stability. If Kuwaiti officials had had transaction-by-transaction data on the trades being made in both the regulated and unregulated stock markets, then the Kuwaiti crisis and its aftermath might not have been so severe.
{"title":"The Souk al-Manakh Crash","authors":"Ben R. Craig","doi":"10.26509/frbc-ec-201920","DOIUrl":"https://doi.org/10.26509/frbc-ec-201920","url":null,"abstract":"From 1978 to 1981, Kuwait’s two stock markets, one the conservatively regulated “official” market and the other the unregulated Souk al-Manakh, exploded in size, growing to the point where the amount of capital actively traded exceeded that of every other country in the world except the United States and Japan. A year later, the system collapsed in an instant, causing huge real losses to the economy and financial disruption lasting nearly a decade. This Commentary examines the emergence of the Souk, the simple financial innovation that evolved to solve its rapidly increasing need for liquidity and credit, and the herculean efforts to solve the tangled problems resulting from the collapse. Two lessons of Kuwait’s crisis are that it is difficult to separate the banking and unregulated financial sectors and that regulators need detailed data on the transactions being conducted at all financial institutions to give them the understanding of the entire network they must have to maintain financial stability. If Kuwaiti officials had had transaction-by-transaction data on the trades being made in both the regulated and unregulated stock markets, then the Kuwaiti crisis and its aftermath might not have been so severe.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123404784","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Federal Reserve conducts stress tests of the largest bank holding companies to ensure that the banking system has sufficient capital to stay financially sound in the event of worsening economic conditions. Some groups have raised concerns that the stress tests will reduce lending to small businesses. This article describes recent research investigating the impact of the stress tests on small-business lending. It finds that the banks that are most affected by stress tests have reduced their small-business credit, but aggregate credit to small businesses has not fallen.
{"title":"Have Stress Tests Impacted Small-Business Lending?","authors":"Yuliya Demyanyk","doi":"10.26509/frbc-ec-201919","DOIUrl":"https://doi.org/10.26509/frbc-ec-201919","url":null,"abstract":"The Federal Reserve conducts stress tests of the largest bank holding companies to ensure that the banking system has sufficient capital to stay financially sound in the event of worsening economic conditions. Some groups have raised concerns that the stress tests will reduce lending to small businesses. This article describes recent research investigating the impact of the stress tests on small-business lending. It finds that the banks that are most affected by stress tests have reduced their small-business credit, but aggregate credit to small businesses has not fallen.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"112 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132151001","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Although the concept of the natural rate of employment, NAIRU, or “U star” is used to measure the amount of slack in the labor market, it is an unobservable quantity that must be estimated using data currently available. This Commentary investigates the degree to which our estimates of U star at various points in the current business cycle have changed as real-time data have been revised and as more data points have accumulated. I find that the availability of additional data has contributed to a significant change in our estimates of U star at earlier points in the business cycle, a result that suggests we might have been underestimating the level of labor market slack during some of the recent recovery period. In retrospect, our updated estimates of U star suggest labor markets were not as tight as we thought they were then.
{"title":"Challenges with Estimating U Star in Real Time","authors":"Murat Tasci","doi":"10.26509/frbc-ec-201918","DOIUrl":"https://doi.org/10.26509/frbc-ec-201918","url":null,"abstract":"Although the concept of the natural rate of employment, NAIRU, or “U star” is used to measure the amount of slack in the labor market, it is an unobservable quantity that must be estimated using data currently available. This Commentary investigates the degree to which our estimates of U star at various points in the current business cycle have changed as real-time data have been revised and as more data points have accumulated. I find that the availability of additional data has contributed to a significant change in our estimates of U star at earlier points in the business cycle, a result that suggests we might have been underestimating the level of labor market slack during some of the recent recovery period. In retrospect, our updated estimates of U star suggest labor markets were not as tight as we thought they were then.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114561257","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Moving to Opportunity (MTO) was a housing mobility program designed to investigate neighborhood effects, the influences of the social and physical environment on human development and well-being. Some of the results from MTO have been interpreted as evidence that neighborhood effects are not as strong as earlier evidence had indicated. This Commentary discusses new research suggesting that neighborhood effects are, on the contrary, as strong and policy relevant as suspected before the experiment. This Commentary also discusses why the interpretation of the MTO data is important: If neighborhood effects drive outcomes, then addressing racial inequality requires concerted efforts beyond ending racial discrimination.
{"title":"Racial Inequality, Neighborhood Effects, and Moving to Opportunity","authors":"Dionissi Aliprantis","doi":"10.26509/frbc-ec-201917","DOIUrl":"https://doi.org/10.26509/frbc-ec-201917","url":null,"abstract":"Moving to Opportunity (MTO) was a housing mobility program designed to investigate neighborhood effects, the influences of the social and physical environment on human development and well-being. Some of the results from MTO have been interpreted as evidence that neighborhood effects are not as strong as earlier evidence had indicated. This Commentary discusses new research suggesting that neighborhood effects are, on the contrary, as strong and policy relevant as suspected before the experiment. This Commentary also discusses why the interpretation of the MTO data is important: If neighborhood effects drive outcomes, then addressing racial inequality requires concerted efforts beyond ending racial discrimination.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125526767","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economic data are routinely revised after they are initially released. I examine the extent to which the real-time reliability of six monthly macroeconomic indicators important to policymakers has remained stable over time by studying the time-series properties of their short-term and long-term revisions. I show that the revisions to many monthly economic indicators display systematic behaviors that policymakers could build into their real-time assessments. I also find that some indicators’ revision series have varied substantially over time, suggesting that these indicators may now be less useful in real time than they once were. Lastly, I find that substantial revisions tend to occur indefinitely after the initial data release, a result which suggests a certain degree of caution is in order when using even thrice-revised monthly data in policymaking.
{"title":"Has the Real-Time Reliability of Monthly Indicators Changed over Time?","authors":"Mark Bognanni","doi":"10.26509/frbc-ec-201916","DOIUrl":"https://doi.org/10.26509/frbc-ec-201916","url":null,"abstract":"Economic data are routinely revised after they are initially released. I examine the extent to which the real-time reliability of six monthly macroeconomic indicators important to policymakers has remained stable over time by studying the time-series properties of their short-term and long-term revisions. I show that the revisions to many monthly economic indicators display systematic behaviors that policymakers could build into their real-time assessments. I also find that some indicators’ revision series have varied substantially over time, suggesting that these indicators may now be less useful in real time than they once were. Lastly, I find that substantial revisions tend to occur indefinitely after the initial data release, a result which suggests a certain degree of caution is in order when using even thrice-revised monthly data in policymaking.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-10-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129926893","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Although increased international trade is widely viewed as beneficial to the economies of the participating countries, the benefits are not distributed evenly across individuals within those countries, and indeed some individuals may bear a cost. We discuss two channels through which trade can affect individuals differently depending on their skill and income levels and assess the combined impact of those channels. We find that the effects of trade on the labor market and the effects of trade on prices go in opposite directions and are of similar magnitude.
{"title":"The Winners and Losers from Trade","authors":"Daniel R. Carroll, Sewon Hur","doi":"10.26509/frbc-ec-201915","DOIUrl":"https://doi.org/10.26509/frbc-ec-201915","url":null,"abstract":"Although increased international trade is widely viewed as beneficial to the economies of the participating countries, the benefits are not distributed evenly across individuals within those countries, and indeed some individuals may bear a cost. We discuss two channels through which trade can affect individuals differently depending on their skill and income levels and assess the combined impact of those channels. We find that the effects of trade on the labor market and the effects of trade on prices go in opposite directions and are of similar magnitude.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123349728","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A large fraction of banks’ revenue comes from noninterest income, which includes items such as overdraft fees and ATM charges. We investigate whether this source of income has increased since the financial crisis, given that banks’ interest income may have been impacted by the low interest rate environment. We find that total noninterest income has actually decreased. However, service charges, one of the subcomponents of noninterest income, have increased. The increase in service charges is masked in the data on total noninterest income because other types of noninterest income, specifically securitization fees and other types of noninterest income affected by the crisis, fell during the same period.
{"title":"Trends in the Noninterest Income of Banks","authors":"Joseph G. Haubrich, Tristan Young","doi":"10.26509/frbc-ec-201914","DOIUrl":"https://doi.org/10.26509/frbc-ec-201914","url":null,"abstract":"A large fraction of banks’ revenue comes from noninterest income, which includes items such as overdraft fees and ATM charges. We investigate whether this source of income has increased since the financial crisis, given that banks’ interest income may have been impacted by the low interest rate environment. We find that total noninterest income has actually decreased. However, service charges, one of the subcomponents of noninterest income, have increased. The increase in service charges is masked in the data on total noninterest income because other types of noninterest income, specifically securitization fees and other types of noninterest income affected by the crisis, fell during the same period.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-09-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127151683","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This Commentary builds on recent research separating the components of overall inflation into cyclical and acyclical categories, but it does so at a finer level of disaggregation than previous analyses to understand recent inflation developments in the two categories. The inflation rate among cyclically sensitive subcomponents, which comprise roughly 40 percent of overall core PCE inflation, has generally continued to firm in recent years in line with a strengthening labor market and has returned to near pre-Great Recession levels. By contrast, the inflation rate among the acyclical subcomponents remains subdued. A modest firming in acyclical core PCE inflation to a more normal level, combined with ongoing strength in the labor market, would be enough to return core PCE inflation to 2 percent within approximately one year.
{"title":"Cyclical versus Acyclical Inflation: A Deeper Dive","authors":"Saeed Zaman","doi":"10.26509/frbc-ec-201913","DOIUrl":"https://doi.org/10.26509/frbc-ec-201913","url":null,"abstract":"This Commentary builds on recent research separating the components of overall inflation into cyclical and acyclical categories, but it does so at a finer level of disaggregation than previous analyses to understand recent inflation developments in the two categories. The inflation rate among cyclically sensitive subcomponents, which comprise roughly 40 percent of overall core PCE inflation, has generally continued to firm in recent years in line with a strengthening labor market and has returned to near pre-Great Recession levels. By contrast, the inflation rate among the acyclical subcomponents remains subdued. A modest firming in acyclical core PCE inflation to a more normal level, combined with ongoing strength in the labor market, would be enough to return core PCE inflation to 2 percent within approximately one year.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116859476","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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