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Concerns about widening inequality have increased attention on the topic of equality of opportunities and intergenerational mobility. We use data from the National Longitudinal Survey of Youth to analyse how educational and income mobility has evolved in the United States of America. We show that since the 1980s the probability of moving from the bottom to the top of the education and income distribution (upward mobility) has increased. On the other hand, for children whose parents graduated from college, downward educational and income mobility has decreased. High parental income enables parents to insure against intergenerational income falling, generating a correlation between parents’ and children’s income. We conclude that American society, by increasing the number of university places, has created opportunities for students from low-income families to achieve higher educational attainments, which have pushed them out of the immobility trap. However, society has also developed an elite, which is wealthy and well educated. For those born to this elite, their family’s status has a strong impact on their welfare and that of future generations. [ABSTRACT FROM AUTHOR]

This paper tests the existence of capital-skill complementarity in the manufacturing sector using quasi-experimental increases in the relative price of low-skill labor induced by the US shale boom. I find that in response to the shale boom, local manufacturing firms decreased their relative usage of low-skill labor while increasing their capital expenditures. These endogenous changes in the input mix allowed manufacturers to maintain the value added despite the increase in the price of low-skill labor, avoiding the potential short-term crowding-out effects of the natural resource boom. Combined with the findings of previous work, my results indicate that the degree of skill substitutable with capital in manufacturing has increased over the last several decades. [ABSTRACT FROM AUTHOR]

The U.S. banking industry is well suited to assess the common ownership hypothesis (COH), because thousands of private banks without common ownership (CO) compete with hundreds of public banks with high and increasing levels of CO. This paper assesses the COH in the banking industry using more comprehensive ownership data than previous studies. In simple comparisons of raw deposit rate averages we document that (i) private banks do offer substantially more attractive deposit rates than public banks, but (ii) the deposit rates of public banks are similar in markets without CO where a single public bank competes only with private rivals, and in markets with CO where multiple public banks compete with each other. Panel regressions of deposit rates on the profit weights implied by the COH are generally consistent with the COH if only quarter FEs (without other controls) are included but not if bank-quarter FEs are included. Estimates with bank-quarter FEs are "precise zeros" with 95% CIs suggesting that the threefold rise in CO among public banks between 2005 and 2022 moved their deposit rates by less than a quarter of a basis point in either direction. To assess the COH along non-price dimensions we also estimate the effect of CO on deposit quantities, and find that the estimates are also not consistent with the COH. [ABSTRACT FROM AUTHOR]

Out of four major structural changes affecting the US economy - namely a rising share of skilled workers, skill-biased technological change, decreasing progressiveness of taxation and productivity slowdown - we show that the decline in productivity growth not only is the main driver of the widening wealth disparities observed in the United States of America over the past few decades, but is also the only mechanism that can explain inequalities both within and between skill groups. [ABSTRACT FROM AUTHOR]

A significant share of commercial real estate (CRE) investment properties--about half by our estimates--are purchased without a mortgage. Using comprehensive microdata on transactions in the US CRE market, we analyze which types of properties are purchased without a mortgage, highlighting the important role of renovation or redevelopment options. We show that mortgage-financed properties are less likely to be subsequently redeveloped, and that owners anticipate these redevelopment frictions and avoid mortgage financing for properties with greater redevelopment options. These effects were even stronger during the COVID-19 pandemic, when uncertainty increased redevelopment option values. [ABSTRACT FROM AUTHOR]

Copyright of Working Papers Series (Federal Reserve Bank of Dallas) is the property of Federal Reserve Bank of Dallas and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Rising interest rates have prompted concerns about losses on bank assets, especially following the failure of Silicon Valley Bank (SVB) in March 2023. In this working paper, we examine whether US credit unions could be subject to similar losses as banks and analyze how their regulatory capital would be affected. We estimate that after realizing losses from assets that have decreased in value and not yet been sold the overall net worth of the credit union industry would have fallen by 40 percent in 2023:Q1. Unrealized losses were most severe at the largest credit unions. Nonetheless, the bulk of deposits at credit unions were insured, suggesting limited risk of an SVB-style run. In addition, credit union deposit rates are relatively insensitive to market interest rates, providing credit unions with a hedge against a rising rate environment. Overall, credit unions' balance sheet positions seemed to be more resilient to unrealized interest rate risk than banks'. [ABSTRACT FROM AUTHOR]

We document a sizable effect of oil price fluctuations on US banking variables by estimating an SVAR with sign restrictions as in Baumeister and Hamilton (2019). We find that oil market shocks that lead to a contraction in world economic activity unambiguously lower the amount of bank credit to the US economy, tend to decrease US banks' net worth, and tend to increase the US credit spread. The effects can be strong and long-lasting, or more modest and short-lived, depending on the source of the oil price fluctuations. The effects are stronger for smaller and lower leveraged banks. [ABSTRACT FROM AUTHOR]

Mitigating climate change is critically linked to reducing an economy's reliance on fossil energy. This paper examines U.S. energy dependence, measured by its factor share, using a neoclassical framework systematically. We explore substitution as a simple, explicit mechanism for climate change mitigation and understanding energy-saving technical change. With time-varying capital equipment-energy substitutability, changes in observed factor quantities alone can account for most of the variations in the income share of energy over 1963-2019. Our analysis suggests that advancing capital equipment access and quality and integrating the dynamic substitutability between energy and equipment into the design of climate policies can help economies achieve environmental goals. [ABSTRACT FROM AUTHOR]

This paper examines the predictive relationship between the distribution of realized inflation in the US and measures of inflation expectations from households, firms, financial markets, and professional forecasters. To allow for nonlinearities in the predictive relationship we use quantile regression methods. We find that the ability of households to predict future inflation, relative to that of professionals, firms, and the market, increases with inflation. While professional forecasters are more accurate in the middle of the inflation density, households' expectations are more useful in the upper tail. The predictive ability of measures of inflation expectations is greatest when combined. We show that it is helpful to let the combination weights on different agents' expectations of inflation vary by quantile when assessing inflationary pressures probabilistically. [ABSTRACT FROM AUTHOR]

We use microdata on the phases of commercial construction projects to document three facts regarding time-to-plan lags: (1) plan times are long—about 1.5 years—and highly variable, (2) roughly 40 percent of projects are abandoned in planning, and (3) property price appreciation reduces the likelihood of abandonment. We construct a model with endogenous planning starts and abandonment that matches these facts. The model has the testable implication that supply is more elastic when there are more “shovel ready” projects available to advance to construction. We use local projections to validate that this prediction holds in the cross-section for US cities. [ABSTRACT FROM AUTHOR]

In theory, the zero lower bound on nominal interest rates can generate substantial downward pressure on longer-term inflation expectations. We use data on interest rate options and inflation compensation to estimate the degree to which the probability that the zero lower bound binds in the future has weighed on inflation expectations in the United States. Over the 2008-2019 period, we estimate that the zero lower bound imparted only a small drag on longer-term inflation expectations of around 10 basis points. We argue that the Federal Reserve's use of forward guidance and largescale asset purchases largely offset the potential disinflationary effects of the zero lower bound, even prior to formally adopting an average inflation targeting framework. [ABSTRACT FROM AUTHOR]

As of 2022, the share of U.S. income accruing to labor is at its lowest level since the Great Depression. Updating previous studies with more recent observations, I document the continuing decline of the labor share for the United States, other countries, and various industries. I discuss how changes in technology and product, labor, and capital markets affect the trend of the labor share. I also examine its relationship with other macroeconomic trends, such as rising markups, higher concentration of economic activity, and globalization. I conclude by offering some perspectives on the economic and policy implications of the labor share decline. [ABSTRACT FROM AUTHOR]

Copyright of Working Papers Series (Federal Reserve Bank of Dallas) is the property of Federal Reserve Bank of Dallas and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We examine shifts in the U.S. marriage market, assessing how online dating, demographic changes, and evolving societal norms influence mate choice and broader sorting trends. Using a targeted search model, we analyze mate selection based on factors such as education, age, race, income, and skill. Intriguingly, despite the rise of online dating, preferences, mate choice, and overall sorting patterns showed negligible change from 2008 to 2021. However, a longer historical view from 1960 to 2020 reveals a trend toward preferences for similarity, particularly concerning income, education, and skills. Our findings refute two out of three potential explanations - reduced search costs and growing spatial segregation - as potential causes of these long-term shifts. In particular, we conclude that people's capacity to process and evaluate information hasn't improved despite technological advancements. Among the remaining demographic factors, we identify enhanced workforce participation and college attainment among women as the primary drivers of the U.S. marriage market transformation. Furthermore, we find that the corresponding changes in mate preferences and increased assortativeness by skill and education over this timeframe account for about half of the increased income inequality among households. [ABSTRACT FROM AUTHOR]

Personal loans used for a variety of purposes, such as debt consolidation, medical bills, vacations, or the payment of a large ticket item, reached $356 billion or about 10 percent of nonrevolving consumer credit at the end of 2022. Although depository institutions such as banks, thrifts, and credit unions dominate the personal loan market, finance companies, institutions that typically lend to nonprime consumers, hold nearly a fourth of these loans. This paper provides an overview of this nascent but relatively understudied sector of the United States credit market. [ABSTRACT FROM AUTHOR]

This paper analyses persistence and change in the regional league table of entrepreneurship performance in the United States in comparison with England and Wales and West Germany. It examines whether regional rankings in start-up and self-employment rates in the United States are as sticky over time as in these European countries over approximately century, half-century and 30-year periods, or whether the United States is different. It identifies the types of regions that improve markedly ("leapfroggers") or decline sharply ("plungers") in their league table positions and the reasons for these changes and compares the countries on these issues. The paper draws out policy implications on regional levelling-up of entrepreneurship activity. It also sets out an agenda for further research. [ABSTRACT FROM AUTHOR]

Drought has become more intense and frequent in many areas of the United States in recent years. Despite growing concerns about drought’s effects on the agricultural sector, few studies have quantified its effects on the cattle industry. In this paper, we estimate the effects of drought on cattle herd management, hay production, hay prices, and farm income in the United States from 2000 to 2022. We find that drought reduces hay production and leads to higher hay prices. We also find that drought contributes to herd liquidation: as drought intensity increases, average herd size declines. These declines in average herd size lead revenues to temporarily increase, perhaps due to farmers selling larger quantities of market and breeding stock. Finally, we find that drought is correlated with lower farm incomes. Overall, our results suggest drought has a temporary positive effect on rancher revenues, but a negative effect on earnings. [ABSTRACT FROM AUTHOR]

This paper studies the impacts of state appropriations on staffing and salaries at public higher education institutions in the United States using employment and revenue data from the Integrated Postsecondary Education Data System, along with an instrumental variables strategy borrowed from Deming and Walters (2018) and Chakrabarti, Gorton, and Lovenheim (2020). The instrument sidesteps the potential endogeneity of state appropriations for a given institution in a given year by interacting an institution's historical reliance on state appropriations with total state appropriations for all higher education institutions in a given year. The results suggest that higher state appropriations are associated with an increase in tenure-track assistant professors at four-year institutions. They are also associated with an increase in part-time instructional staff at both four-year and two-year institutions. However, they are not associated with a change in the number of tenured faculty. Appropriations are also positively related to salaries for a variety of employee groups, although notably not for instructional staff who are instructors, lecturers, or without an academic rank. Overall, the results show that public higher education institutions use state appropriations in a variety of ways, but I do not find evidence that they replace contingent faculty with tenured or tenure-track faculty when appropriations rise. [ABSTRACT FROM AUTHOR]

This paper provides an overview of the literature examining how the introduction of a CBDC would affect the banking sector, financial stability, and the implementation and transmission of monetary policy in a developed economy such as the United States. A CBDC has the potential to improve welfare by reducing financial frictions in deposit markets, by boosting financial inclusion, and by improving the transmission of monetary policy. However, a CBDC also entails considerable risks, including the possibility of bank disintermediation and associated contraction in bank credit, as well as potential adverse effects on financial stability. A CBDC also raise important questions regarding monetary policy implementation and the footprint of central banks in the financial system. Ultimately, the effects of a CBDC depend critically on its design features, particularly remuneration. [ABSTRACT FROM AUTHOR]

We study the reaction of voters to shifts in local economic conditions. Using the departure from the gold standard of US trading partners in 1931 and the US in 1933, we exploit heterogeneity in export destinations, creating local differences in expenditure-switching in US counties by isolating the aggregate effects of the monetary shocks using time fixed effects. We find significant changes in local voting behavior in response to both shocks, one originating abroad, and another domestically. The response to both shocks have similar magnitude. We argue that voters punished and rewarded incumbents regardless of the shocks' origin, implying strong feedback from economic conditions to electoral outcomes. [ABSTRACT FROM AUTHOR]

The article provides information on data sources and data manipulation used for the construction of hours worked and wages matrices. It discusses the scope of household survey on employment, unemployment, labor force participation and individual characteristics covered in the European Union (EU) Labour Force Survey and EU Structure of Earnings Survey, for EU countries and the United Kingdom (UK) and the Canadian Labour Force Survey and the Current Population Survey for Canada and the U.S.

This Report on the U.S. occupational safety and health response to the pandemic was prepared as part of the ILO World Economic and Social Outlook (WESO) project that included a review of the protections provided to critical workers on the frontline of the pandemic in multiple countries. The Report provides an overview of U.S. occupational safety and health and related laws; traces the effects of the pandemic on workers in the U.S.; reviews the federal agencies' responses to the risk of COVID-19 within workplaces; explores the variability among state responses to the occupational health threat; provides a summary of COVID-related workplace litigation brought by individuals and unions to expand workplace protections; and briefly outlines the social and economic supports provided to workers in the U.S. before and then during the pandemic. The Report concludes with an analysis of the U.S. response to the coronavirus public health crisis within workplaces. [ABSTRACT FROM AUTHOR]

Business use of office paper has declined in the past decade and recycling rates have risen, yet office waste paper remains a major sustainability issue for businesses. The EPA estimates that 90 percent of all office waste consists of paper. Commercial sources generated 35 to 45 percent of the 254 million tons of municipal solid waste produced in the US in 2007, nearly one-third of which consisted of paper or paperboard. Even as recycling increases, millions of tons of recyclable office paper products continue to get landfilled each year. [ABSTRACT FROM PUBLISHER]

Although business use of office paper has been on the decline since 1999, companies still use large amounts of it. Corporate sustainability initiatives often focus on recycling office waste paper. However, there are also significant sustainability issues concerning the office paper that companies acquire. [ABSTRACT FROM PUBLISHER]

The article focuses on the latest economic trends and indicators, providing a comprehensive overview of various economic statistics for the U.S., Eurozone, and South Africa. It highlights key developments such as the Federal Reserve's unexpected 50 basis point rate cut amid rising inflation and unemployment rates in the U.S., as well as moderating growth and inflation trends in the Eurozone.

Economists have studied the potential effects of shifts in the age distribution on the unemployment rate for more than 50 years. Most of this analysis uses a "shift-share" method, which assumes that the demographic structure has no indirect effects on age-specific unemployment rates. This paper uses state-level data to revisit the inuence of the age distribution on unemployment in the United States. We examine demographic effects across the entire age distribution rather than just the youth share of the population|the focus of most previous work|and extend the date range of analysis beyond that which was available for previous research. We find that shifts in the age distribution move the unemployment rate in the direction that a mechanical shift-share model would predict. But these effects are larger than the mechanical model would generate, indicating the presence of amplifying indirect effects of the age distribution on unemployment. [ABSTRACT FROM AUTHOR]

This paper quantifies the relationship between local opioid prescription rates and labor market outcomes in the United States between 2006 and 2016. To understand this relationship at the national level, we assemble a data set that allows us both to include rural areas and to estimate the relationship at a disaggregated level. We control for geographic variation in both short-term and long-term economic conditions. In our preferred specification, a 10 percent higher local prescription rate is associated with a lower prime-age labor force participation rate of 0.53 percentage points for men and 0.10 percentage points for women. We focus on measuring the impact of opioid prescriptions on labor markets, so we evaluate the robustness of our estimates to an alternative causal path, unobserved selection, and an instrumental variable from the literature. [ABSTRACT FROM AUTHOR]

Cryptocurrency owners without sufficient financial literacy and risk tolerance may be financially vulnerable, as the cryptocurrency market is highly volatile and lacks consumer protections. Our study divides cryptocurrency owners into three groups based on their purpose for holding cryptocurrencies-for investment only (investors), for transactions only (transactors), and for a mix of investment and transactions (mix users)-and examines how each group correlates with financial literacy and risk tolerance compared to consumers who do not own cryptocurrencies (nonowners). Using the 2022 Survey of Household Economics and Decisionmaking, we find that investors and mix users are significantly or moderately more financially literate and risk tolerant than nonowners, but transactors are less financially literate and slightly more risk tolerant than nonowners. We also find that the three groups of cryptocurrency owners vary by demographic and financial characteristics. Our findings highlight that transactors could be particularly financially vulnerable in the absence of consumer protections in the cryptocurrency market. [ABSTRACT FROM AUTHOR]

In the US, income and expenditure-side estimates of GDP (GDPI and GDPE) measure "true" GDP with error and are available at a quarterly frequency. Methods exist for using these proxies to produce reconciled quarterly estimates of true GDP. In this paper, we extend these methods to provide reconciled historical true GDP estimates at a monthly frequency. We do this using a Bayesian mixed frequency vector autoregression (MF-VAR) involving GDPE, GDPI, unobserved true GDP, and monthly indicators of short-term economic activity. Our MF-VAR imposes restrictions that reect a measurement-error perspective (that is, the two GDP proxies are assumed to equal true GDP plus measurement error). Without further restrictions, our model is unidentified. We consider a range of restrictions that allow for point and set identification of true GDP and show that they lead to informative monthly GDP estimates. We illustrate how these new monthly data contribute to our historical understanding of business cycles and we provide a real-time application nowcasting monthly GDP over the pandemic recession. [ABSTRACT FROM AUTHOR]

Copyright of OECD Statistics Working Papers is the property of Organisation for Economic Cooperation & Development and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article focuses on the constitutional powers of Congress and the President regarding foreign trade agreements, examining the roles each branch plays in the negotiation and approval processes. It discusses the evolving landscape of trade agreements, particularly the emergence of hybrid agreements that blend congressional and executive authority, raising legal questions about their constitutionality and the implications for the balance of power in U.S. trade policy.

The article focuses on the development and strategic implications of hypersonic weapons by the U.S. as part of its conventional prompt global strike program. It highlights the distinction between hypersonic glide vehicles and hypersonic cruise missiles, emphasizing the increasing interest and funding from both the Pentagon and Congress due to advancements in hypersonic technology by adversaries like Russia and China.

The article focuses on the U.S. President Joe Biden Administration's executive actions affecting federal student loan programs, highlighting the modifications made to address the significant student debt crisis in the U.S. It outlines the various actions taken from Fiscal year 2021 to Fiscal Year 2023, their financial implications, and the contrasting views on their effectiveness and costs to the federal government.

The article provides information on the U.S. Navy's Virginia-class (SSN-774) nuclear-powered attack submarine program and AUKUS submarine (Pillar 1) project, as well as policy considerations for Congress. The budget proposed by the Navy for fiscal year 2025 seeks to procure one SSN-774 that would become the 41st boat in the class, with an estimated cost of 5,759.5 million dollars. Pillar 1 involves the deployment, selling and development of SSN by Australia, the United kingdom and the U.S.

The article provides information on the U.S. Navy's Constellation-class (FFG-62) frigate program and related considerations for Congress. The program aims to procure at least 20 FFG-62 frigates, including the six ships that have been acquired through fiscal year (FY) 2024. The budget proposed by the Navy for FY2025 requests 1,170.4 million dollars to procure the seventh ship in the program. Potential oversight issues to be considered by Congress include the risk of cost growth in the program.

The article provides information on the U.S. Navy's Arleigh Burke (DDG-51) and Zumwalt (DDG-1000) destroyer programs and related policy considerations for Congress. The Navy has procured 94 DDG-51 ships through fiscal year (FY) 2024. The budget proposed by the Navy for FY2025 seeks to procure two more DDG-51 costing about 2.5 billion dollars each. The Navy procured three DDG-1000 destroyers in FY2007 to FY2009 but plans no further procurement of the ships.

The article explores the potential use of coastal blue carbon ecosystems as a carbon dioxide removal (CDR) approach and related considerations for the U.S. Congress. It describes the nature of coastal blue carbon ecosystems and their CDR capacity, as well as the importance of improving the mapping of such ecosystems to determine their carbon sequestriation and carbon storage ability and durability. It discusses several legislative issues to be considered by Congress related to such ecosystems.

The Navy’s Columbia (SSBN-826) class ballistic missile submarine (SSBN) program is a program to design and build a class of 12 new SSBNs to replace the Navy’s current force of 14 aging Ohio-class SSBNs. Since 2013, the Navy has consistently identified the Columbia-class program as the Navy’s top priority program. The Navy procured the first Columbia-class boat in FY2021; the boat was funded with three-year incremental funding in FY2021-FY2023. The Navy procured the second Columbia-class boat in FY2024; the boat is being funded with two-year incremental funding (also called split funding) in FY2024-FY2025. The Navy wants to procure the remaining 10 boats in the program—boats 3 through 12—at a rate of one per year in FY2026- FY2035. The Navy’s FY2025 budget submission estimates the total procurement cost of the first boat at $15,179.1 million (i.e., about $15.2 billion) and the procurement cost of the second Columbia-class boat at $9,283.1 million (i.e., about $9.3 billion). The first boat’s procurement cost is much higher than that of subsequent boats in the class because the first boat includes most of the detail design/nonrecurring engineering (DD/NRE) costs for the class. (It is a long-standing Navy budgetary practice to incorporate the DD/NRE costs for a new class of ship into the total procurement cost of the first ship in the class.) The first boat’s estimated procurement cost includes $6,557.6 million for plans, meaning (essentially) the DD/NRE costs for the class. Excluding costs for plans, the estimated hands-on construction cost of the first ship is $8,621.5 million (i.e., about $8.6 billion). The Navy’s proposed FY2025 budget requests $3,341.2 million (i.e., about $3.3 billion) in procurement funding to complete the procurement cost of the second Columbia-class boat and $6,215.9 million (i.e., about $6.2 billion) in advance procurement (AP) funding for Columbia class boats to be procured in FY2026 and subsequent years. Issues for Congress for the Columbia-class program include the following: • The impact of an estimated 12- to 16-month delay in the delivery of the first Columbia-class boat on the Navy’s plans for replacing Ohio-class SSBNs on a timely basis; • industrial-base challenges of building both Columbia-class boats and Virginia-class attack submarines (SSNs) at the same time; • the risk of cost growth in the Columbia-class program; and • the potential impact of the Columbia-class program on funding that will be available for other Navy programs, including other shipbuilding programs. [ABSTRACT FROM AUTHOR]

The article explains the multiyear procurement (MYP) and block buy contracting (BBC) mechanisms that the U.S. Congress allows the Department of Defense to use for a limited number of defense acquisition programs, as well as related considerations for Congress. It describes similarities and differences between MYP and BBC, as well as the funding approaches of each contracting mechanism. It discusses issues to be faced by Congress, including the frequency of using MYP or BBC.

The article provides a detailed overview of the recent developments in the United States' legal landscape, particularly focusing on the high-profile trial involving former President Donald Trump. It outlines the closing arguments presented by both the defense and prosecution in the New York hush money and election interference case, highlighting key points and reactions from the judge.

This paper provides a brief history of the U.S. financial regulatory perimeter, a legal cordon comprised of "positive" and "negative" restrictions on the conduct of banking organizations. Today's regulatory perimeter faces a wide range of challenges, from disaggregation, to new commercial entrants, to new varieties of charters (and new uses of legacy charters). We situate these challenges in the longer history of American banking, identifying a pattern in debates about the nature, shape, and position of the perimeter: outside-in pressure, inside-out pressure, and reform and expansion. We also observe a shift in this pattern, beginning roughly three decades ago, which gradually made the perimeter broader, more complex, and arguably more permeable. We show this trend graphically in an animation accompanying this paper. [ABSTRACT FROM AUTHOR]

We study the dynamic link between economic news coverage and the macroeconomy. We construct two measures of media coverage of bad and good unemployment figures based on three major US newspapers. Using nonlinear time series techniques, we document three facts: (i) there is no significant negativity bias in economic news coverage. The asymmetric responsiveness of newspapers' coverage to positive and negative unemployment shocks is entirely explained by the effects of these shocks on unemployment itself; (ii) consumption reacts to bad news, but not to good news; (iii) bad news is more informative to the agents and affects their expectations more than good news. [ABSTRACT FROM AUTHOR]

The $350 billion contraction in the asset-backed commercial paper (ABCP) market in the last five months of 2007 played a central role in transforming concerns about the credit quality of mortgage-related assets into a global financial crisis. This paper attempts to better understand why the substantial contraction in ABCP occurred by measuring and analyzing runs on ABCP programs over the period from August 2007 through December 2007. While it has been suggested that commercial paper programs, like commercial banks, may be prone to runs, we are the first to conduct a comprehensive empirical analysis of runs in the ABCP market using a rich and novel issue-level data set for all ABCP programs in the U.S. market. A program is defined as being run when it does not issue new paper during a week despite having a substantial share of its outstandings scheduled to mature, and then continuing in a run until it issues. We find evidence of extensive runs: more than 100 programs (one-third of all ABCP programs) were in a run within weeks of the onset of the turmoil and the odds of subsequently leaving the run state were very low. We interpret this finding as an indication that the ABCP market was subject to a bank-like "panic." We also find that while runs were linked to credit and liquidity exposures of individual programs, runs were also related importantly to non-program specific variables in the first several weeks of the turmoil, indicating that runs were relatively indiscriminate during the early part of the panic. Thus the ABCP market may be inherently unstable and a source of systemic risk. [ABSTRACT FROM AUTHOR]

A country report for the U.S. is presented from publisher Country Watch Inc., with topics including government strategy, economic growth, and national security.