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Tag Archives: Crisis

Understanding the Racial and Income Gap in Covid-19: Health Insurance, Comorbidities, and Medical Facilities

Ruchi Avtar, Rajashri Chakrabarti, and Maxim Pinkovskiy Our previous work documents that low-income and majority-minority areas were considerably more affected by COVID-19, as captured by markedly higher case and death rates. In a four-part series starting with this post, we seek to understand the reasons behind these income and racial disparities. Do disparities in health status translate into disparities in COVID-19 intensity? Does the health system play a role through...

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The Regional Economy during the Pandemic

Jaison R. Abel, Jason Bram, Richard Deitz, and Jonathan Hastings The New York-Northern New Jersey region experienced an unprecedented downturn earlier this year, one more severe than that of the nation, and the region is still struggling to make up the ground that was lost. That is the key takeaway at an economic press briefing held today by the New York Fed examining economic conditions during the pandemic in the Federal Reserve’s Second District. Despite the substantial recovery...

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The Costs of Corporate Debt Overhang Following the COVID-19 Outbreak

Kristian S. Blickle and João A. C. Santos Leading up to the COVID-19 outbreak, there were growing concerns about corporate sector indebtedness. High levels of borrowing may give rise to a “debt overhang” problem, particularly during downturns, whereby firms forego good investment opportunities because of an inability to raise additional funding. In this post, we show that firms with high levels of borrowing at the onset of the Great Recession underperformed in the following years,...

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The Fed Funds Market during the 2007-09 Financial Crisis

Adam Copeland The U.S. federal funds market played a central role in the financial system during the 2007-09 crisis, because it was the market which provided banks with immediate liquidity, even late in the day. Interpreting changes in fed funds rates is notoriously difficult, however, as many of the economic drivers behind the rates are simultaneously changing. In this post, I highlight results from a working paper which untangles the impact of these economic drivers and measures their...

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Bank Capital, Loan Liquidity, and Credit Standards since the Global Financial Crisis

Sarah Ngo Hamerling, Donald P. Morgan, and John Sporn Did the 2007-09 financial crisis or the regulatory reforms that followed alter how banks change their underwriting standards over the course of the business cycle? We provide some simple, “narrative” evidence on that question by studying the reasons banks cite when they report a change in commercial credit standards in the Federal Reserve’s Senior Loan Officer Opinion Survey. We find that the economic outlook, risk...

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How Have Households Used Their Stimulus Payments and How Would They Spend the Next?

Olivier Armantier, Leo Goldman, Gizem Koşar, Jessica Lu, Rachel Pomerantz, and Wilbert van der Klaauw In this post, we examine how households used economic impact payments, a large component of the CARES Act signed into law on March 27 that directed stimulus payments to many Americans to help offset the economic fallout from the coronavirus pandemic. An important question in evaluating how much this part of the CARES Act stimulated the economy concerns what share of...

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Expanding the Toolkit: Facilities Established to Respond to the COVID-19 Pandemic

Anna Kovner and Antoine Martin First of three posts The Federal Reserve’s response to the coronavirus pandemic has been unprecedented in its size and scope. In a matter of months, the Fed has, among other things, cut the federal funds rate to the zero lower bound, purchased a large amount of Treasury securities and agency mortgage‑backed securities (MBS) and, together with the U.S. Treasury, introduced several lending facilities. Some of these facilities are very similar to...

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How Did State Reopenings Affect Small Businesses?

Rajashri Chakrabarti, Sebastian Heise, Davide Melcangi, Maxim Pinkovskiy, and Giorgio Topa In our previous post, we looked at the effects that the reopening of state economies across the United States has had on consumer spending. We found a significant effect of reopening, especially regarding spending in restaurants and bars as well as in the healthcare sector. In this companion post, we focus specifically on small businesses, using two different sources of high-frequency data,...

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Tracking the Spread of COVID-19 in the Region

Jaison R. Abel, Jason Bram, Richard Deitz, and Jonathan Hastings The New York Fed today unveiled a set of charts that track COVID-19 cases in the Federal Reserve’s Second District, which includes New York, Northern New Jersey, Fairfield County Connecticut, Puerto Rico, and the U.S. Virgin Islands. These charts, available in the Indicators section of our Regional Economy webpage, are updated daily with the latest data on confirmed COVID-19 cases from The New York Times, which...

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Are Financially Distressed Areas More Affected by COVID-19?

Rajashri Chakrabarti, William Nober, and Maxim Pinkovskiy Building upon our earlier Liberty Street Economics post, we continue to analyze the heterogeneity of COVID-19 incidence. We previously found that majority-minority areas, low-income areas, and areas with higher population density were more affected by COVID-19. The objective of this post is to understand any differences in COVID-19 incidence by areas of financial vulnerability. Are areas that are more financially distressed...

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