May/June 2011

In This Edition

  • Dynamics of Externalities: A Second-Order Perspective

    First-order approximation methods are a standard technique for analyzing the local dynamics of dynamic stochastic general equilibrium (DSGE) models. Although linear methods yield quite accurate solutions for a broad class of DSGE models, some important economic issues (e.g., portfolio choice and welfare) cannot be adequately addressed by first-order methods. This paper provides yet another case when first-order methods may be inadequate for capturing the business cycle properties of a DSGE model.

  • Have Acquisitions of Failed Banks Increased the Concentration of U.S. Banking Markets?

    During 2007-10, failures eliminated 318 U.S. commercial banks and savings institutions, about 4 percent of the total number of banks operating at the end of 2006. The assets and deposits of many failed banks were acquired by institutions that already had offices in markets served by the failed banks. This article investigates the impact of in-market acquisitions of failed banks on the concentration of local U.S. banking markets.

  • Patterns of Interstate Migration in the United States from the Survey of Income and Program Participation

    The authors describe the Survey of Income and Program Participation (SIPP) as a data source for migration studies. The SIPP is a panel dataset that provides information on income, employment outcomes, and participation in government programs.

  • Regional Aggregation in Forecasting: An Application to the Federal Reserve's Eighth District

    Hernández-Murillo and Owyang (2006) showed that accounting for spatial correlations in regional data can improve forecasts of national employment. This paper considers whether the predictive advantage of disaggregate models remains when forecasting subnational data. The authors conduct horse races among several forecasting models in which the objective is to forecast regional- or state-level employment.



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