Financial institutions

FEDS Paper: Effects of Monetary Policy on Household Expectations: The Role of Homeownership

Hie Joo Ahn, Shihan Xie, and Choongryul YangWe study the role of homeownership in the effectiveness of monetary policy on households' expectations. Empirically, we find that homeowners revise down their near-term inflation expectations and their optimism about future labor market conditions in response to a rise in mortgage rates, while renters are less likely to do so.

FEDS Paper: Pricing of Climate Risk Insurance: Regulation and Cross-Subsidies

Sangmin S. Oh, Ishita Sen, and Ana-Maria TenekedjievaHomeowners’ insurance, a $15 trillion market by coverage, provides households financial protection from climate losses. Insurance premiums (rates) are subject to significant regulations at a state level in the United States. Using novel data on filings made by insurers to regulators, we propose a metric to quantify the extent of regulation in individual states.

FEDS Paper: The FOMC's Committee on the Directive: Behind Volcker's New Operating Procedures

Nicholas Burk and David H. SmallOn October 6, 1979, Chairman Volcker announced that the Federal Reserve was embarking on a new, forceful, and ultimately successful campaign to lower the rampant inflation of that time. At the center of this campaign were new operating procedures for conducting monetary policy—procedures that focused daily open market operations on controlling the quantity of monetary reserves and on the quantity of nonborrowed reserves in particular.

FEDS Paper: Consumers and Guaranteed Asset Protection (GAP Protection) on Vehicle Financing Contracts: A First Look

Thomas A. Durkin, Gregory Elliehausen, and Thomas A. Miller, Jr.Guaranteed Asset Protection (GAP) shields purchasers from financial risks of losses exceeding insured collateral values if vehicles become total losses. Yet surprisingly little is known about the sales of this product or consumers’ attitudes toward it. In this study, we report the results of a representative national survey conducted by the Survey Research Center (SRC) of the University of Michigan.


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