Financial institutions

FEDS Paper: Challenging Demographic Representativeness at State Borders: Implications for Policy Research

03/07/2025 Federal Reserve Central banks

Benjamin S. Kay and Albina KhatiwodaThis study examines the demographic characteristics of U.S. state border counties, comparing them with those of nonborder counties. The demographic representativeness of border counties is essential for the interpretation of the results in state border-county difference-in-difference analyses, used in state policy evaluations. Our findings reveal that border counties generally have higher proportions of White, older, and disabled populations.

FEDS Paper: CardSim: A Bayesian Simulator for Payment Card Fraud Detection Research

02/28/2025 Federal Reserve Central banks

Jeffrey S. AllenPayment fraud has been high in recent years, and as criminals gain access to capability-enhancing generative AI tools, there is a growing need for innovative fraud detection research. However, the pace, diversity, and reproducibility of such research are inhibited by the dearth of publicly available payment transaction data. A few payment simulation methodologies have been developed to help narrow the payment transaction data gap without compromising important data privacy and security expectations.

IFDP Paper: How do Firms in Different Sectors Organize their Supply Chains? Evidence from Transaction-Level Import Data

02/27/2025 Federal Reserve Central banks

Sebastian Heise, Justin R. Pierce, Georg Schaur, and Peter K. SchottHeise et al. (2021) develop a model-based empirical measure—sellers per shipment (SPS)—to characterize how firms organize supply chains in response to a quality control problem. High SPS indicates spot-market purchasing with costly inspections, while low SPS suggests long-term relationships where buyers pay an incentive premium to prevent cheating.

The heterogeneous effects of household debt relief

02/26/2025 European Central Bank Central banks

Large-scale debt forbearance is a key policy tool during crises, yet targeting is challenging due to information asymmetries. Using transaction-level data from a Portuguese bank during COVID-19, we find that financially fragile households are more likely to enter forbearance, irrespective of income shocks. Mortgage payment suspension increases consumption and savings, but effects differ across households. Low liquid wealth and income are associated with a higher marginal propensity to consume.

Critical input disruptions – mapping out the road to EU resilience

02/24/2025 European Central Bank Central banks

We study how disruptions to the supply of foreign critical inputs (FCIs) might affect value added at different levels of aggregation. FCIs are inputs primarily sourced from extra-EU countries with highly concentrated supply, or consisting in advanced technology products, or which are key to the green transition. Using firm-level customs and balance sheet data for Belgium, Spain, France, Italy and Slovenia, our framework allows us to assess how much – and how differently – geoeconomic fragmentation might affect European economies.

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