Since the federal funds rate reached the zero lower bound in late 2008, economists have been struggling to adapt their models to a long-term zero rate. Wu and Xia built upon previous research by Fischer Black to create a model for how the federal funds rate behaves during the ZLB period. In their model, the rate actually dips into the negative digits, which the actual federal funds rate does not do. The logic behind the model is that a negative shadow rate is a much better indicator of true economic conditions while the current zero rate merely masks the actual economic reality. It is also easier to use the shadow rate for trend analysis purposes, since the shadow rate is flexible and changes while the federal funds rate remains artificially fixed at zero. Thus, this paper seeks to provide a comparison between the Shadow Rate, as defined by Wu and Xia, and how three key banking variables (leverage, profitability, and non-performing loans to total loans) react in response to the shadow rate, along with three control variables: real GDP growth, inflation, and the current account to GDP ratio. Regression will also be used to determine how three key borrower variables (S&P 500 Index, Credibility Consumer Distress Index, and the ratio of nonfinancial corporate business debt securities to total assets) interact with the shadow rate and the three control variables previously mentioned.

No description available.

This paper focuses on the consumer expenditure habits in the years following the 2008 recession as compared to Milton Freidman’s Permanent Income Hypothesis. Panel data collected at the household level from the Consumer Expenditure Survey was used to analyze the change in consumption based on the change in income for the years 2009, 2010 and 2011. To achieve a greater understanding of expenditure patterns, this essay also analyzes the income elasticity of demand for elastic goods including expenditure on apparel, food eaten at restaurants, entertainment and transportation. With the use of panel and time series regressions we find that the Permanent Income Hypothesis holds true and consumers only marginally responded to a change in income in their consumption patterns. We hypothesize that the large spike in savings that was seen in May of 2008 resulted because of low consumer confidence, which in turn lead to a change in transitory consumption. Furthermore, we find that older adults spent more money on elastic goods than younger adults. This may be because older adults tend to have other assets that can financially support them in the case of a drastic change in income.

Fabricated metals' manufacturing sector employment in the United States declined following the onset of the 2008 recession. Premium compensation and benefits afforded to employees within the manufacturing sector amplified the negative effects of recessionary job losses. Using the regional macroeconomic complex adaptive systems (CAS) framework, the purpose of this study was to examine the geographic distribution of job losses, recovery rates, and adaptive behavior after the recession for the fabricated metals manufacturing sector by measuring and comparing effects in 50 East North Central division MSAs and 50 South Atlantic division MSAs in the United States. Independent sample t tests compared average job level change rates for the tested regions. Significant differences in mean job loss rates for the two divisions occurred between 2008 and 2010 and in mean job recovery rates between 2010 and 2012. A multiple regression model analyzed the relationship of the dependent variable post-recession employment level changes with the independent variables defined as workforce demographic changes and establishment level changes as indicators of adaptive behavior. Results revealed a significant relationship between the dependent variable and shifts in the workforce demographic profile but did not reveal a significant relationship between the dependent variable and changes in the number of firms engaged in this sector. This study forms the genesis of background data for measuring cross-regional performance in the presence of external shocks and serves as a foundation for developing incentive models based on thriving sectors and regions for individuals, organizational groups, and society as a whole in engendering economic growth and well-being.