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November/December 2007

Posted 2007-11-01

The Decline in the U.S. Personal Saving Rate: Is It Real and Is It a Puzzle?

by Massimo Guidolin and Elizabeth A. La Jeunesse

Since the mid-1990s, the national income and product accounts personal saving rate for the United States has been trending down, dropping into negative territory for three months during the past two years. This article examines measurement problems surrounding two of the standard definitions of the personal saving rate. 

Posted 2007-11-01

Measuring Commercial Bank Profitability: Proceed with Caution

by R. Alton Gilbert and David C. Wheelock

The federal tax code creates challenges for comparing the profit rates of different banks on a consistent basis. The earnings of banks that elect to operate under subchapter S of the federal tax code are not subject to federal corporate income tax, but shareholders of these “S-banks” are taxed on their pro rata share of the entire earnings of the bank. 

Posted 2007-11-01

The Determinants of Aid in the Post-Cold War Era

by Subhayu Bandyopadhyay and Howard J. Wall

The authors estimate the responsiveness of aid to recipient countries’ economic and physical needs, civil/political rights, and government effectiveness. They look exclusively at the post-Cold War era and use fixed effects to control for the political, strategic, and other considerations of donors. 

Posted 2007-11-01

Open Market Operations and the Federal Funds Rate

by Daniel L. Thornton

It is commonly believed that the Fed’s ability to control the federal funds rate stems from its ability to alter the supply of liquidity in the overnight market through open market operations. This article uses daily data compiled by the author from the records of the Trading Desk of the Federal Reserve Bank of New York over the period March 1, 1984, through December 31, 1996.