Federal Reserve Bank of Dallas

About: Federal Reserve Bank of Dallas is a other organization based out in Dallas, Texas, United States. It is known for research contribution in the topics: Monetary policy & Inflation. The organization has 196 authors who have published 994 publications receiving 35508 citations.

Collateral Damage: Refinancing Constraints and Regional Recessions

Abstract: In the current structure of the U.S. residential mortgage market, a decrease in property values may make it very difficult for homeowners to refinance their mortgages to take advantage of declining interest rates. In this paper, we show that this form of collateral constraint has greatly reduced refinancing in states with depressed property markets. We outline the interaction between regional recessions and refinancing constraints.

Return Dependence and the Limits of Product Diversification in Financial Firms

Abstract: Copula-GARCH models indicate dependence between bank returns and those to insurance underwriting, securities brokerage, and mortgage finance increased during the recent crisis. In contrast, dependence between banks and the broader market was little changed. The crisis-related jump in return dependence within the financial services sector was greatest for banks that had previously appeared the most independent. Larger banks were also especially prone to increased dependence. These findings raise doubts about the ability of financial conglomerates to diversify effectively and highlight the need for policy progress in methods for resolving such institutions should they become illiquid or insolvent.

Measuring Changes in Multiproduct Market Structure: An Application to U.S. Airlines

Abstract: The Entropy Index decomposition property is utilized to construct an aggregate index of route concentration that accounts for the multiple products, customer preferences and industry concentration. The Directed Divergence Statistic, an aggregate index which measures changes in market structure at the airline specific level, is similarly decomposed. We find that route concentration more closely resembles a duopoly than an industry with 16 major carriers. Further, the Directed Divergence Statistic decomposition reveals that while the industry seems to have absorbed the loss of national three carriers, those remaining engineered substantial changes in their product offerings to accommodate passengers.