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Tuesday, July 29, 2014

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In the Business Review: Banks' Capital Structures, Why Markets Freeze, House-Price Dynamics

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Contact: Katherine Dibling, E-mail Senior Media Representative, (215) 574-4119

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Released today, the Second Quarter 2011 Business Review includes these articles: "Can We Explain Banks' Capital Structures?," by Mitchell Berlin; "Why Do Markets Freeze?," by Yaron Leitner; and "Understanding House-Price Dynamics," by Makoto Nakajima.

Can We Explain Banks' Capital Structures? PDF (310 KB, 11 pages)

  • The author discusses how understanding bank capital decisions over the 20-year period prior to the recent crisis can provide insights that may help us to evaluate reform proposals.
  • Author: Mitchell Berlin

Why Do Markets Freeze? PDF (253 KB, 8 pages)

  • Markets sometimes freeze. An example is the collapse of trading in mortgage-backed securities during the recent financial crisis. In this article, the author explains what a market freeze is and some of the theories as to why these freezes occur.
  • Author: Yaron Leitner

Understanding House-Price Dynamics PDF (323 KB, 9 pages)

  • In this article, the author explains a simple theory - user cost-rent equivalence - that helps us better understand house-price dynamics. The theory is based on the close relationship between user costs, which are the costs of owning a house for a year, and rents.
  • Author: Makoto Nakajima

The Business Review, which is published quarterly, presents articles written by our staff economists that are aimed at readers with a general interest in economics. Topics covered include economic policy, banking, and financial and regional economics. It includes less technical articles written by economists in the Bank's Research Department. They are intended for a wide audience and often address timely economic issues.

The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank holding companies, and provides financial services to depository institutions and the federal government. It is one of the 12 regional Reserve Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Philadelphia Federal Reserve Bank serves eastern Pennsylvania, southern New Jersey, and Delaware.

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