Official Demand for U.S. Debt: Implications for U.S. Real Rates

We estimate a structural term-structure model of U.S. real rates, where arbitrageurs accommodate demand pressures exerted by domestic and foreign official investors. Official demand affects rates by altering the aggregate price of duration risk, and thereby bond risk premiums. Although foreign central banks' demand contributed to reduce long-term real rates mainly in the years prior to the global-financial crisis, the Federal Reserve's demand lowered rates during the quantitative easing period. Overall, the two-factor model, augmented to account for changing liquidity conditions, offers a good representation of real rates during the 2001–16 period; however, we flag some caveats and possible extensions.     

Union Members' Usage of IT

An important issue in assessing the potential benefits of information technology (IT) as a tool for increasing labor's effectiveness is union members' use of IT. Using 2003 Current Population Survey data, we examine the union members' IT and Internet usage at home and work. We find that union members are more intense users of IT at work than nonunionized employees and that high-intensity IT users constitute about one-third of the union sample.