FRBSF Economic Letters

Economic analysis for a general audience

Galina Hale and John Krainer


How well stress tests measure a bank’s ability to survive adverse conditions depends on the statistical modeling approach used. Banks can access data on loan characteristics to precisely estimate individual default risk. However, macroeconomic scenarios used for stress tests—as well as the reports banks must provide—are for a bank’s entire portfolio. So, is it better to aggregate the data before or after applying the model? Research suggests a middle-of-the-road approach that applies models to data aggregated at an intermediate level can produce accurate and stable results.

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Analysis of current economic developments and the outlook

SF Fed Forecast Preview

The SF Fed Forecast Preview is an advance release of the monthly SF Fed FedViews publication. Our forecasts of GDP, inflation, and unemployment will usually be released will usually be released on the second Tuesday of each month.

Western Economic Developments

Western Economic Developments is linked to via Fed in Print only.

Working Papers

The latest in economic research

Gilbert Cette, John G. Fernald, and Benoit Mojon

Since the Great Recession, productivity growth slowed around the world. We highlight that this pace slowed before the recession for the U.S. and Europe. This suggests potential importance of other factors, such as the relative slowing during and before the recession from previous fast-paced frontiers in IT. We provide VAR and panel-data evidence that changes in real interest rates influenced productivity dynamics in this period. In particular, the sharp decline in real interest rates in Italy and Spain seemed to trigger unfavorable reallocations large enough to reduce total factor productivity.

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