Our recent post on women in the workforce included a lyric from Dolly Parton and an explanation of the composition effect. Here’s the formal definition: “The part of the observed between-group difference in the distribution of some economic outcome that can be explained by differences in the distribution of covariates.”
That’s a doozy of a definition, so let’s use a picture that’s worth 1,000 words to explain it… The graph shows the year-to-year growth rate of average home prices in the United States (blue bars) and in its 20 largest metropolitan areas (red bars). The blue bars and red bars generally extend in the same direction, although by different magnitudes. Because these top 20 metropolitan areas are part of the United States, it’s not surprising both sets of average prices move in the same direction.
But look what happened in 2010: Average home prices overall decreased while average home prices in the

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FRED’s as good as gold, and the FRED Blog has used London Bullion Market Association data to prove it. In fact, our previous post tracks gold prices and appraises the new gold bar at the St. Louis Fed. Now these gold prices are quoted in three different currencies—U.S. dollars, British pounds, and euros—which is a golden opportunity to discuss arbitrage.
Arbitrage is the risk-free purchase and sale of an asset to profit from a difference in price across markets. Because the gold fixing price is quoted in three different currencies at once, it’s possible that one could make a profit by buying and selling gold in different currencies and then selling the currencies. For example: buy gold in U.S. dollars, sell the gold right away in British pounds, and then convert the pounds back to dollars in the foreign exchange market.
FRED can help us visualize this shiny concept: In the graph above,

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The U.S. Mint is missing one gold bar.
No. This isn’t the plot of a National Treasure sequel. It’s the latest addition to the St. Louis Fed’s Economy Museum: a 9.75” long, 1.5” tall bar of gold on loan from the Mint. Because the bar is 99.999% pure gold, it weighs 28 pounds! So, how much does a 28-pound gold bar cost?
Let’s use FRED data to figure out the price of this bar, which is on display, coincidentally, right across from the museum’s FRED exhibit.
Although some people see gold as a hedge against inflation, the graph above shows just how volatile the price of gold can be. Here, we have the “fixing price” of a troy ounce of gold in U.S. dollars in the London bullion market. London is the largest trading center for precious metals, and gold prices are reported daily at two different times (10:30 AM and 3:00 PM

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Many data series in FRED are versatile enough to be viewed in different ways. We’ve offered two perspectives so far on CO2 emissions at the national level. Today, we offer another perspective—emissions at the state level—thanks to GeoFRED. The map above shows total emissions for each continental U.S. state. These numbers depend on the number of residents, types of economic activity, and types of fuel used. So it’s no surprise that the most populous states are the ones emitting the most carbon dioxide, with the possible exception of Louisiana.
View on GeoFRED®
Emissions from coal show something different. For example, the largest state, California, actually has one of the lowest coal-related emission levels. The relatively smaller states of Michigan, Missouri, and West Virginia, on the other hand, rank among the highest in coal-related emissions, which is a reflection of the fuel these states use for power generation.
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Emissions from

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High-frequency data can include seasonal factors that affect economic activity. The timing of federal and local holidays changes each year, and weekends can fall all over the place in any given month. So not every period has the same number of business days. FRED now has data to help you sort that out.
Although it doesn’t account for holidays, the graph above shows the number of weekdays in a month. The data come from a release on domestic auto and truck production from the Board of Governors, which helps in cleaning the data of seasonal and predictable factors. The variation in weekdays is actually quite important, as it fluctuates between 20 and 23 days per month, which is a difference of over 10%.

The second graph shows the number of weekdays in a quarter, which fluctuates between 64 and 66 days, a difference of  about 3%, which is still large when you

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The British have a history of recording excellent historical data, and we’ve already written a few related posts. Today we look at central bank assets for the Bank of England, founded in 1694. The graph above shows the assets as a share of GDP since 1701, which is a remarkable timeline, especially because it requires estimates of GDP from before the American Revolutionary War not to mention the Battle of Culloden!
This FRED graph shows us that assets in the 18th century reached a fifth of GDP before slowly receding. There were run-ups during the turmoil of the Great Depression, World War II, and the Great Recession and its financial crisis. For comparison, we added the (much shorter) corresponding series for the United States in red. It’s pretty amazing how well they match up.
How this graph was created” Search for “Bank of England assets,” select the appropriate series, and click “Add

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In a previous post, we looked at carbon emissions by fuel type broken down by different economic sectors. Today, we slice the data another way: We look at each economic sector and break down their emissions by fuel type. The first graph shows that the big emitters are transportation, electric power generation, and industry. Overall emissions have tended to decline, mostly thanks to a decline from power generation.

The next graph shows the commercial sector. Overall, it emits relatively little CO2 and all fuel types seem to be on the decline. The recent surge in gasoline is most likely due to a reclassification of some sub-sectors into the commercial sector.

The next graph, which shows emissions from the industrial sector, isn’t very enlightening, as the largest fuel type is “Other.” But all fuel types are emitting less, except for distillate fuels such as diesel.

Electric power generation is traditionally the largest emitter, so

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FRED’s all about data, which economists often use to conduct or test their research. So let’s look at some of that research…
In a recent St. Louis Fed working paper, economists Maximiliano Dvorkin, Juan M. Sanchez, Horacio Sapriza, and Emircan Yurdagul study how the arrival of news affects emerging markets. They use a logic from a 2006 paper by Beaudry and Portier to identify news events—aka “shocks.” The idea is to compare a financial index that captures the expected future performance of the economy with a measure of current performance. They identify “good news” when the expected performance variable improves without any proportional improvement in the current performance variable. On the flip side, they identify “bad news” when the expected performance variable declines without any proportional decline in the current performance variable.
Because their research focuses on emerging markets, they use the JPMorgan Emerging Market Bond Index (EMBI) spread, which captures the

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Here at the FRED Blog we’re continuously looking for self-improvement opportunities, and our New Year’s resolution is to focus on home-cooked foods. Food at home is often fresher and healthier, but it’s also less expensive: The graph above shows that the cost of food away from home has been increasing much faster than the average of all foods. We’ll try to pepper the FRED Blog with healthier and tastier posts all through the year.
How this graph was created: Search for “CPI food,” check the two series, and click “Add to Graph.”
Suggested by Christian Zimmermann.

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A previous post discussed the recent decrease in the labor share and increase in the capital share in GDP for many nations. Reasons for this decline in payments to labor include capital-augmenting technology growth, globalization, and changing skill composition of the labor force. In this post, we focus solely on India’s story.
In the 1990s, India began to implement a series of economic reforms that, among other things, helped open up the economy to trade and foreign investment. These policy changes reduced import tariffs and regulations, with the aim of making the economy more market-oriented. As a result, the labor share of India’s income decreased significantly.
The graph above shows that India’s trade openness, measured as the ratio of the sum of India’s exports and imports to India’s GDP, increased by nearly 124% between 1980 and 2017. (In comparison, U.S. trade openness increased by only 19% over the same period.) India’s labor share

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