has barely budged since the recession ended. it will be regional indexes of coincident economic indicators see, for additional discussion of this topic, william c. dudley. 2011. job creation in the region. remarks at the quarterly regional economic press briefing, new york city. august 12, 2011. bis central bankers ’ speeches difficult for growth in the region ’ s economy to resume and for unemployment to decline until the public sector stabilizes. an important plus for the local economy is the capital region ’ s housing sector, which has weathered the economic storm relatively well. as a result, the drop - off in economic activity that is connected, directly and indirectly, to the performance of the housing sector has not been as severe here as it has been in many other places around the country. like much of upstate new york, albany ’ s housing market has proven more stable than much of the rest of the country. during the 2000 – 2006 housing boom, albany ’ s house prices rose by 85 percent, much higher than the roughly 50 percent average increase in upstate new york as a whole and almost as high as the doubling of house prices seen nationally. unlike the rest of the nation, though, the region ’ s housing market has been comparatively stable since then. prices have declined by about 7 percent from their peak here, compared with a decline of 32 percent nationally. nonetheless, declining house prices coupled with a sluggish jobs recovery has increased financial pressures on families. during the recession, all across the nation, high levels of debt led to a soaring number of delinquencies. many families found that they needed to reduce their debt to more sustainable levels. drawing on the special consumer credit panel i mentioned earlier i can tell you that these trends have certainly affected people in this area. 3 but the good news is that the effects have not been quite as severe here as they have in much of the country. households in the albany region did not accumulate as much debt as did households in the rest of the state and country during the run - up to the crisis. recent data indicate that the average adult in albany has about $ 40, 000 of debt, which is about 20 percent lower than the average across the state and country as a whole. thus, financial strains on many families in the albany area were lower than in many other places around the state and nation. however, the number of delinquencies did rise significantly during the recession in the area, so it is clear that some households face strong

debt, firms fill the resulting gap by issuing more short - term debt. 10 in related work, jeremy stein ( 2012 ) points out that, notwithstanding their private benefits, there are systemic risks involved when the private sector creates money - like assets. for many reasons, if private intermediaries run into difficulty issuing those assets or in rolling over their short - term debt, then they must deleverage abruptly. in fact, the crisis of 2007 – 09 was characterized by runs on all four of the money - like instruments i mentioned earlier, namely repo, asset - backed commercial paper, money market mutual fund shares, and auction - rate securities. those runs can lead to selling off the loans or securities that were financed by the issuance of those instruments and also may initiate fire sales. a fire sale is caused when assets are sold at a time when many of the likely buyers of those assets do not have the capacity to purchase them, leading to severe downward price adjustments. these price movements create additional problems for other financial sector players, as the declining value of the securities that were sold often means that the value of the securities that they hold are also marked down, reducing their ability to obtain or retain financing to hold their portfolio of securities. this can lead to additional sales, worsening the fire sale conditions, in a negative feedback loop that amplifies the initial shock to the financial sector. the emphasis on fire sales when private intermediaries encounter difficulty rolling over their short - term debt is complemented by research that posits that the role of banks is to create and preserve liquidity of their money - like liabilities such as deposits, repos, and other short - term debt. 11 in normal times, these instruments are very safe and it is believed by people and institutions that invest in them that no special monitoring of those instruments is needed. consequently, investors remain ignorant of the precise condition of the intermediary to whom they are lending, or of the securities that back their loan. however, once conditions worsen, suddenly the nature of the debt changes, in that the people and institutions that hold the debt see greenwood, hansen, and stein ( 2010, 2015 ), krishnamurthy and vissing - jorgensen ( 2012 ), and carlson et al. ( 2014 ). this finding is further supported by the finding that the share of safe assets in the economy has been relatively steady since the 1950s. others confirm those results and show that the substitution of privately - created short