. why do we do this? why is it important to generate insights about individual workers rather than relying just on analysis of the aggregate data? the first, and most obvious, point is that the aggregate masks the experiences of individuals. not all workers and consumers experience the economy in the same way. employment, wage and income growth, housing, education, credit and a host of other outcomes vary significantly across different cohorts of individuals and these differences in turn can vary over the business cycle. to understand important economic concepts like full employment, financial security, productivity growth and the impact of education, it is vital to understand not just the average experience but rather how all cohorts of the population are faring. this understanding is important in and of itself, especially in evaluating the impact of critical trends affecting the economy, like technological innovation or demographics, as well as the policies intended to respond to the impacts of those trends. we cannot fully understand whether policies have improved social welfare unless we understand how the impact of those policies varies across individuals. but understanding heterogeneity is important even if we are just examining policy impact in the 1 / 2 bis central bankers'speeches aggregate. the most innovative macroeconomic models, those at the frontier of current economic work, recognize heterogeneity across consumers in assessing how monetary and fiscal policy changes are transmitted through the economy. these models incorporate individuals with different marginal propensities to consume, with different amounts of wealth or access to borrowing, or who face different risk exposures, such as the chance they become unemployed, over the business cycle. incorporating these factors can yield quite distinct insights about how changes in monetary or fiscal policy can affect growth, employment, wages and inflation. for those who want to know more, we published a blog post on monday of last week that describes the output of just such a model. regardless of the specific details, the key is that differences across individuals can be important for understanding how the economy works, even in the aggregate. for all these reasons, the research group at the new york fed is committed to continue our work on heterogeneity, across several dimensions of what we do. we are always looking for ways to expand and deepen our knowledge, to enhance the data that is available to our economists and others to do deep, sophisticated research on these topics, and, critically, to publish the work so that we are adding to the store of knowledge both among academic researchers and among policymakers. we are well

more broadly in the tri - party repo market, prompting the federal reserve to intervene in order to restore confidence and market functioning. this intervention took the form of the creation of a primary dealer credit facility in march 2008, and a subsequent expansion of the facility in september 2008. the scope and scale of the market disruption were clearly very troublesome. as many of you are aware, the federal reserve bank of new york published a white paper in may 2010 that highlighted three critical sources of instability associated with practices in the tri - party repo market : ( 1 ) the market ’ s excessive reliance on intraday credit from the clearing banks ; ( 2 ) weaknesses in the liquidity and credit risk management practices of cash lenders and clearing banks that left them vulnerable to stress environments ; and ( 3 ) the lack of a mechanism or process for liquidating collateral during periods of stress in a manner that did not destabilize other segments of the financial system. after the crisis, we asked the industry to help develop a plan to reengineer the tri - party repo settlement infrastructure to mitigate these risks. the industry responded by identifying key changes that could be made to the platform to eliminate market reliance on intraday credit, thereby removing a key source of fragility observed in 2008. this process was challenging at times, and ultimately required our intervention as a supervisor to move forward. but the industry successfully developed a roadmap for reform that is the basis for the changes now being implemented. the clearing banks are making substantial investments to reengineer bis central bankers ’ speeches their tri - party repo settlement processes, while lenders and borrowers are making adjustments to their business practices and technologies to ensure they are ready for changes that are occurring in the market. when completed at the end of next year, we expect that these changes will substantially improve the stability of the market. indeed, the work completed to date has already reduced the amount of activity being financed on an intraday basis from 100 percent to about 70 percent, and we project that intraday credit usage will decline to no more than 10 percent by the end of next year. by removing the clearing bank from the role of substantial intraday lender, and making tri - party repurchase exposures truly bilateral, we expect that market participants will have better incentives to manage their liquidity and credit risks more prudently. while these changes represent positive developments that will enhance the stability of the triparty repo market, an