Short essays on the economic issues of the day written for a generally informed readership.
2010, No. 31
Is More QE in Sight?
Most analysts have concluded that the LSAP successfully reduced long-term market interest rates. How, exactly, do LSAP-style programs succeed?
2010, No. 27
Deflation and the Fisher Equation
So, according to Irving Fisher, one reason to worry about deflation is that the federal funds rate is expected to be held near zero as the economy grows out of this recession.
2010, No. 22
Sovereign Debt Shadows
All five peripheral EU countries face burdensome public debt and budget deficits, but the causes for uncertainty in each country’s situation differ.
2010, No. 18
A Jump in Consumer Loans?
The dramatic increases [in consumer loans] over the past few months have been caused by a new reporting requirement issued by the Financial Accounting Standards Board.
2010, No. 14
Monetizing the Debt
A more interesting and economically relevant definition of “monetizing the debt” is based on the Fed’s motivation rather than its actions.
2010, No. 13
City Growth and Industry Employment Reallocation
Cities initially more specialized in older technologies may have had more difficulty adapting to newer technologies because skills in initially dominant industries were not useful to new industries.
2010, No. 11
Monetary Policy and Asset Prices
The housing market crisis is the latest
reminder that asset prices can and do
run wild at rates capable of negative
effects on real economic activity.
Not surprisingly, this has reinvigorated
debate over whether central banks
should respond to asset price bubbles.
2010, No. 7
Why Income Per Worker Differs Worldwide
A higher entry cost distorts the industry structure and the allocation of productive factors across firms, which results in lower total factor productivity and output per worker.
2010, No. 4
Okun’s Law: Output and Unemployment
U.S. output growth declined less than in most other industrialized countries while U.S. unemployment rose higher and faster than it did in most other major industrialized countries.
2010, No. 3
Are Low Interest Rates Good for Consumers?
Although banks’ cost of funds has dropped dramatically with the federal funds rate target, households’ cost of funds has remained high, especially if we look at their cost of borrowing relative to their rate of return on saving.
2010, No. 2
Measuring Financial Market Stress
Although the STLFSI suggests the level of financial stress in the markets has declined significantly since September 2008, the stress level remains modestly higher than average.
2010, No. 1
The Evolving Size Distribution of Banks
If limiting the size of large banks were considered appropriate to reduce systemic risk, it would be a clear change of direction relative to the long-term evolution of the industry.