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The Federal Reserve Bank of St. Louis Review
A bimonthly research journal intended for an economically informed but broad readership—from the undergraduate student to the PhD.
MAY/JUNE 2012 Vol. 94, No. 3
Milton Friedman, the Demand for Money, and the ECB’s Monetary Policy Strategy
The European Central Bank (ECB) assigns greater weight to the role of money in its monetary policy strategy than most, if not all, other major central banks. Nevertheless, reflecting the ...
Liquidity Shocks, Real Interest Rates, and Global Imbalances
The author uses a simple neoclassical model to show how liquidity shocks at home and abroad can contribute to trade imbalances and low real interest rates. The author’s ...
An Application of Conventional Sovereign Debt Sustainability Analysis to the Current Debt Crises
The developing international debt crisis has unleashed unanticipated fears that more governments in some advanced economies may default on their sovereign debt and trigger a global financial tsunami. This article provides ...
Federal Reserve Lending to Troubled Banks During the Financial Crisis, 2007-2010
Numerous commentaries have questioned both the legality and appropriateness of Federal Reserve lend- ing to banks during the recent financial crisis. This article addresses ...
MARCH/APRIL 2012 Vol. 94, No. 2
The author discusses the effectiveness of fiscal approaches to stabilization policy. The conventional wisdom before 2007 was ...
How Home Loan Modification through the 60/40 Plan Can Save the Housing Sector
Many well-respected economists have suggested plans for mortgage restructuring built on the idea of share appreciation mortgages, which generate rather complex transactions with conflicting interests between the lender and the homeowner. The 60/40 Plan, ...
The Dual Mandate: Has the Fed Changed Its Objective?
The Federal Reserve is said to have a dual mandate of price stability and full employment. While the Fed ...
Many Moving Parts: The Latest Look Inside the U.S. Labor Market
The U.S. economy has gained roughly 2.8 million jobs since early 2010. That may be cold comfort ...
JANUARY/FEBRUARY 2012 Vol. 94, No. 1
Persistent Macroeconomic Imbalances in the Euro Area: Causes and Consequences
In this paper, the authors document a growing divergence between current account imbalances in northern and southern euro area countries from 1992 to 2007. The imbalance occurred ...
How Good Are the Government’s Deficit and Debt Projections and Should We Care?
Each year, the Congressional Budget Office (CBO) publishes its Budget and Economic Outlook. The CBO’s deficit ...
Taylor-Type Rules and Total Factor Productivity
This paper examines the impact of a persistent shock to the growth rate of total factor productivity in a New Keynesian model in which the central bank does not observe the shock. The authors then ...
The Federal Reserve is not formally inflation targeting. Nevertheless, it is commonly believed ...