The nature of the business cycle appears to have changed. Prior to the 1990s, recoveries
from recessions were quick and steep; after the past three recessions, however, recoveries were
weak and prolonged.
The level of aggregate excess reserves held by U.S. depository institutions increased significantly
at the peak of the financial crisis of 2007-09. Although the amount of aggregate reserves is almost
entirely determined by the policy initiatives of the central bank that act on the asset side of its
balance sheet, the motivations of individual banks in accumulating reserves differ and respond
to the impact of changes in the economic environment on individual institutions.
This paper uses several methods to study the interrelationship among Divisia monetary aggregates, prices, and income, allowing for nonstationary, nonlinearities, asymmetries, and time-varying relationships among the series.
This paper explores the (late) nutrition-cognition link using novel panel data
from India for very young children. We estimate a value-added model of cogni-
tive development that corrects for biases in the previous literature.
The Malthusian theory of evolution disregards a pervasive fact about human
societies: they expand through conflict. When this is taken account of the long-run
favors not a large population at the level of subsistence, nor yet institutions that
maximize welfare or per capita output, but rather institutions that maximize free
Previous research has established that the Federal Reserve’s large scale asset purchases
(LSAPs) significantly influenced international bond yields. We use dynamic term structure
models to uncover to what extent signaling and portfolio balance channels caused these
Factor models have become useful tools for studying international business cycles. Block
factor models [e.g., Kose, Otrok, and Whiteman (2003)] can be especially useful as the zero
restrictions on the loadings of some factors may provide some economic interpretation of the
A large literature studies the information contained in national-level economic
indicators, such as financial and aggregate economic activity variables, for forecasting and
nowcasting U.S. business cycle phases (expansions and recessions.)
We study the contraction of foreign direct investment (FDI) flows in the United States during the recent financial crisis and show their unusual non-resiliency, which depends in part on the global nature of the economic recession, but also on the increases in the cost of financing FDI in the economies in which the flows originate.
Characterizing asset price volatility is an important goal for financial economists. The literature has shown that variables that proxy for the information arrival process can help explain and/or forecast volatility.
We investigate whether race and ethnicity influenced subprime loan pricing during
2005, the peak of the subprime mortgage expansion. We combine loan-level data on the
performance of non-prime securitized mortgages with individual- and neighborhood-
level data on racial and ethnic characteristics for metropolitan areas in California
This paper surveys recent developments in the evaluation of point forecasts.
Taking West’s (2006) survey as a starting point, we briefly cover the state of the litera-
ture as of the time of West’s writing.
Do parents alter their investment in their child’s human capital in response to changes in school inputs? If they do, then ignoring this effect will bias the estimates of school and parental inputs in educational production functions.
Much of the literature examining the effects of oil shocks asks the question ―What is an oil shock? and has concluded that oil-price increases are asymmetric in their effects on the US economy. That is, sharp increases in oil prices affect economic activity adversely, but sharp decreases in oil prices have no effect.
We investigate the importance of trend inflation and the real-activity gap for explaining observed inflation variation in G7 countries since 1960. Our results are based on a bivariate unobserved-components model of inflation and unemployment in which inflation is decomposed into a stochastic trend and transitory component.