#2008-014B "Excessive Demand and Boom-Bust Cycles"
by Patrick A. Pintus, and Yi Wen
June 2008
Revised June 2008

It has long been argued in the history of economic thought that boom-bust business cycles may be driven by over-investment (Tugan-Baranovsky, 1894; and Wicksell, 1906). But how is it possible to sustain over-investment without excessive savings? More...

#2008-013C "Why Money Growth Determines Inflation in the Long Run: Answering the Woodford Critique"
by Edward Nelson
May 2008
Revised August 2008

Woodford (2007) argues that it is not appropriate to regard inflation in the steady state of New Keynesian models as determined by steady-state money growth. Woodford instead argues that the intercept term in the monetary authority’s interest-rate policy rule determines steady-state inflation. In this paper, I offer an alternative interpretation of steady-state behavior, according to which it is appropriate to regard steady-state inflation as determined by steady-state money growth. More...

FORTHCOMING: Journal of Money, Credit, and Banking, May 2008

#2008-012A "Inflation, Monetary Policy and Stock Market Conditions"
by Michael D. Bordo, Michael J. Dueker, and David C. Wheelock
May 2008

This paper examines the association between inflation, monetary policy and U.S. stock market conditions during the second half of the 20th century. More...

#2008-011A "Monetary Policy: Why Money Matters and Interest Rates Don’t"
by Daniel L. Thornton
May 2008

Monetary policy is now conducted by targeting a very short-term interest rate. The Fed and other central banks attempt to control the price level by manipulating aggregate demand by adjusting their interest rate target. More...

#2008-009A "Oil and the U.S. Macroeconomy: An Update and a Simple Forecasting Exercise"
by Kevin L. Kliesen
April 2008

Recently, some analysts and economists had warned that the U.S. economy faces a much higher risk of falling into a recession should the price of oil rise to one hundred dollars per barrel or more. More...

PUBLISHED: Federal Reserve Bank of St. Louis Review, September/October 2008, 90(5), pp. 505-16

#2008-008A "Input and Output Inventory Dynamics"
by Yi Wen
March 2008

This paper develops an analytically tractable general equilibrium model of inventory dynamics. Inventories are introduced into a standard RBC model through a precautionary stockout-avoidance motive. More...

#2008-007A "When Does Determinacy Imply Expectational Stability?"
by James B. Bullard, and Stefano Eusepi
February 2008

We study the connections between determinacy of rational expectations equilibrium, and expectational stability or learnability of that equilibrium, in a relatively general New Keynesian model. More...

#2008-002A "Convergence in the United States: A Tale of Migration and Urbanization"
by Riccardo DiCecio, and Charles S. Gascon
January 2008

We use non-parametric distribution dynamics techniques to reassess the convergence of per capita personal income (PCPI) across U.S. states and across metropolitan and nonmetropolitan portions of states for the period 1969-2005. More...

#2008-001A "Multivariate Markov Switching With Weighted Regime Determination: Giving France More Weight than Finland"
by Michael J. Dueker, and Martin Sola
January 2008

This article deals with using panel data to infer regime changes that are common to all of the cross section. The methods presented here apply to Markov switching vector autoregressions, dynamic factor models with Markov switching and other multivariate Markov switching models. More...

#2007-053A "The Tax Treatment of Homeowners and Landlords and the Progressivity of Income Taxation"
by Matthew Chambers, Carlos Garriga, and Don Schlagenhauf
December 2007

This paper analyzes the connection between the asymmetric tax treatment of homeowners and landlords and the progressivity of income taxation using a quantitative overlapping generations general equilibrium model with housing and rental markets. More...