When Do Recessions Begin and End?
With the funds rate driven to levels far below its target, the FOMC had no recourse but to adjust the target accordingly.
With the funds rate driven to levels far below its target, the FOMC had no recourse but to adjust the target accordingly.
On balance, the figure suggests that structural unemployment during economic downturns has increased since 1991.
The FOMC’s two-pronged approach involves a potential conflict: forward guidance assumes a high degree of substitutability across the maturity structure, while quantitative easing assumes a low degree.
Current excess reserves could create a massive increase in the money supply if banks significantly increase their lending or investing.
The FOMC’s "mandate-consistent inflation rate" is generally judged to be "about 2 percent or a bit below."
From 1999 to 2004 Japan unilaterally sold a combined, and unprecedented, 500 billion dollars of yen.
Most analysts have concluded that the LSAP successfully reduced long-term market interest rates. How, exactly, do LSAP-style programs succeed?
The severe contractions and deflationary episodes that followed 19th century U.S. banking crises have shaped the U.S. perceptionof deflation.
The effect of QE2 on interest rates could be small and limited to an announcement effect.
With the funds rate driven to levels far below its target, the FOMC had no recourse but to adjustthe target accordingly.
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.
Large-scale asset purchases may have limited power to raise TIPS-implied inflation expectation; something that might appeal to policymakers fighting deflation.
Must the FOMC increase its target before inflation, or will inflation increase and cause the FOMC to increase its target?
Why was the increase in the money stock so small when the increase in the monetary base was so large?
The recent strengthening of the correlations between U.S. GDP growth and that of Mexico, Canada, and Euro-19 validates further consideration of the performance of U.S. trade partners for growth.
All five peripheral EU countries face burdensome public debt and budget deficits, but the causes for uncertainty in each country’s situation differ.
Business cycle measures can provide timely statistical evidence of turning points.
Market participants rebalance their portfolios in advance of a recession.
The important point is that both the Chinese trade surplus with the United States and the amassed foreign reserves result from the savings decisions of Chinese consumers.
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.
During 1932, with congressional support, the Fed purchased approximately $1 billion inTreasury securities.
During a recession, the participation rate typically declines as discouraged workers exit the labor force.
Inflation is seldom caused by lump-sum transfers but is often caused by higher government spending programs.
A more interesting and economically relevant definition of “monetizing the debt” is based on the Fed’s motivation rather than its actions.
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.
Economic theory predicts that fast growth can lead to high saving rates if people lack financial institutions that allow them to borrow.
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.
The Reserve Bank presidents are fully accountable to our democratic institutions and the decentralized structure promotes healthy debate onmonetary policy and regulatory issues.
Factors other than changes in oil supply may cause changes in oil prices.
The recent declines in tightening of lending standards suggest that business lending may be poised for a rebound.
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.
Credit and M2 may be driven simultaneously as part of a broader financial intermediation process; a common underlying factor may be the interest rate.
FOMC members have incentives to construct their forecasts strategically.
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.
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.
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.
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.
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