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2011 / No. 41
Posted 2011-12-14

Initial Claims and Employment Growth: Are We at the Threshold?

by Kevin L. Kliesen, Michael W. McCracken, and Linpeng Zheng

One common threshold is that labor market conditions are improving when weekly unemployment claims fall below 400,000.
2011 / No. 40
Posted 2011-12-09

Jobless Recoveries or Jobless Growth?

by Adrian Peralta-Alva

Jobless recoveries since 2000 may be attributed to a slowdown in the long-term employment trend.
2011 / No. 39
Posted 2011-12-08

Real Estate Bubbles and Weak Recoveries

by Adrian Peralta-Alva

The slow economic recovery may be, at least in part, the natural result of the real estate bubble.
2011 / No. 38
Posted 2011-11-16

Inflation Objective and Policy Credibility: A Potential Problem for the FOMC

by Daniel L. Thornton

In order to maintain its credibility, however, the FOMC will have to take actions consistent with achieving its stated inflation objective.
2011 / No. 37
Posted 2011-11-14

Why Is Employment Growth So Low?

by Juan M. Sánchez and Daniel L. Thornton

Anemic investment in residential and commercial real estate has been a significant factor contributing to slow growth in employment.
2011 / No. 36
Posted 2011-11-10

Using Brent and WTI Oil Prices to Predict Gasoline Prices

by Kevin L. Kliesen and Michael T. Owyang

The spot prices of West Texas Intermediate and Brent crude oil recently diverged. If this divergence persists, economists and energy analysts may want to focus on Brent prices when predicting the level of gasoline prices.
2011 / No. 35
Posted 2011-11-08

Construction and the Great Recession

by Adrian Peralta-Alva

The boom in real estate prices during the early 2000s and the subsequent bust were key factors underlying the recessions in the United States and Europe.
2011 / No. 34
Posted 2011-11-07

Liquidity Crises in the Small and Large

by Richard G. Anderson and Barry Jones

Federal Reserve programs during the recent financial crisis sought to provide liquidity to individual firms or industries. An interesting additional question is whether the aggregate amount of liquidity in the economy was appropriate before and during the recent financial crisis.
2011 / No. 33
Posted 2011-10-19

State Balanced-Budget and Debt Rules

by Thomas A. Garrett

Balanced-budget rules alone are not sufficient to ensure states’ long-term fiscal health.
2011 / No. 31
Posted 2011-10-18

Immigration at the Extremes of the Skill Distribution

by Rubén Hernández-Murillo and Christopher J. Martinek

According to economists, in the 1980s and 1990s, immigration of low-skilled workers may have increased the labor supply of highly skilled women, and immigration of highly skilled workers may have increased the rate of innovation in the United States.
2011 / No. 32
Posted 2011-10-18

Households During the Great Recession: The Financial Accelerator in Action?

by Adrian Peralta-Alva

Households are the sector that the financial accelerator appears to have hit hardest, according to the data.
2011 / No. 30
Posted 2011-09-20

Searching for the Financial Accelerator: How Credit Affects the Business Cycle

by Adrian Peralta-Alva

Firms started repaying their debts during 2008-2009, and they did so while simultaneously accumulating highly liquid assets. These two observations are puzzling if one believes firms are purportedly starving for credit but cannot obtain it.
2011 / No. 29
Posted 2011-09-06

The FOMC’s Interest Rate Policy: How Long Is the Long Run?

by Daniel L. Thornton

The only outcome consistent with the Fisher equation holding and the FOMC’s zero interest rate policy is that the “long run” is considerably longer than 4.5 years.
2011 / No. 28
Posted 2011-09-01

Should Food Be Excluded from Core CPI?

by Michael W. McCracken

The greater a component’s SNR, the more useful the component should be in forecasting headline CPI.
2011 / No. 27
Posted 2011-08-31

Capital Controls by Any Other Name

by Brett W. Fawley and Luciana Juvenal

The embrace of ad hoc capital controls to address temporary market inefficiencies on a case-by-case basis, while pragmatic, perpetuates the view that each capital crisis is an isolated example of failed financial institutions.
2011 / No. 26
Posted 2011-08-30

Changes in the Mortgage Market Since the Crisis

by Rajdeep Sengupta and Bryan J. Noeth

It appears that mortgage origination and securitization is currently “in limbo”: Private securitization has all but disappeared and is being absorbed by government- sponsored enterprises.
2011 / No. 25
Posted 2011-08-29

The Gender Wage Gap

by Natalia A. Kolesnikova and Yang Liu

The actual gender wage disparity (which compares the wages of male and female workers with similar labor-force characteristics) is lower than the raw gender earnings gap.
2011 / No. 24
Posted 2011-08-22

Tax Rates and Revenue Since the 1970s

by Kevin L. Kliesen and Daniel L. Thornton

Before 2000, the tax burden shifted from the lowest 80% of earners to the highest 20%; since 2000, the burden has shrunk for all groups, but more so for the highest earners.
2011 / No. 23
Posted 2011-07-27

The Great Foreign Exchange Intervention of 2011

by Christopher J. Neely

In response to volatile market conditions, the G-7 financial authorities announced late on March 17 that they would jointly intervene the next day to reduce the value of the yen, citing concerns about “excess volatility and disorderly movements.” The yen immediately depreciated and traded with much less volatility in the subsequent week.
2011 / No. 22
Posted 2011-07-26

Some Closure on Foreclosures?

by Rajdeep Sengupta and Bryan J. Noeth

Contrary to popular perception, the foreclosure process can be very costly for a lender…it remains a puzzle as to why such large numbers of mortgages in default enter into foreclosure in the first place.
2011 / No. 21
Posted 2011-07-14

The Federal Debt: What’s the Source of the Increase in Spending?

by Kevin L. Kliesen and Daniel L. Thornton

The government increased payments to individuals without reducing spending elsewhere in the budget.
2011 / No. 20
Posted 2011-07-07

The Federal Debt: Too Little Revenue or Too Much Spending

by Daniel L. Thornton and Kevin L. Kliesen

The rise in the national debt... is entirely a consequence of the federal government’s increase of expenditures without an offsetting increase in revenues.
2011 / No. 19
Posted 2011-07-06

Oil Price Shocks and Inflation Risk

by Mingyu Chen and Yi Wen

Oil price shocks appear to have only transitory effects on headline inflation and virtually no impact on measures of underlying trend inflation.
2011 / No. 18
Posted 2011-06-24

Is the FOMC’s Policy Inflating Asset Prices?

by Daniel L. Thornton

Keeping the policy rate significantly and persistently below "long-run equilibrium rates" may inflate asset prices.
2011 / No. 17
Posted 2011-06-23

RMB Appreciation and U.S. Inflation Risk

by Mingyu Chen and Yi Wen

If oil prices continue to rise and the RMB continues to appreciate, the U.S. inflation rate may increase at a faster pace in the near future. And this would have an unwelcome impact on consumers’ wallets.
2011 / No. 16
Posted 2011-06-09

Core Versus Headline Inflation Again

by Daniel L. Thornton

Neither core nor headline inflation measures can consistently and reliably predict medium-term inflation well enough to be of much use to policymakers.
2011 / No. 15
Posted 2011-05-13

Income Mobility

by Thomas A. Garrett

Income inequality statistics ignore temporal changes in household income.
2011 / No. 14
Posted 2011-05-12

Food Prices and Inflation in Emerging Markets

by Luciana Juvenal and Brett W. Fawley

The experience of the past decade illustrates the sensitivity of inflation in emerging markets to rapidly rising food prices.
2011 / No. 13
Posted 2011-05-11

CPI Inflation: Running on Motor Fuel

by William T. Gavin

Fluctuations in the price of motor fuel (mainly gasoline) have caused most of the monthly noise and year-over-year fluctuations of headline CPI inflation over the past four years.
2011 / No. 12
Posted 2011-05-09

Core Versus Headline Inflation: An Opportunity for Greater Transparency

by Daniel L. Thornton

2011 / No. 11
Posted 2011-05-02

The Effects of Education on Health

by Rubén Hernández-Murillo and Christopher J. Martinek

In the United States, wide disparity exists in the health of individuals with different levels of education.
2011 / No. 10
Posted 2011-04-28

Monetary Policy's Effects on Unemployment

by Yi Wen

Permanent increases in the monetary base foreshadow eventual increases in inflation that can increase, rather than reduce, unemployment.
2011 No. 9
Posted 2011-04-18

U.S. Trade Springs Back

by Silvio Contessi and Hoda El-Ghazaly

The evidence suggests that the combination of a slowdown in trade finance and inventory adjustments likely explain the recent trade dynamics.
2011 / No. 8
Posted 2011-03-23

Fiscal Policy and Expected Inflation

by Christopher J. Neely

Despite U.S. fiscal problems, the Fed appears to still retain excellent inflation credibility with financial markets… Although confidence in the Fed might explain the quiescence of inflation expectations, the structure of U.S. government debt may be more important… [I]nflating away the U.S. debt simply would not work because a high proportion of the debt is in short-term or inflation-protected securities.
2011 / No. 7
Posted 2011-02-25

Monetary Policy at the Zero Bound

by Daniel L. Thornton

The average relationship between changes in the 10-year Treasury yield and changes in the funds rate over the 1987-2007 sample period is not indicative of the relationship between changes in the funds rate and changes in the 10-year Treasury yield that existed for more than a decade prior to the financial crisis.
2011 / No. 6
Posted 2011-02-24

Housing's Role in a Recovery

by Michael W. McCracken

Housing tends to contribute significantly to an economic recovery.
2011 / No. 5
Posted 2011-02-23

The Difference Between Currency Manipulation and Monetary Policy

by Christopher J. Neely

But because this [Chinese] exchange rate policy is externally focused and relies heavily on regulations, which restrain normal market forces, it is reasonable to say that the policy constitutes currency manipulation for purposes of gaining an advantage in trade.
2011 / No. 04
Posted 2011-02-22

Are Bank Reserves and Bank Lending Connected?

by Silvio Contessi

As long as the strength of the recovery remains uncertain, there are few other investment opportunities, after adjusting for risk and taxes, with anticipated returns greater than the near-zero interest the Federal Reserve pays on deposits.
2011 / No. 3
Posted 2011-01-14

Location and the Return to Education

by Natalia A. Kolesnikova

The return to a college education varies widely across U.S. cities.
2011 / No. 2
Posted 2011-01-13

Monetary Policy, Bubbles, and Goldilocks

by Richard G. Anderson

Monitoring of prices is essential lest future adjustments be misunderstood by the public as part of the dynamics of aggressive monetary policy.
2011 / No. 1
Posted 2011-01-01

What Does the Change in the FOMC's Statement of Objectives Mean?

by Daniel L. Thornton

In contrast, most economists believe that central banks have little or no ability to directly affect employment. The effect of monetary policy actions on employment is indirect and stems from central banks’ ability to affect output growth in the short run and achieve price stability in the long run.

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