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May/June 2008, Part 1

Posted 2008-05-01

The Federal Response to Home Mortgage Distress: Lessons from the Great Depression

by David C. Wheelock

This article examines the federal response to mortgage distress during the Great Depression: It documents features of the housing cycle of the 1920s and early 1930s, focusing on the growth of mortgage debt and the subsequent sharp increase in mortgage defaults and foreclosures during the Depression. 

Posted 2008-05-01

FOMC Consensus Forecasts

by William T. Gavin and Geetanjali Pande

In November 2007, the Federal Open Market Committee (FOMC) announced a change in the way it communicates its view of the economic outlook: It increased the frequency of its forecasts from two to four times per year, and it increased the length of the forecasting horizon from two to three years. 

Posted 2008-05-01

Laffer Traps and Monetary Policy

by Patrick A. Pintus

This article focuses on the interaction, in a stylized economy with flexible prices, of monetary and fiscal policy when both are active—active in the sense that how the policy instrument is set depends on the state of the economy. 

Posted 2008-05-01

Forecasting Inflation and Output: Comparing Data-Rich Models with Simple Rules

by William T. Gavin and Kevin L. Kliesen

There has been a resurgence of interest in dynamic factor models for use by policy advisors. Dynamic factor methods can be used to incorporate a wide range of economic information when forecasting or measuring economic shocks.