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September/October 2010

Posted 2010-09-01

Seven Faces of "The Peril"

by James Bullard

This article discusses the possibility that the U.S. economy may become enmeshed in a Japanese-style deflationary outcome within the next several years. To frame the discussion, the author relies on an analysis that emphasizes two possible long-run steady states for the economy: one that is consistent with monetary policy as it has typically been implemented in the United States in recent years and one that is consistent with the low nominal interest rate, deflationary regime observed in Japan during the same period.

Posted 2010-09-01

The Economic Progress of African Americans in Urban Areas: A Tale of 14 Cities

by Dan A. Black, Natalia A. Kolesnikova, and Lowell J. Taylor

How significant was the economic progress of African Americans in the United States between 1970 and 2000? The authors examine this issue for black men 25 to 55 years of age who live in 14 large U.S. metropolitan areas.

Posted 2010-09-01

Measuring International Trade Policy: A Primer on Trade Restrictiveness Indices

by Cletus C. Coughlin

Measuring the overall restrictiveness of a country’s international trade policies is important and, in fact, essential for estimating the effects of trade policies and for negotiations to reduce trade barriers. A good measure is also difficult to produce: Trade restrictiveness indices are constructed by combining the actual structure of trade restrictions, which is generally quite different across goods, into a single number.

Posted 2010-09-01

The Geographic Distribution and Characteristics of U.S. Bank Failures, 2007-2010: Do Bank Failures Still Reflect Local Economic Conditions?

by Craig P. Aubuchon and David C. Wheelock

The financial crisis and recession that began in 2007 brought a sharp increase in the number of bank failures in the United States. This article investigates characteristics of banks that failed and regional patterns in bank failure rates during 2007-10. The article compares the recent experience with that of 1987-92, when the United States last experienced a high number of bank failures.

Posted 2010-09-01

A Survey of Announcement Effects on Foreign Exchange Returns

by Christopher J. Neely and S. Rubun Dey

Researchers have long studied the reaction of foreign exchange returns to macroeconomic announcements in order to infer changes in policy reaction functions and foreign exchange microstructure, including the speed of market reaction to news and how order flow helps impound public and private information into prices. These studies have often been disconnected, however, and this article critically reviews and evaluates the literature on announcement effects on foreign exchange returns.