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Fourth Quarter 2015

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Posted 2015-12-07

Economics and Politics in Selecting Federal Reserve Cities: Why Missouri Has Two Reserve Banks

by David C. Wheelock

Missouri is the only state with two Federal Reserve Banks, and it has long been alleged that political influence explains why Reserve Banks were placed in both St. Louis and Kansas City.

Posted 2015-12-07

Microfoundations of Money: Why They Matter

by Christopher J. Waller

What is the value of having microfoundations for monetary exchange in a macro model? In this article, the author attempts to answer this question by listing what he considers the major accomplishments of the field.

Posted 2015-12-07

How Effective Is Central Bank Forward Guidance?

by Clemens J.M. Kool and Daniel L. Thornton

This article investigates the effectiveness of forward guidance for the central banks of New Zealand, Norway, Sweden, and the United States. The authors test whether forward guidance improved market participants’ ability to forecast future short-term and long-term rates relative to several benchmarks.

Posted 2015-12-07

Price Equalization Does Not Imply Free Trade

by Piyusha Mutreja, B. Ravikumar, Raymond Riezman, and Michael J. Sposi

In this article, the authors demonstrate the possibility of price equalization in a two-country world with barriers to international trade.