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Second Quarter 2016

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Posted 2016-06-17

In Memoriam: Robert H. Rasche

Bob Rasche was a champion of the St. Louis Fed. He devoted his energy and imagination to cultivating an environment of public service and rigorous economic research. Bob died June 2, 2016.

Posted 2016-06-17


by James Bullard

The financial crisis of 2007-09 and its aftermath turned monetary economics and policymaking on its head and called into question many of the conventional views held before the crisis. One of the most popular and enduring views in all of monetary economics since the 1970s, and indeed since the 1940s, has been that a nominal interest rate peg is poor monetary policy and that attempts to pursue such a policy would lead to ruin.

Posted 2016-06-17

Secular Stagnation and Monetary Policy

by Lawrence H. Summers

This article is based on the author’s Homer Jones Memorial Lecture delivered at the Federal Reserve Bank of St. Louis, April 6, 2016.

Posted 2016-06-17

Market Power and Asset Contractibility in Dynamic Insurance Contracts

by Alexander K. Karaivanov and Fernando M. Martin

The authors study the roles of asset contractibility, market power, and rate of return differentials in dynamic insurance when the contracting parties have limited commitment. They define, characterize, and compute Markov-perfect risk-sharing contracts with bargaining.

Posted 2016-06-17

Student Loans Under the Risk of Youth Unemployment

by Alexander Monge-Naranjo

While most college graduates eventually find jobs that match their qualifications, the possibility of long spells of unemployment and/or underemployment—combined with ensuing difficulties in repaying student loans—may limit and even dissuade productive investments in human capital. The author explores the optimal design of student loans when young college graduates can be unemployed and reaches three main conclusions.