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Working Paper
Surveying Business Uncertainty
We elicit subjective probability distributions from business executives about their own-firm outcomes at a one-year look-ahead horizon. In terms of question design, our key innovation is to let survey respondents freely select support points and probabilities in five-point distributions over future sales growth, employment, and investment. In terms of data collection, we develop and field a new monthly panel Survey of Business Uncertainty (SBU). The SBU began in 2014 and now covers about 1,750 firms drawn from all 50 states, every major nonfarm industry, and a range of firm sizes. We find ...
Journal Article
Why is stable money such a big deal?
What do attempts to counterfeit an enemy?s currency during wartime have in common with decisions to adopt another country?s currency during peacetime? Both are inspired by the power of a stable monetary standard and, conversely, the consequences of losing it. Both illustrate why preserving the value of the nation?s currency is a central bank?s most important responsibility.
Journal Article
Is noninflationary growth an oxymoron?
A review of the theoretical and empirical case for disinflationary economic growth, showing that, contrary to popular wisdom, it is quite possible to have a booming economy without an acceleration in the price level.
Working Paper
Inflation, personal taxes, and real output: a dynamic analysis
An examination, using the overlapping-generations approach, of how the interactions between inflation and the nominal taxation of capital income affect the cyclical behavior of the U.S. economy.
Journal Article
An ebbing tide lowers all boats: monetary policy, inflation, and social justice
An argument that attempting to alleviate the burden of unemployment on the less affluent through expansionary monetary policy may hurt the clientele it is supposed to serve if, ultimately, the policy leads to higher long-run rates of inflation.
Journal Article
A conference on liquidity, monetary policy, and financial intermediation
A summary of the fifth in a series of symposiums sponsored by the Federal Reserve Bank of Cleveland. The September 1994 meeting was dedicated to monetary policy issues and included examinations of the macroeconomic effects of price rigidity and sluggish savings decisions by households, the interaction of inflation and financial intermediation, and the "deep structural" estimation of parameters in models with money and financial intermediation.
Working Paper
Did the 2017 Tax Reform Discriminate against Blue State Voters?
The Tax Cut and Jobs Act of 2017 (TCJA) made significant changes to corporate and personal federal income taxation, including limiting the SALT (state and local property, income and sales taxes) deductibility to $10,000. States with high SALT tend to vote Democratic. This paper estimates the differential effect of the TCJA on red- and blue-state taxpayers and investigates the importance of the SALT limitation to this differential. We calculate the effect of permanent implementation of the TCJA on households using The Fiscal Analyzer: a life-cycle, consumption-smoothing program incorporating ...
Journal Article
Okun's law revisited: should we worry about low unemployment?
A review of the connection between labor resource utilization and the growth/unemployment correlation summarized by Okun's law, showing that the instability of that relationship, particularly over short time horizons, has important implications for monetary policy.
Working Paper
The efficiency and welfare effects of tax reform: are fewer tax brackets better than more?
Using the well-known dynamic fiscal policy framework pioneered by Auerbach and Kotlikoff, we examine the efficiency and welfare implications of shifting from a linear marginal tax rate structure to a discrete rate structure characterized by two regions of flat tax rates of 15 and 28 percent. For a wide range of parameter values, we find that there is no sequence of lump-sum transfers that the (model) government can feasibly implement to make the shift from the linear to the discrete structure Pareto-improving. We conclude that the worldwide trend toward replacing rate structures having many ...