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Working Paper
Does money matter in inflation forecasting?
This paper provides the most fully comprehensive evidence to date on whether or not monetary aggregates are valuable for forecasting US inflation in the early to mid 2000s. We explore a wide range of different definitions of money, including different methods of aggregation and different collections of included monetary assets. In our forecasting experiment we use two non-linear techniques, namely, recurrent neural networks and kernel recursive least squares regression - techniques that are new to macroeconomics. Recurrent neural networks operate with potentially unbounded input memory, while ...
Journal Article
How positive are recent employment and labor market trends?
Assessing the state of the economy requires estimates of trends in employment and the labor force. Large monthly fluctuations make it difficult to infer these from monthly data.
Journal Article
The first U.S. quantitative easing: the 1930s
During 1932, with congressional support, the Fed purchased approximately $1 billion in Treasury securities.
Journal Article
A comprehensive revision of the U.S. monetary services (divisia) indexes
The authors introduce a comprehensive revision of the Divisia monetary aggregates for the United States published by the Federal Reserve Bank of St. Louis, referred to as the Monetary Services Indexes (MSI). These revised MSI are available at five levels of aggregation, including a new broad level of aggregation that includes all of the assets currently reported on the Federal Reserve?s H.6 statistical release. Several aspects of the new MSI differ from those previously published. One such change is that the checkable and savings deposit components of the MSI are now adjusted for the effects ...
Journal Article
Inflation's economic cost: how large? how certain?
Central bankers believe that low inflation and long-term economic growth go hand in hand. The evidence about the costs of inflation, however, is not as clear-cut.
Journal Article
A closer look: assistance programs in the wake of the crisis
An unprecedented amount of aid was extended by the Treasury, Fed and FDIC to companies, agencies and individuals. This aid was necessary and, in many cases, will return a profit to taxpayers.
Working Paper
Handicapping currency design: counterfeit deterrence and visual accessibility in the United States and abroad
Despite the increasing use of electronic payments, currency retains an important role in the payments system of every country. Two aspects of currency usage drive currency design worldwide: deterring counterfeiting and making paper currency accessible to the visually impaired. Further, among the world's currencies, only U.S. banknotes are widely owned and used in transactions outside their country of issue (although the euro also has some external circulation). In this article, we compare and contrast major currencies and their design features. We conclude that the designs of the two most ...
Working Paper
Monetary aggregation theory and statistical index numbers
This paper is the first of two from the Monetary Services Indices (MSI) Project at the Federal Reserve Bank of St. Louis. The second paper, Working Paper 96-008B, summarizes the methodology, construction and data sources for the an extensive new database of monetary services indices, often referred to as Divisia monetary aggregates, for the United States. This paper surveys the microeconomic theory of the aggregation of monetary assets, bringing together results that are not otherwise readily available in a single source. In addition to indices of the flow of monetary services, the Project's ...
Journal Article
Japan as a role model?
Some analysts, noting Japan's continued slow deflation, assert that Japan is trapped in a slow-growth, deflationary equilibrium. Former Governor Shirakawa argued that Japan had "gotten out"?at least when judged by the growth of real GDP.>