Search Results
Journal Article
District Digest: The Unconventional Oil and Gas Boom
Working Paper
Using the Kalman filter to smooth the shocks of a dynamic stochastic general equilibrium model
This paper shows how to use the Kalman filter (Kalman 1960) to back out the shocks of a dynamic stochastic general equilibrium model. In particular, we use the smoothing algorithm as described in Hamilton (1994) to estimate the shocks of a sticky-prices and sticky-wages model using all the information up to the end of the sample.
Journal Article
Business Dynamics in the United States and the Fifth District
Journal Article
Decomposing inflation
As U.S. core inflation measures have declined in recent years, analysts have renewed their efforts to understand inflation dynamics. A common approach to this issue is to make inferences about how price changes of major components affect the aggregate inflation rate. This article takes a more rigorous approach, calculating and plotting the precise contributions of major consumer expenditure categories to core inflation measures over time. ; This technique has distinct advantages. It highlights the underlying trends in inflation, enabling analysts to make more informed inferences about the ...
Journal Article
Post-Recession Labor Market Trends in the Fifth District
Journal Article
District digest: The Federal presence in the Fifth District
Economic trends across the region, pg. 52-55 compiled by Sonya Ravindranath Waddell
Journal Article
Transparency, expectations and forecasts
Many economists believe that a central bank?s transparency about its objectives, economic outlook, and policy changes affect the public?s views about future economic and financial conditions. In keeping with this theory, since 1994 the Federal Open Market Committee has gradually increased the transparency of its statements accompanying changes in the federal funds rate target. ; This article investigates whether private agents? ability to predict the economy?s direction has improved since 1994. The analysis focuses on forecasts of macroeconomic variables such as inflation, gross domestic ...
Journal Article
Smoothing the shocks of a dynamic stochastic general equilibrium model
In some ways, the recession of 2001 and the recovery that followed it were unique: During the recession, the contraction in measured output was driven almost entirely by a retrenchment in business capital spending while consumer spending and residential investment remained positive. And the recovery was marked by moderate, uneven gross domestic product growth and job market weakness that were historically unusual. These events raise questions about the conventional wisdom on post?World War II business cycles. ; To help answer these questions, the authors use a general equilibrium model with ...
Discussion Paper
The Rural Reach of ARPA’s Development Grants in the Fifth District
The American Rescue Plan Act (ARPA), enacted in March 2021, contained economic development funding to invest in locally driven projects aimed at securing long-term regional growth. Proposals for these ARPA grants were solicited among American communities through six separate programs to address regional economic goals such as harnessing new industries, supporting workforce development, and enabling infrastructure. Through September 2022, $3 billion was ultimately awarded across 780 projects through a competitive process by the U.S. Economic Development Administration (EDA).This article ...
Briefing
Where are households in the deleveraging cycle?
The ratio of household debt to disposable personal income fell rapidly during the recession of 2007-09 as consumers defaulted on loans, paid down debt, and took out fewer loans. According to some economists, this household debt reduction ? "deleveraging" ? has constrained consumer spending, contributing to a longer, deeper recession and a slower recovery. As households strengthen their balance sheets, their ability to take on new debt to finance consumption is improving, but household debt remains elevated by historical standards, and other determinants of consumer spending remain weak.