Search Results
Journal Article
Developments in Household Liabilities Since the 1990s
The ratio of household liabilities to income increased from the mid 1990s to 2010, driven by an increase in the supply of loans that outpaced loan demand.
Journal Article
Inflation Uncertainty among Eighth District Households
Survey data suggest that uncertainty about future inflation among Eighth District households rose during periods of significant change in monetary policy.
Monetary Policy Surprises and Inflation Expectations
The private sector may slightly underestimate the short-term impact of monetary policy surprises on inflation but may predict longer-term effects fairly well.
Which Households Are Most Exposed to the Inflation “Tax”?
The federal government benefits from unexpected bouts of inflation since the real value of its debt falls. However, this also hurts its debtholders.
Working Paper
Nominal Maturity Mismatch and the Liquidity Cost of Inflation
We document a liquidity channel through which unexpected inflation generates substantial welfare losses. Households hold nominal liabilities with longer duration than their nominal assets. Due to this mismatch, losses from unexpected inflation concentrate over short horizons while gains accumulate over the long run, harming liquidity-constrained households who cannot borrow against future gains. The 2021–2022 inflation shock caused welfare losses valued at 1.1% of lifetime wealth for the lower half of the wealth distribution—equivalent in dollar terms to 47% of annual consumption. More ...
How Much Are We “Taxed” by Surprise Inflation?
When inflation surprises to the upside, borrowers pay back less in real terms. And Uncle Sam is America’s biggest borrower.
Working Paper
Attention and a Paradox of Uncertainty
I show that macroeconomic uncertainty during recessions can arise from people paying more attention to aggregate events. When information is dispersed, people's attempts to acquire more information can lead to higher aggregate volatility, forecast dispersion, and uncertainty about aggregate output. Information rigidity is reduced, consistent with evidence in forecast surveys, and distinct from the prediction of exogenous volatility shocks. When the model is calibrated to U.S. data, endogenous attention accounts for half of the observed fluctuations in volatility, forecast dispersion, and ...
Which U.S. Households Have Credit Card Debt?
Households carrying credit card balances tend to be middle income, but the ratio of credit card debt to income is highest among those who earn the least.
How Does Human Capital Affect Wealth Inequality?
Accounting for human capital can change the distribution of wealth and some common measures of wealth inequality.
Working Paper
Attention and Fluctuations in Macroeconomic Uncertainty
This paper studies a dispersed information economy in which agents can exert costly attention to learn about an unknown aggregate state of the economy. Under certain conditions, attention and four measures of uncertainty are countercyclical: Agents pay more attention when they expect the economy to be in a bad state, and their reaction generates higher (i) aggregate output volatility, (ii) cross-sectional output dispersion, (iii) forecast dispersion about aggregate output, and (iv) subjective uncertainty about aggregate output faced by each agent. All these phenomena are prominent features of ...