Search Results
Working Paper
Max-Share Misidentification
Valid max-share identification requires necessary and sufficient conditions that are hard to satisfy in practice—the target variable's response to the target shock must be (i) orthogonal to its responses to untargeted shocks and (ii) larger than combinations of those responses. We theoretically characterize consequences of local and global violations to these conditions. In practice, the weight max-share places on an identified untargeted shock can be obtained by projecting the response to that shock on the max-share response. Empirically, the TFP news and business cycle shocks identified ...
Briefing
What Drives Business Cycles?
There is no clear pattern as to whether inflation tends to rise or fall during recessions.The apparent lack of correlation masks the fact that inflation has in fact risen and fallen with GDP over individual business cycles.The inconsistent historical patterns wash out on average but suggest policymakers should use data to discern the underlying drivers of any specific business cycle.