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Journal Article
Exchange rate regimes and volatility
Journal Article
The discount window : time for reform?
For many years, the Federal Reserve's discount window has played an important role in monetary policy. Discount window borrowing helps individual depository institutions manage their reserve accounts in the presence of unexpected deposit and payments flows. Improved reserve management, in turn, helps stabilize the overnight federal funds market by reducing the volatility of short-term interest rates. Moreover, announced changes in the Federal Reserve's discount rate have often signaled important shifts in the stance of monetary policy and have frequently been associated with large changes in ...
Journal Article
Should we throw sand in the gears of financial markets?
The volatility of financial markets in recent years has led to increased concern. As trading of financial assets on organized exchanges and over-the-counter markets has grown, events such as the 1987 stock market crash and the 1992 Exchange Rate Mechanism crisis in Europe have raised fundamental questions about the role these markets play in the economy. In particular, there is concern that much of the increased trading of financial assets is of a short-term, speculative nature that adds little value to the intermediation process and in the extreme case may distort the efficient functioning ...
Journal Article
The effects of budget deficit reduction on the exchange rate
Public sector debt in the industrialized world has increased dramatically over the last 15 years. At the June 1996 Economic Summit in Lyon, France, leaders of the seven major industrialized democracies discussed the problems posed by large budget deficits and debt, as well as the potential benefits of regaining fiscal balance. The G-7 leaders agreed that while economic fundamentals in their countries are sound, investment growth, income growth, and job creation all depend on enacting credible fiscal consolidation programs and successful anti-inflationary policies.> While there is general ...
Journal Article
What is the effect of financial stress on economic activity
Despite the apparent risk that financial stress poses to the real economy, the relationship between financial stress and economic activity is complex and not well understood. The experience of the United States and other countries has shown that businesses and households often pull back on new investments and purchases in response to the tighter credit conditions and greater uncertainty caused by financial stress. Yet important gaps remain in our understanding of this critical relationship. ; One potential complication is that the relationship may change when financial stress is elevated and ...
Journal Article
Europe 1992: implications for U.S. firms
Journal Article
Economic policy for the information economy : a summary of the Bank's 2001 Economic Symposium
The economies of the industrialized countries are being reshaped by the rapid development and diffusion of advanced information and communications technologies. Access to information is unprecedented, and the ability to process and exchange information has helped businesses increase efficiency and households raise their standards of living. There has been considerable agreement as to the broad features of the emerging information economy. But there has been less consensus on the likely magnitude and significance of the economic effects or on the important policy issues raised by these ...
Journal Article
Has the dollar fallen enough?
Journal Article
Implications of recent U.S. energy trends for trade forecasts
The development of hydraulic fracturing and horizontal drilling has brought significant structural change to the energy sector, increasing energy production and decreasing net energy imports. Future changes in energy policy or technology could have even larger effects on energy exports and thus overall exports. As a result, distinguishing energy from non-energy components of trade becomes important for forecasts in both the near and longer term. Craig S. Hakkio and Jun Nie introduce models separating energy from the non-energy components of trade to examine how changes in energy production ...