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Working Paper
Two Measures of Core Inflation: A Comparison
Trimmed-mean Personal Consumption Expenditure (PCE) inflation does not clearly dominate ex-food-and-energy PCE inflation in real-time forecasting of headline PCE inflation. However, trimmed-mean inflation is the superior communications and policy tool because it is a less-biased real-time estimator of headline inflation and because it more successfully filters out headline inflation?s transitory variation, leaving only cyclical and trend components.
Journal Article
A regional perspective on the \\"Great Moderation\\"
The Great Moderation impacted job growth across nearly all regions over a fairly short period of time.
Room to Grow? Inflation and Labor Market Slack
Compared with the usual ex-food-and-energy measure, the Dallas Fed’s Trimmed Mean PCE inflation rate sends a clearer, more reliable signal about whether cyclical inflation pressures are building.
Working Paper
Monetary policy, financial stability, and the distribution of risk
In an economy in which debt obligations are fixed in nominal terms, but there are otherwise no nominal rigidities, a monetary policy that targets inflation inefficiently concentrates risk, tending to increase the financial distress that accompanies adverse real shocks. Nominal-income targeting spreads risk more evenly across borrowers and lenders, reproducing the equilibrium that one would observe if there were perfect capital markets. Empirically, inflation surprises have no independent influence on measures of financial strain once one controls for shocks to nominal GDP.
Working Paper
Real-time GDP Growth Forecasts
The authors forecast current-quarter real GDP growth using monthly data that would have been available to an analyst in real time. They demonstrate that using real-time data is of major importance both when estimating GDP forecasting models and when evaluating their performance. Moreover, the authors show that the out-of-sample forecasting performance of their model is comparable or superior to that of the Blue-Chip consensus forecast provided that more than one month of current-quarter data are available
Monetary Policy in Time of Pandemic
Some monetary policy strategies have greater potential than others to mitigate pandemic-related financial strains.
Journal Article
Rethinking the IS in IS-LM: adapting Keynesian tools to non-Keynesian economies Part 1
The IS-LM diagram was developed as a tool for analyzing Keynesian economies-economies with "sticky" prices and myopic households. In a series of two articles, Evan Koenig shows that a graphical apparatus similar to the traditional IS-LM diagram can be used to analyze economies that have optimizing, forward-looking households. In particular, an expectations-augmented variant of IS-LM analysis is fully consistent with a popular real-business-cycle model. Thus, the IS-LM diagram has wide applicability as a pedagogical device and as a framework within which to discuss policy. ; This article ...
Journal Article
Is the Fed slave to a defunct economist
Inverted Yield Curve (Nearly Always) Signals Tight Monetary Policy, Rising Unemployment
With long-term interest rates falling and short-term rates rising, there has been increasing talk of a possible yield-curve inversion and speculation about what an inversion might mean for the U.S. economy.