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Briefing
Sentiment About Business Debt as a Leading Economic Indicator
Understanding the sources and transmission of financial distress in the economy is essential for macroeconomic stabilization policy. For example, policymakers and academics have both pointed to excesses in credit markets — including abnormally low risk premiums, misaligned incentives for risk taking, lax credit standards and excessive borrowing — as the main culprits behind the 2008-09 financial crisis.1 Since then, many questions have emerged regarding the role of credit factors in business-cycle fluctuations. Postwar data for multiple economies suggest that rapid growth in business or ...
Report
Parsing Out the Sources of Inflation
The authors have developed a statistical model that breaks down total Personal Consumption Expenditures (PCE) inflation into underlying supply and demand factors, enabling quantification of those sources of price pressures as they arise.