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Searching for “Inflation Canaries” in Household Surveys
Current surveys of household inflation expectations make it challenging to identify “inflation canaries”—individuals who consistently send out early and accurate warning signals for inflation. We propose some simple changes in survey design (longer, staggered survey panels) and emphasis (focusing on changes in expectations rather than levels and highlighting particularly accurate subpopulations) that have the potential to alleviate these concerns. To demonstrate, we provide several examples using the Federal Reserve Bank of New York’s Survey of Consumer Expectations.
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What Can We Learn About the Costs and Benefits of Tariffs from a Trade Model?
In this article, we quantify the costs and benefits of tariffs based on a modern trade model. This model predicts that in the case of unilateral tariffs set by the U.S., a modest across-the-board increase in tariff rates can generate a net positive effect on consumption. This occurs when the tariff revenue collected exceeds the output losses caused by resulting distortions and higher domestic prices. The model predicts a peak net gain in consumption equivalent to 0.3% of real gross domestic product (GDP) with a 19.7% unilateral tariff increase, under the assumption that trade partners to the ...