Search Results
International factors broadly explain postpandemic inflation
The recent co-movement of inflation across countries, including the U.S., can be explained in part by global and regional factors. Policymakers, who have tended to more closely look closer to home may want to more broadly consider global events and pressures when addressing changing inflation pressures.
Working Paper
What Imports to Import Prices?
This study offers new insights into exchange rate pass-through (ERPT) using U.S. import price indexes by country-of-origin, covering two decades of monthly data. Focusing on the largest U.S. trading partners, our analysis shows that ERPT is more muted than previously estimated, with freight costs having no measurable impact on import prices and foreign production costs exerting only limited influence. We also observe significant heterogeneity in countries’ short-run responses, shaped by differences in trade composition and pricing strategies. Consistent estimates across common dynamic panel ...
Working Paper
Xtpb: The Pooled Bewley Estimator of Long Run Relationships in Dynamic Heterogeneous Panels
This paper introduces a new Stata command, xtpb, that implements the Chudik, Pesaran and Smith (2023a) Pooled Bewley (PB) estimator of long-run relationships in dynamic heterogeneous panel-data models. The PB estimator is based on the Bewley (1979) transform of the autoregressive-distributed lag model and it is applicable under a similar setting as the widely used pooled mean group (PMG) estimator of Pesaran, Shin and Smith (1999). Two bias-correction methods and a bootstrapping algorithm for more accurate small-sample inference robust to arbitrary cross-sectional dependence of errors are ...
Not all price increases are equal; pandemic-era outliers drove inflation spike
Many individual price changes make up widely used gauges of inflation. Their relative importance changes over time and may affect how consumers perceive inflation. Such perceptions can prompt households to update their inflation expectations, decreasing optimism about real economic activity.
Disparate supply-side forces gave U.S. economy an edge
The U.S. economy boasts robust growth and slowing inflation despite the highest interest rates in two decades. Such performance isn’t common globally, especially among other advanced economies, revealing crucial differences in the fundamental factors driving inflation and growth.
Journal Article
Mexico’s productivity woes limit nearshoring, growth potential
Industrial policy reform, nearshoring and a deeper Mexico–U.S. partnership could provide tailwinds for Mexican economic growth. Whether Mexico can harness the full potential of such transformative change is less clear.
Korea, Japan growth experiences suggest China’s economy to slow in next 20 years
The Chinese economy has grown at an unprecedented pace since the 1980s. However, the pace of growth is likely to slow as China’s economy matures because of its demographic structure and its increasing proximity to economic and technological frontiers.
Working Paper
The Problem of Quality Change in Historical Price Statistics: An Illustrative Example Using Baedeker Travel Guides
The problem of accurately measuring inflation in the face of constant improvement in the quality of goods is a long-standing one in economics. This paper uses a novel dataset on the prices of the travel guidebooks published by the German publishing house Baedeker between 1832 and 1944 to construct a hedonic price index for guidebooks. Comparing these indexes to the list prices of these guidebooks, we show that the failure to adjust for improvements in the quality of the guidebooks over time imparts a substantial upward bias to measured inflation. For example, for German-language guidebooks, ...