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Journal Article
Stable prices, stable economy: keeping inflation in check must be No. 1 goal of monetary policymakers
Conventional wisdom holds that if policymakers are too focused on controlling inflation, then employment, output growth and financial stability will suffer. But the conventional wisdom is wrong, according to the data.
Journal Article
Big banks in small places: are community banks being driven out of rural markets?
The shares of total U.S. banking assets and deposits held by the very largest banking organizations have increased markedly over the past 25 years, while the shares held by small ?community? banks have declined. Advances in information technology may have reduced the advantages of small scale, close proximity, and local ties that traditionally have given small, community-focused banks a competitive advantage in lending to small businesses and other ?informationally opaque? borrowers. This article examines trends in deposit shares of banks of different sizes in rural U.S. counties. If the ...
Journal Article
The FOMC in 1998: can it get any better than this?
The U.S. economy turned in another solid performance during 1998, with faster real growth and employment gains, and lower inflation, than many observers had expected. From the standpoint of monetary policy, the year's pivotal point occurred in August, when the Russian government defaulted on its domestic debt and devalued the ruble. Before August, policymakers focused on whether an explicit policy tightening would be needed to slow domestic demand enough to prevent an increase in inflation. Financial market upset triggered by the Russian government's actions, coupled with ongoing concern ...
Journal Article
The real population problem: too few working, too many retired
It's not the total number of people that should be causing worry, but the number of retired people relative to those still working. Across the world, the ranks of retirees are swelling and the ranks of those working - and paying taxes to support retirees - are not keeping up.
Journal Article
Changing the rules: state mortgage foreclosure moratoria during the Great Depression
Many U.S. states imposed temporary moratoria on farm and nonfarm residential mortgage foreclosures during the Great Depression. This article describes the conditions that led some states to impose these moratoria and other mortgage relief during the Depression and discusses the economic effects. Moratoria were more common in states with large farm populations (as a percentage of total state population) and high farm mortgage foreclosure rates, although nonfarm mortgage distress appears to help explain why a few states with relatively low farm foreclosure rates also imposed moratoria. The ...
Working Paper
Did Doubling Reserve Requirements Cause the 1937-38 Recession? New Evidence on the Impact of Reserve Requirements on Bank Reserve Demand and Lending
In 1936-37, the Federal Reserve doubled member banks' reserve requirements. Friedman and Schwartz (1963) famously argued that the doubling increased reserve demand and forced the money supply to contract, which they argued caused the recession of 1937-38. Using a new database on individual banks, we show that higher reserve requirements did not generally increase banks' reserve demand or contract lending because reserve requirements were not binding for most banks. Aggregate effects on credit supply from reserve requirement increases were therefore economically small and statistically zero.
Working Paper
A New Daily Federal Funds Rate Series and History of the Federal Funds Market, 1928-1954
This article describes the origins and development of the federal funds market from its inception in the 1920s to the early 1950s. We present a newly digitized daily data series on the federal funds rate that covers the period from April 1928 through June 1954. We compare the behavior of the funds rate with other money market interest rates and the Federal Reserve discount rate. Our federal funds rate series will enhance the ability of researchers to study an eventful period in U.S. financial history and to better understand how monetary policy was transmitted to banking and financial ...
Journal Article
How well do initial claims forecast employment growth over the business cycle and over time?
Initial claims may now be useful for forecasting employment growth during periods of increasing economic activity.>
Journal Article
Has the bond market forgotten oil?