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Dallas Fed Mobility and Engagement Index Gives Insight into COVID-19’s Economic Impact
To gain insight into the economic impact of the pandemic, we developed an index of mobility and engagement, based on geolocation data collected from a large sample of mobile devices.
Working Paper
Equity Regulation and U.S. Venture Capital Investment
There is a growing consensus that the long-run per capita growth rate of the U.S. economy has drifted lower since the early 2000s, consistent with a perceived slowdown in business dynamism. One factor that may have contributed to this is a downshift in venture capital investment and its failure to recover in line with stock prices, as pre-2003 patterns would suggest. Critics have argued that this is associated with the increased regulatory burden for publically traded firms to comply with the Sarbanes-Oxley Act of 2002 (SOX). There is inconclusive evidence of SOX deterring firms from becoming ...
Changes in Labor Force Participation Help Explain Recent Job Gains
The U.S. labor force participation rate declined following the Great Recession to a low of 62.3 percent in 2015.
Journal Article
Is rising unemployment an early warning of state-level recession?
Based on experience with national unemployment, analysts have viewed sharply higher state joblessness as signaling possible further deterioration. However, analyses indicate increasing state-level unemployment by itself does not indicate a recession, and that applying rule-of-thumb properties regarding recession to state economies is misguided.
Consumers’ and Economists’ Differing Inflation Views Can Complicate Policymaking
Economists and consumers likely think of different concepts when they consider inflation. Economists typically focus on the underlying trend that monetary policy can steer. U.S. consumers appear to think instead about unpredictable changes in prices most relevant to their regular decision-making.
The Production Process Drives Fluctuations in Output and Uncertainty
If economic developments drive most of the changes in uncertainty—rather than the reverse—then the direct effect of a change in uncertainty on economic activity is much smaller than previous research has shown.
Discussion Paper
How bad was it? The costs and consequences of the 2007–09 financial crisis
The 2007?09 financial crisis was associated with a huge loss of economic output and financial wealth, psychological consequences and skill atrophy from extended unemployment, an increase in government intervention, and other significant costs. Assuming the financial crisis is to blame for these associated ills, an estimate of its cost is needed to weigh against the cost of policies intended to prevent similar episodes. We conservatively estimate that 40 to 90 percent of one year's output ($6 trillion to $14 trillion, the equivalent of $50,000 to $120,000 for every U.S. household) was foregone ...
Average Inflation over the Pandemic Avoids 'Base-Effect' Distortions
Since the start of the COVID-19 pandemic early last year, the nation has seen enormous swings in consumer prices, with extraordinary declines last spring giving way to similarly eye-popping increases as the economy has reopened.
Nominal GDP Outlook Suggests It's Time to End Monetary Accommodation
We argue that the policy response to COVID-19 has been broadly on track to date but that continued monetary accommodation (lowering interest rates or purchasing assets) risks fueling excessive inflation.
Working Paper
The Zero Lower Bound and Estimation Accuracy
During the Great Recession, many central banks lowered their policy rate to its zero lower bound (ZLB), creating a kink in the policy rule and calling into question linear estimation methods. There are two promising alternatives: estimate a fully nonlinear model that accounts for precautionary savings effects of the ZLB or a piecewise linear model that is much faster but ignores the precautionary savings effects. Repeated estimation with artificial datasets reveals some advantages of the nonlinear model, but they are not large enough to justify the longer estimation time, regardless of the ...