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Author:Chung, Hess T. 

Journal Article
Estimating the macroeconomic effects of the Fed’s asset purchases

An analysis shows that the Federal Reserve?s large-scale asset purchases have been effective at reducing the economic costs of the zero lower bound on interest rates. Model simulations indicate that, by 2012, the past and projected expansion of the Fed?s securities holdings since late 2008 will lower the unemployment rate by 1 percentage points relative to what it would have been absent the purchases. The asset purchases also have probably prevented the U.S. economy from falling into deflation.
FRBSF Economic Letter

Working Paper
Assessing the Change in Labor Market Conditions

This paper describes a dynamic factor model of 19 U.S. labor market indicators, covering the broad categories of unemployment and underemployment, employment, workweeks, wages, vacancies, hiring, layoffs, quits, and surveys of consumers? and businesses? perceptions. The resulting labor market conditions index (LMCI) is a useful tool for gauging the change in labor market conditions. In addition, the model provides a way to organize discussions of the signal value of different labor market indicators in situations when they might be sending diverse signals. The model takes the greatest signal ...
Working Papers (Old Series) , Paper 1438

Working Paper
Monetary Policy Options at the Effective Lower Bound : Assessing the Federal Reserve's Current Policy Toolkit

We simulate the FRB/US model and a number of statistical models to quantify some of the risks stemming from the effective lower bound (ELB) on the federal funds rate and to assess the efficacy of adjustments to the federal funds rate target, balance sheet policies, and forward guidance to provide monetary policy accommodation in the event of a recession. Over the next decade, our simulations imply a roughly 20 to 50 percent probability that the federal funds rate will be constrained by the ELB at some point. We also find that forward guidance and balance sheet polices of the kinds used in ...
Finance and Economics Discussion Series , Paper 2019-003

Working Paper
Considerations Regarding Inflation Ranges

We consider three ways that a monetary policy framework may employ a range for inflation outcomes: (1) ranges that acknowledge uncertainty about inflation outcomes (uncertainty ranges), (2) ranges that define the scope for intentional deviations of inflation from its target (operational ranges), and (3) ranges over which monetary policy will not react to inflation deviations (indifference ranges). After defining these three ranges, we highlight a number of costs and benefits associated with each. Our discussion of the indifference range is accompanied by simulations from the FRB/US model, ...
Finance and Economics Discussion Series , Paper 2020-075

Working Paper
Have we underestimated the likelihood and severity of zero lower bound events?

Before the recent recession, the consensus among researchers was that the zero lower bound (ZLB) probably would not pose a significant problem for monetary policy as long as a central bank aimed for an inflation rate of about 2 percent; some have even argued that an appreciably lower target inflation rate would pose no problems. This paper reexamines this consensus in the wake of the financial crisis, which has seen policy rates at their effective lower bound for more than two years in the United States and Japan and near zero in many other countries. We conduct our analysis using a set of ...
Working Paper Series , Paper 2011-01

Discussion Paper
Simulating the Macroeconomic Effects of Unconventional Monetary Policies

In this note, we describe a method for calculating simulation results and demonstrate the benefits of the integrated model by analyzing a policy that entails an endogenous balance sheet response.
FEDS Notes , Paper 2018-07-20

Discussion Paper
The Effects of Forward Guidance in Three Macro Models

With the federal funds rate at its effective zero lower bound since the end of 2008, much attention has been focused on estimating the effects of "unconventional" monetary policy actions, such as large-scale asset purchases or explicit forward guidance concerning the future path of the funds rate.
FEDS Notes , Paper 2015-02-26-1

Discussion Paper
Updating the Labor Market Conditions Index

Starting Monday, October 6th, we will provide updated estimates of the labor market conditions index (LMCI) every month.
FEDS Notes , Paper 2014-10-01-1

Discussion Paper
Assessing the Change in Labor Market Conditions

The U.S. labor market is large and multifaceted. Often-cited indicators, such as the unemployment rate or payroll employment, measure a particular dimension of labor market activity, and it is not uncommon for different indicators to send conflicting signals about labor market conditions.
FEDS Notes , Paper 2014-05-22

Discussion Paper
Optimal Monetary Policy in a DSGE Model with Attenuated Forward Guidance Effects

In this article, we explore the implications of attenuating the power of forward guidance for the optimal conduct of forward guidance policy in a quantitative DSGE model of the U.S. economy.
FEDS Notes , Paper 2018-10-19


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