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Why Has Durable Goods Spending Been So Strong during the COVID-19 Pandemic?
Consumers increased their purchases of durable goods notably during the COVID-19 pandemic. The pandemic may have lifted the demand for durable goods directly, by shifting consumer preferences away from services toward a variety of durable goods. It may also have stimulated spending on durable goods indirectly, by prompting a strong fiscal policy response that raised disposable income. We estimate the historical relationship between durable goods spending and income and find that income gains in 2020 accounted for about half of the increase in durable goods spending, indicating that the direct ...
A Growth-Augmented Phillips Curve
Empirical studies find that the link between inflation and economic slack has weakened in recent decades, a development that could hamper monetary policymakers as they aim to achieve their inflation objective. We show that while the role of economic slack has diminished, economic growth has become a significant driver of inflation dynamics, indicating that the link between inflation and economic activity remains but the relevant gauge of activity has changed. The new evidence suggests that the COVID-19-related recession could induce substantial disinflationary pressure.
What Determines the Success of Housing Mobility Programs?
There is currently interest in crafting public housing policy that combats, rather than contributes to, the residential segregation in American cities. One such policy is the Housing Mobility Program (HMP), which aims to help people move from disinvested neighborhoods to ones with more opportunities. This paper studies how design features influence the success of HMPs in reducing racial segregation. We find that the choice of neighborhood opportunity index used to define the opportunity areas to which participants are encouraged to move has limited influence on HMP success. In contrast, we ...
Measuring Deaths from COVID-19
Medical data are new to the analyses and deliberations of Federal Reserve monetary policymakers, but such data are now of primary importance to policymakers who need to understand the virus’s trajectory to assess economic conditions and address the virus’s impacts on the economy. The number of deaths caused by COVID-19 is one key metric that is often referred to, but as with other COVID metrics, it is a challenge to measure accurately. We discuss the issues involved in measuring COVID-19 deaths and argue that the change in the number of directly observed COVID-19 deaths is the most ...