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Discussion Paper
Distributional Consequences of Trade for U.S. Consumers: Estimating Group-Specific Import Price Inflation
This note highlights the results of our project constructing import price indexes across different U.S. income deciles over the years 1998 to 2014.
Discussion Paper
Drivers of Inflation Compensation: Evidence from Inflation Swaps in Advanced Economies
In this note, we provide a comparative analysis of inflation swaps for three advanced economies: the United States, the euro area, and the United Kingdom. We consider empirical proxies for energy prices, economic activity, exchange rates, and risky asset prices as potential drivers of inflation expectations and risk premiums in a regression framework.
Discussion Paper
Understanding Global Volatility
In this note, we identify a global component of equity option-implied volatilities and address two questions: What are its fundamental drivers? And, given these drivers, are recent levels of volatility unexpectedly low?
Discussion Paper
Milton Friedman and Data Adjustment
When empirically modelling the U.S. demand for money, Milton Friedman more than doubled the observed initial stock of money to account for a "changing degree of financial sophistication" in the United States relative to the United Kingdom. This note discusses effects of this adjustment on Friedman's empirical models. His data adjustment dramatically reduced apparent movements in the velocity of circulation of money, and it adversely affected the constancy and fit of his estimated money demand models.
Discussion Paper
Should We Be Concerned Again About U.S. Current Account Sustainability?
In this note, we compare the present situation to that prevailing in the mid-2000s, when concerns about the NIIP and the current account were at the forefront, and we examine the prospects for U.S. external sustainability going forward.
Discussion Paper
"Low-For-Long" Interest Rates and Portfolio Shifts in Advanced Foreign Economies
For the past several years, interest rates in many advanced economies have been at historic lows. Although low interest rates have helped support recovery in these economies, persistently low rates have also raised concerns about increased incentives for risk-taking by investors to achieve higher yields.
Discussion Paper
How Do Liquidity Conditions Affect U.S. Bank Lending?
The recent financial crisis underscored the importance of understanding how liquidity conditions for banks (or other financial institutions) influence the banks' lending to domestic and foreign customers.
Discussion Paper
China's Footprints on the Global Economy : Remarks Delivered at the Second IMF and Federal Reserve Bank of Atlanta Research Workshop on the Chinese Economy
This note explores some key aspects of China’s economic rise and the spillovers to the rest of the world that this rise has created. It then examines, using the Federal Reserve Board’s large-scale global model (SIGMA), the potential consequences for the global economy were China’s economy to slow sharply. Although the probability of such an event is low, a sharp slowdown of Chinese economic growth could have significant consequences for the global economy.
Discussion Paper
The Dollar in the U.S. International Transactions (USIT) Model
The dollar's 20 percent climb against a broad index of foreign currencies since the middle of 2014 has led to an increased focus on how dollar fluctuations affect the U.S. economy. This note provides further detail on the structure and estimation of the trade block of the USIT model. In the context of the model, we present the estimated effect of a 10 percent dollar appreciation on U.S. trade flows and trade prices. We conclude with an assessment of the model's performance since the dollar began its steep appreciation in the summer of 2014.
Discussion Paper
Monitoring the World Economy: A Global Conditions Index
In this note we present a Global Conditions Index (GCI), a real-time measure of the health of the global economy constructed using a small set of world economic variables.