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Journal Article
Monetary policy and the behavior of long-term real interest rates
A time-honored description of the "monetary transmission channel" suggests that the Fed controls the federal funds rate, which affects the rates on longer-term credit market instruments, which affect the expected real (inflation-adjusted) rates on longer-term instruments, which affect real spending on interest-sensitive goods, which affects unemployment and inflation. And yet one key link in the chain, the expected real long-term interest rate, is not observable.> This article explores the link between the behavior of monetary policy and inferences about the behavior of the expected ...
Journal Article
Are we investing too little?
One of the most disappointing features of U.S. economic performance over the past 20 years has been the slowing of growth in productivity and, as a result, in real incomes. For many, the explanation can be found in the low U.S. saving rate. Since the mid 1980s, national saving has averaged just over 15 percent of GDP, compared to more than 20 percent during the 1970s. Thus, one plausible explanation for slow productivity growth, at least in recent years, could be that our low saving rate is constraining investment and thereby depriving the nation of both the tools and the technologies that ...
Journal Article
The evolution of regional manufacturing employment: gross job flows within and between firms and industries
The distribution of manufacturing employment across regions of the United States has changed tremendously over time. Shares of manufacturing employment in older, northern regions of the country have declined markedly relative to shares in the Sunbelt regions. But the shifting of manufacturing employment shares goes beyond the well known migration of population to the South and West. Manufacturing employment relative to population has also fallen in northern regions, and even the absolute number of manufacturing jobs has declined in these areas as well. ; Anecdotal evidence suggests that some ...
Journal Article
Interstate banking and the outflows of local funds
Journal Article
The soaring trade in \"nontradables.\"
In recent years international trade has flourished in a category heretofore considered largely nontradable. Services are being exchanged across national boundaries in unprecedented volumes, with growth rates exceeding those for trade in merchandise. In addition to cross-border trade, foreign direct investment and sales by foreign affiliates are also growing rapidly. The phenomenon has attracted growing attention both from impartial analysts and from government officials seeking to expand their countries' exports. ; This article examines the nature of this trade and considers which ...
Journal Article
50 years after Bretton Woods: what is the future for the international monetary system?
On March 18, 1994, the Eastern Economic Association sponsored a roundtable discussion at the Federal Reserve Bank of Boston, to examine the future of the international monetary system in light of the aims of the Bretton Woods agreement of 1944. The title of the roundtable captured the central concern of each speaker: to what extent can the ideals of the founders of the Bretton Woods system be implemented today? ; It was agreed that a return to a fixed-rate system, as envisioned by the founders of the Bretton Woods system, is not possible today given the changes in underlying economic ...
Journal Article
Interstate fiscal disparity in 1997
Readily available tax statistics tell state and local policymakers the amount and mix of revenues that their governments receive. However, these officials pose harder fiscal questions than simply how much money is flowing into their coffers and from what sources. They frequently ask, What is our state's capacity to raise revenues, regardless of how much we actually collect? To what extent do we utilize that capacity? Is our revenue capacity sufficient to finance our state's need for public services? These questions are especially salient today, given that during state fiscal year 2002 ...
Journal Article
Exchange rate determination: sorting out theory and evidence
Journal Article
Come the devolution, will states be able to respond?
Since the founding of the Republic, Americans have engaged in endless debate about the division of fiscal and regulatory responsibilities among levels of government. The controversy has often involved the concomitant question of the optimal role of government as a whole. The issue has been not only which level of government should do what, but also what government at any level should do.
Journal Article
Building an infrastructure for financial stability: an overview
Numerous conferences organized in the aftermath of the financial crisis of 1997-98 offered analyses of what went wrong in the crisis countries and prompted a number of reform proposals directed toward reducing the risk of future crises. However, now that the crisis has abated, reform appears to be much lower on most political agendas and is rarely the topic of media reports or academic inquiries. The Federal Reserve Bank of Boston's June 2000 conference "Building an Infrastructure for Financial Stability" attempted to address this deficiency. ; As conference participants presented their ...