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Speech
Moving toward 'normal' U.S. monetary policy: remarks at the Joint Bank Indonesia-Federal Reserve Bank of New York Central Banking Forum, Nusa Dua, Indonesia
Remarks at the Joint Bank Indonesia-Federal Reserve Bank of New York Central Banking Forum, Nusa Dua, Indonesia.
Speech
The economic outlook: the ‘new normal’ is now: remarks at The Economic Club of New York, New York City
Remarks at The Economic Club of New York, New York City.
Speech
'Normal' monetary policy in words and deeds: remarks at Columbia University, School of International and Public Affairs, New York City
Remarks at Columbia University, School of International and Public Affairs, New York City.
Discussion Paper
The R*–Labor Share Nexus
Over the past quarter century, the U.S. economy has experienced significant declines in both the labor share of income and the natural rate of interest, referred to as R*. Existing research has largely analyzed these two developments in isolation. In this post, we provide a simple model that captures the joint evolution of the labor share and R*, which we call the R*–labor share nexus. Our key finding is that structural changes affecting R* also influence the evolution of the labor share, and thereby wages and prices. This highlights a potentially important channel, absent from many ...
Speech
Remarks at the 42nd Annual Central Banking Seminar, Federal Reserve Bank of New York, New York City
Remarks at the 42nd Annual Central Banking Seminar, Federal Reserve Bank of New York, New York City.
Working Paper
Climate Policy and the Long-Run Interest Rate: Insights from a Simple Growth Model
We study the impact of climate policy on the long-run real interest rate in a tractable climate-economy model based on the work of Golosov et al. (2014). When the growth rate of the carbon tax exceeds the growth rate of the price of at least one type of fossil energy, the tax reduces the long-run growth rates of consumption and investment, pushing the interest rate up. We find that if fossil energy prices are constant, a carbon tax that grows at 3.5 percent per year decreases the long-run interest by over 50 basis points. This carbon tax growth rate achieves net zero emissions at the lowest ...
Speech
The Theory of Average Inflation Targeting
Remarks at Bank of Israel/CEPR Conference on “Inflation: Dynamics, Expectations, and Targeting” (delivered via videoconference).
Working Paper
Sequence-Space Jacobians of Life-Cycle Models
The sequence-space Jacobian (SSJ) method of Auclert et al. (2021a) has made heterogeneous-agent models far easier to solve, fueling an explosion of applications. But even SSJ strains against capacity constraints when state spaces grow very large, as in economies with overlapping generations of heterogeneous agents (HA-OLG). We show how to exploit the special properties of age—finite planning horizons and deterministic transitions between ages—to compute the Jacobians of a general class of HA-OLG models orders of magnitude faster. We provide rigorous proofs, age-specific Jacobians that ...