Search Results
Briefing
Noise Bargaining: A New Perspective on Single Proposers, Negotiation and Delays
Many real-world bargaining problems feature a single proposer and delays in reaching agreements.Most existing bargaining models feature alternating proposers with immediate settlement.Noise bargaining — a new approach discussed in my recent working paper, co-authored with Pablo Guerron-Quintana — introduces a single proposer with endogenous delay.
Speech
The Path to Full Recovery
The past two months have been painful across the country. We have lost lives. We have lost tens of millions of jobs. We have lost security, connectivity and community.Multiple states are now in the process of reopening their economies. But, despite unprecedented measures by both the Fed and fiscal authorities, things won’t be returning to normal quickly. As I wrote a few weeks ago, the pace will likely be slow, as businesses and consumers adapt to a world where personal interaction creates health risks.As the United States navigates the path to recovery, I have been focusing on how much ...
Speech
Ensuring Longer-Term Growth
The national economy looked very strong in 2018. But as we enter 2019, many people are asking how long this pace of economic growth can continue.Long-term economic growth depends on the number of people working and how productive they are.With slow population growth, future growth of the labor force may depend on people currently on the sidelines of the labor market.Opportunities to grow the workforce include policies to support women’s labor force participation, workforce development and legal immigration.Productivity growth also has lagged the past decade, perhaps due in part to business ...
Speech
The Effects of Market Concentration on Suppliers
When firms get large, they acquire more bargaining power, and can exert significant pressure on their suppliers with respect to pricing, delivery time and packaging. Suppliers that don’t comply might be replaced or lose their space on a retailer’s shelves.The shift toward “private label” goods also has affected retailers’ bargaining power. Large retailers have the scale to develop and distribute their own products, which may give them leverage over national brands.These trends might help to explain how increased market concentration could coexist with quite muted inflation, ...
Working Paper
The Past and Future of U.S. Structural Change: Compositional Accounting and Forecasting
We explore the evolving significance of different production sectors within the U.S. economy since World War II and provide methods for estimating and forecasting these shifts. Using a compositional accounting approach, we find that the well-documented transition from goods to services is primarily driven by two compositional changes: 1) the rise of Intellectual Property Products (IPP) as an input producer, replacing Durable Goods almost one-for-one in terms of input shares in virtually all sectors; and 2) a shift in consumer spending from Nondurable Goods to Services. A structural model ...
Speech
Sentiment and the Real Economy
I believe our economy’s performance is driven in important ways by sentiment, that is, the outlook and beliefs of consumers and businesses.At the end of 2018, considerable uncertainty led to large drops in sentiment. We then saw weak numbers in January and February. By the end of February, uncertainty had decreased, and now the data look quite strong.In my view, sentiment has become both more important and more volatile. The result is an asymmetry in which firms are much more cautious about the downside than they are optimistic about the upside. Both consumers and firms may have a higher ...
Speech
The Outlook for Growth
The national economy looked very strong in 2018. But as we enter 2019, many people are asking how long this pace of economic growth can continue.Long-term economic growth depends on the number of people working and how productive they are.With slow population growth, future growth of the labor force may depend on people currently on the sidelines of the labor market.Opportunities to grow the workforce include policies to support women’s labor force participation, workforce development and legal immigration.Productivity growth also has lagged the past decade, perhaps due in part to business ...
Speech
To Invest in Infrastructure, Invest in People
The new administration has signaled its intent to propose an infrastructure program. That is good. We need investment in our country’s infrastructure. Our roads and bridges are long overdue for repairs. We lag behind other countries in high-speed transit and the shift to renewable energy. We have far too many schools and hospitals that need updating. And too many students in small towns and inner cities have been set back by their lack of broadband, worsening the educational disparities that existed even before the COVID-19 pandemic.Supporters of a large infrastructure bill also point to ...
Briefing
Forecasting U.S. Productivity
Trend aggregate labor productivity and TFP growth are expected to increase over the rest of the decade.The three largest subsectors of the service economy — namely professional business services; finance, insurance and real estate; and education and health care — are expected to continue growing in the medium term, and their idiosyncratic productivity is expected to play an increasingly important role in aggregate productivity.
Discussion Paper
The Impact of Tariffs on Our Region's Firms
Given recent changes in U.S. tariff policy, we asked Fifth District firms how they expected to be affected by tariff policy in March. At the time, 80 percent of respondent businesses expected to be impacted. In our May surveys, we checked in with firms and found that 72 percent of respondents made business changes in response to tariffs on imports. Firms reported taking a variety of actions. Of the firms that reported making adjustments, most have or plan to increase prices, 47 percent have canceled or delayed capital expenditures, and 41 percent have adjusted hiring plans.