Search Results
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.
Speech
The Theory of Average Inflation Targeting
Remarks at Bank of Israel/CEPR Conference on “Inflation: Dynamics, Expectations, and Targeting” (delivered via videoconference).
Speech
The Longer-Run Framework: A Look Ahead
Remarks at the Hoover Institution Monetary Policy Virtual Series: The Road Ahead for Central Banks (delivered via videoconference).
Working Paper
The Rising Cost of Climate Change: Evidence from the Bond Market
The level of the social discount rate (SDR) is a crucial factor for evaluating the costs ofclimate change. We demonstrate that the equilibrium or steady-state real interest rate isthe fundamental anchor for market-based SDRs. Much recent research has pointed to adecrease in the equilibrium real interest rate since the 1990s. Using new estimates of thisdecline, we document a pronounced downward shift in the entire term structure of SDRsin recent decades. This lower new normal for interest rates and SDRs has substantiallyboosted the estimated economic loss from climate change and the social ...
Speech
Measuring the Natural Rate of Interest: Past, Present, and Future
Remarks at the Thomas Laubach Research Conference, Board of Governors of the Federal Reserve System, Washington, DC.
Working Paper
Accounting for Low Long-Term Interest Rates: Evidence from Canada
In recent decades, long-term interest rates around the world have fallen to historic lows. We examine this decline using a dynamic term structure model of Canadian nominal and real yields with adjustments for term, liquidity, and inflation risk premiums. Canada provides a useful case study that has been little examined despite its established indexed debt market, negligible distortions from monetary quantitative easing or the zero lower bound, and no sovereign credit risk. We find that since 2000, the steady-state real interest rate has fallen by more than 2 percentage points, long-term ...
Speech
Why Are You (Y* R* U*)
Remarks at Hofstra University's Graduate Commencement, Hofstra University, Hempstead, New York.
Speech
When the Facts Change…: remarks at the 9th High-Level Conference on the International Monetary System, Zürich, Switzerland
Remarks at the 9th High-Level Conference on the International Monetary System, Zrich, Switzerland.
Discussion Paper
The Post-Pandemic r*
The debate about the natural rate of interest, or r*, sometimes overlooks the point that there is an entire term structure of r* measures, with short-run estimates capturing current economic conditions and long-run estimates capturing more secular factors. The whole term structure of r* matters for policy: shorter run measures are relevant for gauging how restrictive or expansionary current policy is, while longer run measures are relevant when assessing terminal rates. This two-post series covers the evolution of both in the aftermath of the pandemic, with today’s post focusing especially ...
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 ...