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Discussion Paper
Emerging Market Nonfinancial Corporate Debt : How Concerned Should We Be?
Nonfinancial corporate (NFC) debt in emerging market economies (EMEs) has tripled since the global financial crisis (GFC), reaching roughly $25 trillion, or 112 percent of GDP, in mid-2016. In this note, we assess corporate vulnerabilities by looking at two common metrics related to debt-servicing capacity: leverage (the ratio of debt to equity), and the interest coverage ratio (the ratio of earnings to interest expense).
Discussion Paper
Measuring Cross Country Monetary Policy Uncertainty
In previous work, we constructed a news-based index of U.S. monetary policy uncertainty (MPU) that captures the degree of uncertainty the public perceives about Federal Reserve policy actions and their consequences. In this note, we extend that work to Canada, the Euro Area, Japan, and United Kingdom.
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
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
Does Automation Drive the Labor Market?
In this note we question the emerging view that automation is a primary driver of wage and employment outcomes in labor markets.
Discussion Paper
Constructing a Dictionary for Financial Stability
In this note, we explain in detail how we made word-level choices in our dictionary. In the note, we also consolidate our lessons from this process into a framework for thinking about dictionary construction.
Discussion Paper
The Relationship Between Oil Prices and Inflation Compensation
In this note, we provide new empirical evidence supporting this conjecture that changes in the outlook for global economic activity explain the co-movement between oil prices and inflation compensation. In particular, we present an empirical strategy to identify changes in oil prices that are a response to economic activity (demand-induced) and changes in oil prices that are responding to oil-specific developments (supply-induced). Our main finding is that demand-induced oil price declines can explain most of the move in inflation compensation. As a consequence, economists would do well to ...
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
Emerging Market Capital Flows and U.S. Monetary Policy
Accordingly, in this note we analyze the drivers of EME capital flows, focusing in particular on the role of U.S. monetary policy and other potential factors in the decline in capital flows to EMEs since 2010.
Discussion Paper
Potential Output and Recessions: Are We Fooling Ourselves?
The economic collapse in the wake of the global financial crises (GFC) and the weaker-than-expected recovery in many countries have led to questions about the impact of severe downturns on economic potential.