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Discussion Paper
Winners and losers from recent asset price changes
Asset prices and interest rates have changed dramatically and unexpectedly over the last two years as the Federal Reserve has raised its policy rate to combat higher inflation. In this note, we clarify the redistributive effects of these asset price changes in terms of welfare, which contrast sharply with those of wealth. Figure 1 depicts changes in the paths of six macroeconomic aggregates in the February 2023 CBO projection relative to their paths in the July 2021 projection.
Discussion Paper
Winners and losers from recent asset price changes
Asset prices and interest rates have changed dramatically and unexpectedly over the last two years as the Federal Reserve has raised its policy rate to combat higher inflation. In this note, we clarify the redistributive effects of these asset price changes in terms of welfare, which contrast sharply with those of wealth. Figure 1 depicts changes in the paths of six macroeconomic aggregates in the February 2023 CBO projection relative to their paths in the July 2021 projection.
Discussion Paper
Winners and losers from recent asset price changes
Asset prices and interest rates have changed dramatically and unexpectedly over the last two years as the Federal Reserve has raised its policy rate to combat higher inflation. In this note, we clarify the redistributive effects of these asset price changes in terms of welfare, which contrast sharply with those of wealth. Figure 1 depicts changes in the paths of six macroeconomic aggregates in the February 2023 CBO projection relative to their paths in the July 2021 projection.
Discussion Paper
Winners and losers from recent asset price changes
Asset prices and interest rates have changed dramatically and unexpectedly over the last two years as the Federal Reserve has raised its policy rate to combat higher inflation. In this note, we clarify the redistributive effects of these asset price changes in terms of welfare, which contrast sharply with those of wealth. Figure 1 depicts changes in the paths of six macroeconomic aggregates in the February 2023 CBO projection relative to their paths in the July 2021 projection.
Discussion Paper
Winners and losers from recent asset price changes
Asset prices and interest rates have changed dramatically and unexpectedly over the last two years as the Federal Reserve has raised its policy rate to combat higher inflation. In this note, we clarify the redistributive effects of these asset price changes in terms of welfare, which contrast sharply with those of wealth. Figure 1 depicts changes in the paths of six macroeconomic aggregates in the February 2023 CBO projection relative to their paths in the July 2021 projection.
Discussion Paper
Winners and losers from recent asset price changes
Asset prices and interest rates have changed dramatically and unexpectedly over the last two years as the Federal Reserve has raised its policy rate to combat higher inflation. In this note, we clarify the redistributive effects of these asset price changes in terms of welfare, which contrast sharply with those of wealth. Figure 1 depicts changes in the paths of six macroeconomic aggregates in the February 2023 CBO projection relative to their paths in the July 2021 projection.
Working Paper
Welfare and Spending Effects of Consumption Stimulus Policies
Using a heterogeneous agent model calibrated to match measured spending dynamics over four years following an income shock (Fagereng, Holm, and Natvik (2021)), we assess the effectiveness of three fiscal stimulus policies employed during recent recessions. Unemployment insurance (UI) extensions are the clear “bang for the buck” winner, especially when effectiveness is measured in utility terms. Stimulus checks are second best and have the advantage (over UI) of being scalable to any desired size. A temporary (two-year) cut in the rate of wage taxation is considerably less effective than ...
Discussion Paper
Winners and losers from recent asset price changes
Asset prices and interest rates have changed dramatically and unexpectedly over the last two years as the Federal Reserve has raised its policy rate to combat higher inflation. In this note, we clarify the redistributive effects of these asset price changes in terms of welfare, which contrast sharply with those of wealth. Figure 1 depicts changes in the paths of six macroeconomic aggregates in the February 2023 CBO projection relative to their paths in the July 2021 projection.
Discussion Paper
Substitutability between Balance Sheet Reductions and Policy Rate Hikes: Some Illustrations and a Discussion
This note explores the substitutability between policy rate hikes and reductions in the size of the Federal Reserve's balance sheet for the removal of policy accommodation. We do so using a version of the FRB/US model augmented to incorporate the effects of changes in the Federal Reserve's asset holdings on term premiums.
Discussion Paper
Winners and losers from recent asset price changes
Asset prices and interest rates have changed dramatically and unexpectedly over the last two years as the Federal Reserve has raised its policy rate to combat higher inflation. In this note, we clarify the redistributive effects of these asset price changes in terms of welfare, which contrast sharply with those of wealth. Figure 1 depicts changes in the paths of six macroeconomic aggregates in the February 2023 CBO projection relative to their paths in the July 2021 projection.