Enough on oil prices and the Fed. I know what you’ve all really been waiting for is the 2012 Econbrowser NCAA tournament challenge, where you can test your skills (and luck) at predicting the outcomes of the U.S. college men’s basketball tournament. All you have to do is go to the Econbrowser group at ESPN, do some minor registering to create a free ESPN account if you haven’t used that site before, and make your picks for the winners of each game. Just make sure you complete your entry before Thursday, because the Econbrowser group only allows predictions before the tournament begins. And be forewarned that some of the people who enter this group really know what they’re doing!
Author Archives: James_Hamilton
Sterilized quantitative easing
Jon Hilsenrath of the Wall Street Journal reported last week that Federal Reserve officials are evaluating the possibility of a measure that the journal describes as “sterilized” quantitative easing. How would this work, and what would it be intended to accomplish?
Oil prices and the U.S. economy
Here’s why I believe that the current high price of oil is not enough to derail the U.S. economic recovery.
The power of habit
Charles Duhigg has a very interesting new book called The Power of Habit: Why We Do What We Do in Life and Business.
Keystone moving forward
In a development that should not have come as a surprise to Econbrowser readers, TransCanada announced on Monday that it would proceed with the portion of the controversial Keystone pipeline expansion that would connect Cushing, Oklahoma to the Gulf of Mexico. Because this part of the project does not cross the U.S.-Canadian border, it does not require approval from the U.S. State Department.
Factors in the recent oil price increases
Crude oil prices surged last spring following disruptions in oil production from Libya, and had been drifting down during the summer and fall. But since the beginning of October, the price of West Texas Intermediate and Brent crude oil have both risen by over 30%, putting them back up near where they had been last spring. What’s changed in the world since the beginning of October?
Crude oil and gasoline prices
Crude oil prices this week reached their highest level since last April. What will that mean for U.S. consumers at the gas pump?
Work-arounds for the politics of Keystone
The Keystone Gulf Coast Expansion Project is now entering its fourth year of regulatory review, and is currently on indefinite political hold. In the mean time, the market is figuring out other alternatives.
Measuring the consequences of the zero lower bound constraint
In a period of deleveraging such as the U.S. has been going through, it is possible for the natural rate of interest to become negative. Since cash is always an option for earning at least a yield of zero, no asset should ever pay less than zero. This lower bound of zero on nominal interest rates can put a constraint on the ability of the economy to self-correct or the Fed to provide stimulus in such a situation.
The Fed still has some tools to try to reduce longer-term yields, namely large-scale asset purchases and
signaling the Fed’s future intentions. A new research paper by Federal Reserve Bank of San Francisco President John Williams and Senior Research Advisor Eric Swanson proposes a creative new approach to measuring when and to what extent the zero lower bound is a relevant constraint on interest rates of any maturity.
Send a valentine to the Fed
Have a Valentine’s message you want to send to the Fed? Justin Wolfers and Binyamin Applebaum collect some of the proposals from Twitter:
NPR’s Planet Money: You had me at QE1.
Michael McKee: The sight of you fills me with irrational exuberance.
Annalyn Censky: Our love isn’t transitory baby, it’s gonna be exceptional for an extended period.
NPR’s Planet Money: I’ll be your lover of last resort.