The Federal Reserve has increased the size of its balance sheet by a third of a trillion dollars over the last 15 weeks, returning to tools that a short while ago we thought it had abandoned. But the Fed’s current goal in these operations is quite different from what we had seen earlier.
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Category Archives: Federal Reserve
Guest Contribution: “The Role of Network Effects in the International Transmission of US Monetary Policy”
Today, we are fortunate to be able to present a guest contribution by Stéphane Dees (Banque de France and Univ. Bordeaux) and Alessandro Galesi (Banco de España). The views expressed here are those of the authors and do not necessarily reflect the views of Banque de France, Banco de España, or the Eurosystem.
Guest Contribution: “Is capital flow management effective? Evidence based on U.S. monetary policy shocks”
Ken Rogoff: “Is this the beginning of the end of central bank independence?”
Why you should attend this UW Economics JPGI talk by Kenneth Rogoff tomorrow (Wednesday) at 4:30 pm:
Guest Contribution: “Political Pressure on Central Banks”
Today we are fortunate to present a guest post by Carola Binder at the Department of Economics at Haverford College. Twitter: @cconces
Guest Contribution: “Let’s Forget about 2% Inflation”
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared in Project Syndicate on July 25th.
Economy still growing, but…
The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 2.1% annual rate in the second quarter of 2019. That’s pretty near the 2.2% average rate since the recovery from the Great Recession began in 2009:Q3.
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BdF/AMSE International Macro Workshop: Business Cycles, Uncertainty, China, Macro Policies, and Exchange Rates
Today, we are pleased to present a guest post written by Laurent Ferrara (Banque de France), Céline Poilly (AMSE) and Daniele Siena (Banque de France). The views presented represent those of the authors, and not necessarily those of the institutions the authors are affilliated with.
Judy Shelton Confuses Me (Part 2,432,671)
Fed Nominee-to-be Judy Shelton responds to her issues with government statistics (Long, Davies, WaPo):
In a series of e-mails, Shelton defended her views, saying that she remains “skeptical about the accurancy and consistency” of economic statistics because they do not always capture technological innovation accurately. She added that “we need to be sure that data used for policy-making decision is accurate and appropriate.”
However from the context of her 2015 talk (see tape, at 1:07:07) it’s pretty clear from how she responded to the question, she thought the government statistics were understating inflation. Yet her supposedly exculpatory statement regarding technological innovations is consistent with an enormous literature that addresses concerns that government price statistics overstate inflation (review, Boskin Commission; more recently in digital context, see here). In other words, I still get the impression that Dr. Shelton disbelieves the government statistics because, well, they’re government statistics, and not because of any deeply held convictions regarding hedonic adjustments for quality, etc. in the CPI or other price indices. (A Google Scholar search fails to detect any Shelton writing on quality/measurement issues and deflators and/or productivity statistics).
An interesting paper on the subject of incorporating digital products into the national accounts, by Brynjolfsson et al. (2019).
Why Drop Rates?
My answer on Marketplace yesterday was essentially “why not”. On macro grounds, with prospects for economic activity softening, a bit of insurance isn’t too crazy.