Of the 10yr-3mo spread.
Category Archives: Federal Reserve
The Fault Is … in Ourselves
Or more correctly, in Mr. Trump. As reported by Bloomberg, Mr. Trump has said:
“a gentleman that likes raising interest rates in the Fed, we have a gentleman that loves quantitative tightening in the Fed, we have a gentleman that likes a very strong dollar in the Fed.”
“International Spillovers of Monetary Policy: Conventional Policy vs. Quantitative Easing”
That’s the title of a fascinating new paper with important policy implications.
Continue reading14 Months, 8 Months, 16 Months
That’s the amount of time between 10 year-3 month yield curve inversions and the beginning of the subsequent NBER-dated recession (these are the three recessions in the Great Moderation period). This is shown in Figure 1.
Measuring monetary policy shocks
What are the effects on the economy when the Fed raises interest rates? This is a key question in empirical research, but is notoriously hard to answer. The reason is that when the Fed raises interest rates, it usually does so in anticipation of a stronger economy or rising inflation. If we look at what happens to inflation or output following an interest rate hike, it is impossible to distinguish the effect of the Fed’s actions from the effects of the changing fundamentals that led the Fed to act in the first place. New research by a graduate student at UCSD may have finally solved this problem.
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Guest Contribution: “Trade War is Not a Reason to Ease Money”
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 November 26th.
Origins and Challenges of a Strong Dollar
That’s the title of an op-ed appearing in Nikkei newspaper (日本経済新聞):
Corey Lewandowski: “Fed is … a rogue agency”
That’s from a remarkable op-ed in The Hill by Corey Lewandowski. He also writes:
The effectiveness of large-scale asset purchases
That’s the topic of a piece I put up at VoxEU, which draws on my comments at a recent conference at the Brookings Institution.
Guest Contribution: “International Macroeconomics in the wake of the Global Financial Crisis”
Today, we are pleased to present a guest contribution written by Laurent Ferrara (Banque de France), Ignacio Hernando (Banco de España) and Daniela Marconi (Banca d’Italia), summarizing the introductory chapter of their book International Macroeconomics in the wake of the Global Financial Crisis. The views expressed here are those solely of the author and do not reflect those of their respective institutions.
A decade after the eruption of the Global Financial Crisis (GFC), the world economy has finally returned to a more sustained pace of expansion (see Fig. 1).
Figure 1: World GDP annual growth (in %, constant prices). Source: IMF, World Economic Outlook, April 2018 and July 2018 update
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