As I noted in a previous post, monetary policy works through various channels, one of which is the “bank lending channel”. Lower policy rates, as witnessed in the past few months and shown below, should induce greater lending.
Category Archives: Federal Reserve
Credit crunch: how we got here and how to get out
Fed Chair Ben Bernanke on Tuesday offered his perspective on the appropriate response of the Fed to the ongoing turmoil in financial markets. I still think he’s overlooking a key element of what’s been happening.
What if we’d been on the gold standard?
If the U.S. had decided to go back on the gold standard in 2006, where would we be today? That’s a question my friend Randy Parker recently asked me. Here’s how we both would answer.
Macroeconomics and ARCH
That’s the topic of my most recent research paper. Reader warning: this is a bit more technical than the standard Econbrowser post, so if you’re not a user of regression analysis, this may not be up your alley.
The case for 2-1/4
The Federal Open Market Committee’s next meeting is scheduled for April 29/30, which the May fed funds futures contract currently anticipates will result in another 25-basis-point reduction in the target fed funds rate down to 2.0%. Here’s why I hope the Fed doesn’t do that.
Commodities and the Fed: answering the skeptics
Judging from some of the reactions across the blogosphere (not to mention any number of our own dear readers), maybe I should take another stab at clarifying why I see the hand of the Federal Reserve in the most recent movements in oil and commodity prices.
Why new oil price highs?
West Texas Intermediate closed today above $115/barrel. Does that reflect changes in the fundamentals of world supply and demand? My answer is no.
The G-7 Communique and the Dollar
Was this the new (reverse) “Plaza Accord”? From Bloomberg:
Central bank independence
Former Secretary of Labor Robert Reich (hat tip: Economist’s View) offered some thoughts Friday about democracy and the Federal Reserve. Both his insights and his errors are instructive.
Oil and the Great Moderation
Another interesting paper presented at the Society for Nonlinear Dynamics and Econometrics Symposium that I attended last week was by
Anton Nakov of the Bank of Spain and Andrea Pescatori of the Federal Reserve Bank of Cleveland on the role that changes in energy markets may have played in the reduction in GDP and inflation volatility observed since 1984.