Reports

“This new wave of financial innovations has broad implications for society, banking, and central banking: Digital platforms can ease entry for financial services providers, increase transactional efficiency, and widen access to and participation in the financial system. They could also decrease the use of cash and alter the U.S. dollar’s role as today’s vehicle currency.”

“The COVID-19 pandemic was a very peculiar economic shock, affecting both firms’ ability to produce and consumers’ ability to consume, as has been widely noted. In response to this shock, most governments in advanced economies injected large amounts of money into the economy. This policy was successful at boosting consumption, which, together with a relatively…

“In this article, I investigate the patterns in labor force transitions of workers who lost their jobs during the pandemic recession and in the Great Recession. I use the panel dimension of the CPS to group workers by their labor force status after four months and follow up on them one year later to see…

“Exploiting a discontinuity in the tax treatment of municipal bonds, we show that mutual funds’ exit from the market leads to substantial illiquidity and illiquidity-induced spikes in bond yield spreads. Below the threshold, mutual funds are largely absent from the price formation process, while retail investors play an increasingly important role. Our results highlight the…

“In this Letter, we analyzed the implications of an increase in the costs of transporting products across countries in a model of the U.S. economy that incorporates variation in industry concentrations across regions. This exercise is meant to capture some aspects of the global supply chain disruptions that have occurred due to COVID-19. We find…

“During the seven years before the pandemic, economic slack had a limited impact on inflation in most industrialized countries; that is, their Phillips curves were very flat. However, since the start of 2021, the Phillips curve has steepened across a broad sample of industrialized countries. Based on the statistical results from our model, we find…

Labor Markets “Employment continued to grow at a modest to moderate pace for most Districts. Only one District reported a slight decline in employment, and one other reported no change in employment levels. While some Districts noted that labor availability had increased, firms continued to report difficulty in filling open positions. Many firms hesitated to…

“We have seen that these survey measures of inflation expectations are not always reliable predictors of inflation. For example, excluding the post-COVID period of high inflation, the University of Michigan Expected Inflation Rate for one year ahead has overpredicted future inflation every month since 2012.” “However, that is not to say that these measures do…

“In the depths of the pandemic — when many stores were closed and opportunities to spend were curtailed — many households used their forced savings and pandemic fiscal support to pay down their debt. But now, debt is bouncing back as consumers borrow more to pay today’s higher prices. So, how has consumer debt trended…