Reports

“We derive measures of the stances of monetary and fiscal policy within the framework of an empirically plausible extension of the basic New Keynesian model, and jointly estimate them for the United States using a closed form multivariate linear filter. Our theoretical analysis reveals that the neutral stance of monetary policy — as measured by…

“Although inflation has been atypically high during the recovery from the pandemic, the contribution of corporate profits to inflation has not been unprecedented. Our findings support the theory that firms set prices based on current as well as future production costs, which explains the contribution of corporate profits to inflation both before and after the…

“The Congressional Budget Office projects that if the debt limit remains unchanged, there is a significant risk that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations. The extent to which the Treasury will be able to fund the government’s ongoing…

“GDP growth slowed to a moderate pace in Q1. Consumption and government spending were substantial contributors to growth. Fixed investment spending was flat while inventory investment was a large drag.” “Consumer spending moderated in March and the personal saving rate increased. Manufacturing activity has stalled after retreating at the end of last year. The housing market appears…

“The collapse of Silicon Valley Bank (SVB) and Signature Bank (SB) has raised questions about the fragility of the banking system. One striking aspect of these bank failures is how the runs that preceded them reflect risks and trade-offs that bankers and regulators have grappled with for many years. In this post, we highlight how…

“The methodology in this note shows that over the period including the recent rise in inflation and subsequent monetary policy tightening, asset prices have moved in such a way as to, on average, benefit middle-aged people at the expense of retirees. While we think these results are useful to understand the heterogeneous effects of monetary…

“Roosevelt’s successful, if incomplete, reflation carries lessons for policymakers today. First, fiscal expansions always have two effects: Keynesian hydraulics and wealth effects from government debt. Wealth effects may be large, depending on expectations of future fiscal actions. Analyses that neglect these may underpredict the stimulative impacts and misguide policy responses to the resulting inflation.” “A…

”Our results imply that ideas, rather than simply getting harder to find, in fact require more sophisticated lab equipment to be found (or implemented). This is a scarcity that can only be overcome by increased accumulation and development of R&D capital, not necessarily just by employing more R&D staff. Furthermore, because investments in R&D equipment…

“Overall, this study suggests that casino development was a rather successful economic development strategy for Atlantic County. Back in the 1970s, the county held relatively low employment, wage, and education levels. When Atlantic City regained its appeal as a top tourist destination in the 1980s, the county’s fortunes blossomed. The casinos brought in a high…