Found 18 article(s) for author 'Federal Reserve'

Twenty Years of Time Series Econometrics in Ten Pictures

Twenty Years of Time Series – Econometrics in Ten Pictures. James Stock, Spring 2017, Paper, “Twenty years ago, empirical macroeconomists shared some common understandings. One was that a dynamic causal effect—for example, the effect on output growth of the Federal Reserve increasing the federal funds rate—is properly conceived as the effect of a shock, that is, of an unanticipated autonomous change linked to a specific source. Following Sims (1980), the use of vector autoregressions to estimate the dynamic causal effect of shocks on economic variables was widespread.Link

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Interest Rate Conundrums in the Twenty-First Century

Interest Rate Conundrums in the Twenty-First Century. Samuel Hanson, March 31, 2017, Paper, “A large literature argues that long-term interest rates appear to react far more to high-frequency (for example, daily or monthly) movements in short-term interest rates than is predicted by the standard expectations hypothesis. We find that, since 2000, such high-frequency “excess sensitivity” remains evident in U.S. data and has, if anything, grown stronger. By contrast, the positive association between low-frequency changes (such as those seen at a six- or twelve-month horizon) in short- and long-term interest rates, which was quite strong before 2000, has weakened substantially in recent years. As a result, “conundrums”— defined as six- or twelve-month periods in which short rates and long rates move in opposite directions—have become far more common since 2000.Link

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What Could Go Wrong in America?

What Could Go Wrong in America? Martin Feldstein, October 16, 2016, Opinion, “Although the United States economy is in good shape – with essentially full employment and an inflation rate close to 2% – a world of uncertainty makes it worthwhile to consider what could go wrong in the year ahead. After all, if the US economy runs into serious trouble, there will be adverse consequences for Europe, Japan, and many other countries.Link

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Is the Fed Playing Politics?

Is the Fed Playing Politics? Kenneth Rogoff, October 3, 2016, Opinion, “In his recent debate with his opponent Hillary Clinton, Republican presidential candidate Donald Trump pressed his claim that US Federal Reserve Chair Janet Yellen is politically motivated. The Fed, Trump claims, is applying overdoses of monetary stimulus to hypnotize voters into believing that economic recovery is underway.Link

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The Fed’s Stress Tests Need to Be Transparent

The Fed’s Stress Tests Need to Be Transparent. Hal Scott, September 16, 2016, Opinion, “The stress tests that big American banks face each year are about to get more stressful. The Fed is planning to substantially increase—by an average of 57%, we calculate—the regulatory capital that the eight largest banks in the U.S. need to pass the annual tests.  Had these expected higher capital levels been in effect this year, it is likely that the country’s four largest banks ( J.P. Morgan Chase, Bank of America, Wells Fargo and Citigroup) all would have failed the test. As a consequence, they would have been barred from remitting more profits to their shareholders.Link

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The Fed thinks it can fight the next recession. It shouldn’t be so sure.

The Fed thinks it can fight the next recession. It shouldn’t be so sure. Lawrence Summers, September 8, 2016, Opinion, “As I argued in the first blog post in this series last week, I was disappointed in what came out of The Federal Reserve’s annual conference in Jackson Hole, Wyo., for three reasons. The first reason, as I wrote in that post, was that the Federal Reserve should have signaled a desire to exceed its 2 percent inflation target during periods of protracted recovery and low unemployment, and in this context to signal that a rate increase was off the table for September and quite likely the rest of the year. Friday’s employment report further strengthens the case for delay both by adding to the evidence on the absence of inflation pressures and by suggesting a less robust economy than most expected.Link

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The Curse of Cash

The Curse of Cash. Kenneth Rogoff, 2016, Book, “The world is drowning in cash—and it’s making us poorer and less safe. In The Curse of Cash, Kenneth Rogoff, one of the world’s leading economists, makes a persuasive and fascinating case for an idea that until recently would have seemed outlandish: getting rid of most paper money.  Even as people in advanced economies are using less paper money, there is more cash in circulation—a record $1.4 trillion in U.S. dollars alone, or $4,200 for every American, mostly in $100 bills. And the United States is hardly exceptional. So what is all that cash being used for? The answer is simple: a large part is feeding tax evasion, corruption, terrorism, the drug trade, human trafficking, and the rest of a massive global underground economy.Link

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The Fed Shouldn’t Expect People to Trust its Current Approach to the Economy

The Fed Shouldn’t Expect People to Trust its Current Approach to the Economy. Lawrence Summers, August 29, 2016, Opinion, “I had high hopes for the Federal Reserve’s annual conference in Jackson Hole, Wyo. The conference was billed as a forum that would look at new approaches to the conduct of monetary policy — something that I have been urging as necessary, given secular stagnation risks and the sharp decline in the apparent neutral rate of interest. And Chair Janet Yellen’s speech in a relatively academic setting provided an opportunity to signal that the Fed recognized that new realities required new approaches.Link

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