Economic Research and Data

1996 Economic Commentary

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Monetary Policy and Real Economic Growth top
by Owen F. Humpage
December 1996

The ability of monetary policy to influence real economic growth and employment depends on whether the public correctly anticipates the policy change and the resulting price pressures. In the long run, individuals have complete access to policy and price information, so central banks determine only the inflation rate.

Full Text 37K
Press Release3K

Combining Bank Supervision and Monetary Policy top
by Joseph G. Haubrich
November 1996

In the United States, the Federal Reserve has responsibility for both monetary policy and bank supervision. Other countries separate these functions to varying degrees. What lies behind this global diversity? Should a central bank be charged with conducting monetary policy and regulating banks, or does it make more sense — both economic and political — to keep these activities separate? The answer is not a simple yes or no. Rather, it appears that the right choice depends on a country’s prevailing conditions, including its financial system, its political environment, and the preferences of the public.

Full Text 29K
Press Release3K

Competing Currencies: Back to the Future? top
by Ben Craig
October 15, 1996

A look at how episodes of competing currencies can provide insight on 1) the qualities of a commodity that lead to its becoming a dominant currency, 2) the route by which a nationally mandated paper currency becomes acceptable as a medium of exchange, and 3) the way in which competition between currencies sustains the exchange value of a fiat currency by restricting the actions available to the monetary authority.

Full Text 37K
Press Release3K

Jobs Creation and Government Policy top
by Jerry L. Jordan
October 1, 1996

An argument by Federal Reserve Bank of Cleveland President Jerry Jordan that the proper focal point of public policy is not creating jobs but creating wealth, thus allowing for the highest standard of living.

Full Text 22K
Press Release3K

The Functions and Future of Retail Banking top
by Jerry L. Jordan
September 15, 1996

A look at the future of the retail banking industry by the president of the Cleveland Federal Reserve Bank. President Jordan explains that as technology and deregulation transform the financial marketplace, it will be critical to understand the services that people desire and to explore banks’ comparative advantages in supplying them.

Full Text 29K
Press Release3K

Reducing Working Hours: American Workers' Salvation? top
by Terry J. Fitzgerald
September 1, 1996

An examination of the basic rationale behind policies intended to reduce the standard workweek, and an explanation of why these policies are likely to be less effective at boosting employment than proponents claim.

Full Text 31K
Press Release3K

Discrimination in Mortgage Lending: What Have We Learned? top
by Stanley D. Longhofer
August 15, 1996

A retrospective on the debate over the presence of discrimination in the residential mortgage market, examining some of the evidence that’s been gathered since the Federal Reserve Bank of Boston published its groundbreaking (1992) study concluding that minority applicants were over 50 percent more likely to be denied a home loan than whites.

Full Text 26K
Press Release 3K

Inflation Targets: The Next Step for Monetary Policy top
by Mark S. Sniderman
August 1, 1996

An argument that adopting specific inflation targets as a way of achieving price stability would enhance the United States’ economic performance.

Full Text 26K
Press Release 3K

Interest Rate Rules for Seasonal and Business Cycles top
by Charles T. Carlstrom and Timothy S. Fuerst
July 1996

An argument that the Federal Reserve System’s current approach to seasonal cycles — pegging the nominal interest rate — could successfully be applied to the business cycle as well.

Full Text 28K
Press Release 3K

Welfare Reform and the Cyclicality of Welfare Programs top
by Elizabeth T. Powers
June 1996

An examination of how potential welfare recipients would be affected by reform proposals calling for a reduction in benefits and a shift in fiscal responsibility from the federal government to the states, emphasizing the sometimes substantial impact of business cycle swings on welfare caseloads and expenditures.

Full Text 28K
Press Release 3K

The Credit Union Industry—An Overview top
by Barbara A. Good
May 15, 1996

An introduction to the credit union industry’s structure and regulatory environment, offering a brief look at some safety and soundness issues.

Full Text 31K
Press Release 3K

A Simple Proposal for Privatizing Social Security top
by David Altig and Jagadeesh Gokhale
May 1, 1996

An argument that shifting to a privatized, funded, and contribution-based Social Security system could provide undiminished benefits to current retirees while simultaneously preserving the promise of a secure retirement for today’s workers and their descendants.

Full Text 19K
Press Release 3K

Where Is All the U.S. Currency Hiding? top
by John B. Carlson and Benjamin D. Keen
April 15, 1996

An examination of the U.S. dollar’s growing popularity abroad and a discussion of the implications of rising currency demand for U.S. economic policy.

Full Text 36K
Press Release 3K

The Future of Banking Supervision top
by Jerry L. Jordan
April 1, 1996

A prediction by Cleveland Federal Reserve Bank President Jerry Jordan that bank regulatory agencies will change the way they supervise banks in the coming years, making greater use of market forces to discipline individual banks’ behavior, and paying more attention to the functioning of the financial system as a whole.

Full Text 22K
Press Release 3K

State Employment 1995: Slowing to a Recession? top
by Mark E. Schweitzer and Kristin M. Roberts
March 15, 1996

An appraisal of the health of the national economy based on final state employment figures for 1995. The author finds that although employment growth has tapered off throughout the United States, there is no definitive evidence of a national recession in the near term.

Full Text 40K
Press Release 3K

Are Successful Interventions Random Events? top
by Owen F. Humpage
March 1, 1996

An examination of the Federal Reserve’s intervention successes in the late 1980s, showing that, although the characteristic day-to-day fluctuations in exchange rates virtually ensured that a large share of these interventions would appear successful — purely by chance and even in the absence of a causal link — the number of successes proved larger than pure randomness would suggest.

Full Text 21K
Press Release 3K

Glass-Steagall and the Regulatory Dialectic top
by João Cabral dos Santos
February 15, 1996

An explanation of how the Glass-Steagall Act, passed to prohibit U.S. commercial banks from engaging in investment banking activities, has led to the same costly cat-and-mouse game between banks and their regulators as did the prohibition against interstate banking, and an argument that lawmakers should consider banks’ incentives when crafting new regulations.

Full Text 20K
Press Release 3K

Mortgage Interest Deductibility and Housing Prices top
by Stephen G. Cecchetti and Peter Rupert
February 1, 1996

An analysis of how implementing a flat tax on income and ending the deductibility of mortgage interest payments would affect housing prices. The authors show that, to the extent prices decline, higher-income households would bear most of the impact, but increases in the value of their other assets might mitigate the decline in the price of their homes.

Full Text 30K
Press Release 3K

Making Sense of the Federal Budget Impasse top
by David Altig
January 15, 1996

An argument that the debate between Congress and the President over how to balance the budget is not simply irresponsible political posturing, but the result of serious and reasoned differences of opinion on the economic consequences of specific spending and tax decisions.

Full Text 24K
Press Release 3K

Social Security: Are We Getting Our Money's Worth? top
by Jagadeesh Gokhale and Kevin J. Lansing
January 1, 1996

An examination of Social Security from an individual investment perspective, showing that continued delays in addressing the program’s shortcomings will only increase the intergenerational inequities that now exist.

Full Text 42K
Press Release 3K


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