Caroline Herrell |

(Former) Research Assistant


Caroline Herrell, (Former) Research Assistant

Caroline Herrell is a former research assistant in the Research Department of the Federal Reserve Bank of Cleveland.

  • Fed Publications
Title Date Publication Author(s) Type

 

April, 2010 Caroline Herrell; Owen F Humpage; Economic Trends
Abstract: We have never quite understood the pejorative connotation associated with “global imbalances.” Every day people around the world choose how much of their income to spend or save and what types of goods—domestic or foreign—to buy. People make these choices solely with the intent of improving their own lives, and by and large they seem pretty successful at it. Current-account deficits or surpluses merely aggregate these individual choices. How can this be a bad thing?

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March, 2010 Caroline Herrell; Owen F Humpage; Economic Trends
Abstract: Whether a country is better or worse off in a monetary union like the euro zone depends on whether the gains from giving up monetary-policy sovereignty exceed the costs of losing an important parameter for economic adjustment. Monetary unions are not one-size-fits-all arrangements. Having a common currency confers key benefits on the euro-zone countries. Having a common currency, however, can also impose a serious cost.

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February, 2010 Caroline Herrell; Owen F Humpage; Economic Trends
Abstract: A quick look at the latest GDP data might suggest that imports are slowing the domestic recovery. A quick look might get it wrong.

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January, 2010 Caroline Herrell; Owen F Humpage; Economic Trends
Abstract: Many attribute the dollar’s recent decline to a relatively easy U.S. monetary policy that is fueling a dollar carry trade. The dollar carry trade refers to a set of foreign-exchange transactions that seem to exploit an economic anomaly and entail substantial risk. Perhaps that is why some people fear that the carry trade could unwind quickly and pose adverse consequences for global currency markets.

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November, 2009 Caroline Herrell; Owen F Humpage; Economic Trends
Abstract: China gains a competitive advantage not from its peg with the dollar, but from its ability to offset the impact of foreign financial inflows on its price level. Appreciating this distinction is crucial for understanding Chinese exchange-rate policies.

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October, 2009 Caroline Herrell; Paul W Bauer; Economic Trends
Abstract: The advance estimate of 3.5 percent for GDP growth in the third quarter of 2009 is welcome news, and it suggests that the longest recession since the Great Depression and the deepest since the 1950s is likely to have ended at some point around the middle of the year. This isn’t to say that the widespread pain experienced by households and firms is over, just that the economy has at least stopped contracting and is starting to grow. Economic observers try to glean evidence of turning points from data series that come out more frequently and with less of a lag than GDP and employment estimates. Transportation data are good candidates, as many series are published monthly, relatively soon after the close of the month. Equally important for this purpose is the fact that they should be highly correlated with economic activity.

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October, 2009 Caroline Herrell; Owen F Humpage; Economic Trends
Abstract: In terms of purchasing power parity, the dollar seems a tad undervalued these days, but that does not mean it will soon appreciate. Exchange rates can deviate from their purchasing-power-party levels for long periods. What’s more, the necessary adjustment can come through prices, not exchange rates.

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September, 2009 Caroline Herrell; Owen F Humpage; Economic Trends
Abstract: Unfortunately for forecasting buffs, other factors besides monetary spurts affect dollar exchange rates, and these things muddy the ability of exchange-rate changes to forecast future inflation patterns. All and all, exchange rates do contain useful information for predicting inflation, but forecasting inflation simply with an exchange rate is a little like eating dinner with only a knife.

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August, 2009 Caroline Herrell; Owen F Humpage; Economic Trends
Abstract: Since 1986, foreigners have held more claims against U.S. residents than U.S. residents have held against the rest of the world, or—as economists like to say—the United States has had a negative net international investment position.

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July, 2009 Caroline Herrell; Owen F Humpage; Economic Trends
Abstract: The global nature of our current economic problems suggests that few countries will find trade an outlet for their economic troubles. Moreover, the risks to the outlook still remain more heavily weighted toward the downside than the upside.

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