Providing you with in-depth analysis of current economic and financial issues.
- The Federal Open Market Committee (FOMC) has tied its asset purchases to a "substantial improvement" in labor market conditions. While we don’t speculate on what the FOMC means by substantial improvement, we do explore the level of monthly job gains that would gradually deliver the underlying trend unemployment rate within a reasonable timeframe, under several plausible scenarios. We find that the path of monthly job gains, which is highly dependent on a few key parameters, is likely to be smaller than the path associated with previous recoveries. Read more (PDF)
- Many Rust-Belt cities have seen almost half their populations move from inside the city borders to the surrounding suburbs and elsewhere since the 1970s. As populations shifted, neighborhoods changed—in their average income, educational profile, and housing prices. But the shift did not happen in every neighborhood at the same rate. Recent research has uncovered some of the patterns characterizing the process. Read more (PDF)
- The Median CPI is well-known as an accurate predictor of future inflation. But it’s just one of many possible trimmed-mean inflation measures. Recent research compares these types of measures to see which tracks future inflation best. Not only does the Median CPI outperform other trims in predicting CPI inflation, it also does a better job of predicting PCE inflation, the FOMC’s preferred measure, than the core PCE. Read more (PDF)
- Interest rates have been at historical lows for some time now. There are many possible reasons why that is so. We make use of recent work done at the Federal Reserve Bank of Cleveland that allows us to look at individual components of interest rates and see which are exerting the biggest influence. Knowing why rates are where they are now helps to predict where interest rates will likely be in the near future. Read more (PDF)
- More than 20 years ago Sweden suffered a severe financial crisis that brought unemployment to an all-time high. To this day the unemployment rate has not returned to where it was before the crisis. Economists say that if the U.S. is anything like Sweden, our full recovery may still be a long way off. Sweden is like the U.S. in many ways, but the roots of its labor market troubles appear to be very different from ours. Read more (PDF)
- Drawing from his long experience participating in the policymaking process at the Federal Reserve, chief policy officer Mark Sniderman shares his views on how the Federal Reserve’s framework for conducting monetary policy has evolved over the past decade. He explains how changes in economic theory have helped shaped this new framework and how lessons learned from the Great Depression and Japan’s recent struggle with deflation have contributed. This Commentary is based on a speech delivered at the Global Interdependence Conference, Tokyo, Japan, on December 4, 2012. Read more (PDF)
- Not only has poverty recently increased in the United States, it has also become more concentrated. This Commentary documents changes in the concentration of poverty in metropolitan areas over the last decade. The analysis shows that the concentration of poverty tends to be highest in northern cities, and that wherever overall poverty or unemployment rates went up the most over the course of the decade, the concentration of poverty tended to increase there as well. Read more (PDF)