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• 04.18.19

  Putting Middle Neighborhoods Back on the Map

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  Treye Johnson

  Supporting the neighborhoods that are home to as many as 40 percent of residents of urban areas has become a movement. Read More

• 04.15.19

  Changing Policy Rule Parameters Implied by the Median SEP Paths

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  Edward S. Knotek II

  This Commentary estimates the implied parameters of simple monetary policy rules using the median paths for the federal funds rate and other economic variables provided in the Federal Open Market Committee’s Summary of Economic Projections (SEP). The implied policy rule parameters appear to have changed over time, as the federal funds rate projections have become less responsive to the unemployment gap. This finding could reflect changes in policymakers’ preferences, uncertainty over other aspects of the policy rule, or limitations of estimating simple monetary policy rules from the median SEP paths. Read More

• 04.11.19

  Residual Seasonality in GDP Growth Remains after Latest BEA Improvements

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  Victoria Consolvo Kurt G. Lunsford

  Measuring economic growth is complicated by seasonality, the regular fluctuation in economic activity that depends on the season of the year. The BEA uses statistical techniques to remove seasonality from its estimates of GDP, but some research has indicated that seasonality remains. As a result, the BEA began a three-phase plan in 2015 to improve its seasonal-adjustment techniques, and in July 2018, it completed phase 3. Our analysis indicates that even after these latest improvements by the BEA, residual seasonality in GDP growth remains. On average, this residual seasonality makes GDP growth appear to be slower in the first quarter of the year and more rapid in the second quarter of the year. Rapid second-quarter growth is particularly noticeable in recent years. As a result, business economists and policymakers may want to take seasonality into account when using GDP to assess the health of the economy. Read More