Mark Schweitzer is senior vice president at the Federal Reserve Bank of Cleveland. He advises and informs the Cleveland Reserve Bank’s president and board of directors on regional economic developments and economic policy issues.
Suggested citation: "Is an Explicit Inflation Objective Consistent With a Dual Mandate?,” Federal Reserve Bank of Cleveland, Annual Report 2010: Price Stability: Why We Seek It and How Best to Achieve It, 12.31.2010.
Vehicle production has fallen since the beginning of the pandemic recession. We investigate reasons for this decline. Manufacturers in this industry cite insufficient materials, including a lack of semiconductors, as increasingly responsible. Demand seems to be less of an issue. In fact, demand has been strong, and together with accelerating prices and sharply declining inventories, it suggests an insufficient supply of new cars. Our best guess is that the materials shortages and their effects on new car prices will subside within the next six to nine months.
Consumers increased their purchases of durable goods notably during the COVID-19 pandemic. The pandemic may have lifted the demand for durable goods directly, by shifting consumer preferences away from services toward a variety of durable goods. It may also have stimulated spending on durable goods indirectly, by prompting a strong fiscal policy response that raised disposable income. We estimate the historical relationship between durable goods spending and income and find that income gains in 2020 accounted for about half of the increase in durable goods spending, indicating that the direct and indirect effects of the pandemic on durable goods spending were about equally important.
In March 2020, in the early days of the COVID-19 pandemic, many were concerned about the liquidity of nonbank mortgage servicers. As it turned out, the vast majority of these servicers did not face a liquidity crisis. In this Commentary I detail the reasons why, including lower than expected take up rates of forbearance, the role played by mortgage origination income, and the actions taken by the government-sponsored enterprises, Ginnie Mae, and housing agencies.
The Federal Reserve Bank of Boston Economic Research Conference Series fosters discussion and critical engagement among academics, central bankers, policymakers, and other experts on important economic policy topics.
The European Central Bank (ECB) and the Federal Reserve Bank of Cleveland’s Center for Inflation Research will host the Inflation: Drivers and Dynamics Conference 2021, which will be held virtually on October 7–8.