2015 Economic Trends
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Student Employment and Time Use
What are the effects of employment on students' academic and labor market outcomes? We begin to explore the issue by comparing the amount of time that employed and unemployed students spend on homework and other activities. Read More
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Market, Nonmarket, and Total Work of Males and Females
In this article we investigate the time use patterns of employed males and females. We look at market work and nonmarket work, first separately, and then together. Read More
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The Long-Run Natural Rate of Interest
There has been a lot of speculation lately about whether the natural rate of interest has fallen, and if so, by how much. Read More
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Inflation: Waiting for the Upturn
The potential for downward moves in longer-run inflation expectations bears very close watching, because such moves would pull the inflation outlook lower as well. Read More
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The Impact of Rising Student Loan Debt on Mortgage Borrowing
In this article, we look at whether the increase in student loan debt could be responsible for the decline in mortgage borrowing by people who are between the ages of 18 and 30. Read More
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Slow Capital Accumulation and the Decline in Labor’s Share of Output
Since capital and labor tend to be complementary in the production of goods and services, the same factors that have slowed down capital accumulation since the early 2000s may have weakened businesses' labor demand and may have decreased the labor share. Read More
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Explaining Low Inflation: Model-Based Decomposition
In this article I use a statistical forecasting model—called a Bayesian vector autoregression or BVAR—to explain the factors responsible for the stubbornly low levels of core inflation over the past four years. Read More
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Loan-Loss Provisioning
In this article, we document the timing problem around how banks are made to maintain reserve accounts with a look at some data for US banks over the past few decades. Read More
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Labor Market Behavior during and after the Great Recession: Has It Been Unusual?
What’s been unusual about the recovery from the Great Recession is not the behavior of the labor market, but rather, the anemic growth of GDP. Read More
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The Chinese Renminbi and the Fundamental Trilemma
China’s exchange-rate policies have been a persistent source of controversy in the United States since shortly after the People’s Bank of China devalued the renminbi and pegged it to the dollar in 1995. Read More
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Survey and Market Measures of Inflation Expectations
We review several measures of inflation expectations, which reflect economic agents’ perceptions about the future course of inflation. Read More
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The Toledo Metropolitan Statistical Area
In this Economic Trends, we track the relative performance of Toledo's economy and compare it to those of Ohio and the country at large. Read More
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Healthcare Inflation and the Core Inflation Gap
One potential explanation for the widening spread between the core CPI and PCE indexes is low healthcare inflation and the fact that healthcare is treated differently in each index. Read More
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Has There Been a Recovery in the US Fertility Rate?
Over the last 35 years, fertility rates have declined during recessions and increased in the later years of expansions. However, a significant rise in fertility has not yet happened in the current expansion. Read More
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Who Is Holding All the Excess Reserves?
The stock of required reserves has been stable since late 2008, while the stock of excess reserves has increased drastically. We explore the composition of this unprecedented increase in excess reserves. Read More
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Comparing Price-to-Earnings Ratios: The S&P 500 Forward P/E and the CAPE
We look at a couple variants of the P/E ratio and compare the kinds of information each provides. Read More
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Combining GDP and GDI for a Better Measure of the Economy Could Be Tricky
It is not easy to remove residual seasonality from a measure that combines GDP and GDI. Read More
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Assessing Consumer Confidence with Google Search Terms
We examine the usefulness of Google search volumes as an indicator of consumer confidence. Read More
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Recent Inflation Trends
Although year-over-year rates are very useful for gauging inflation rates, they may at times be slow to display shifts in inflation. Underlying changes will show up more quickly in inflation rates calculated over shorter periods such as three months. Read More
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US Fiscal Policy: Recent Trends in Historical Context
Since the Great Recession, total government spending has behaved abnormally both in its excessive volatility and in its slow growth. Read More
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Mixed Signals on Financial Stability
Financial markets are still in what seems to be a tentative recovery period, even 6 years after the end of the Great Recession. We look at the banking trends observed through 2014 and consider what they may signal about the financial sector in 2015. Read More
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Demographic Changes in and near US Downtowns
We study demographic changes in the downtowns of 118 US cities between 1970 and 2010. Read More
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Mutable Economic Laws and Calculating Unemployment and Output Gaps—An Application to Taylor Rules
Conclusions about Fed policy based on the Taylor rule depend on how accurately potential output or the NAIRU are measured. Both concepts are hard to measure, so care should be taken when using the Taylor to predict Fed policy actions. Read More
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The Gap Between Services Inflation and Goods Inflation
Digging a little deeper into the two components of core PCE inflation, core services and core goods, may provide additional insights into why core inflation has been persistently low and whether there is a cause for concern that it could remain low. Read More
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Difficulties Forecasting Wage Growth
This article compares the ability of three statistical models and professional forecasters to forecast wage growth and finds wage growth has been unpredictable since the mid-1990s. Read More
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FHA Lending Rebounds in Wake of Subprime Crisis
FHA loan standards have improved substantially, but the overall default rate remains high due to loans made previously. Read More
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Did Core Deposits Hedge Loan-Commitment Risk during the Financial Crisis?
During financial crises, banks can experience heightened demand for liquidity as customers draw down lines of credit and other loan commitments. Some researchers say core deposits naturally rise to meet the demand. Do they? Read More
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Behind the Slow Pace of Wage Growth
Slow productivity growth and labor's declining share of income are among the factors depressing real wage growth. Read More
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Survey- and Market-Based Inflation Expectations
Since expectations are an important factor affecting future inflation and one of the variables attended to closely by the FOMC, this piece looks at recent trends in various measures of inflation expectations. Read More
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Racial and Ethnic Differences in College Major Choice
There are large differences in the average earnings of people who choose different college majors. Could differences in major choice explain some of the income gap between blacks and Hispanics relative to whites and Asians? Read More
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Are Wages Flat or Falling? Decomposing Recent Changes in the Average Wage Provides an Answer
There recently has been a lot of concern about stagnant wages. This article answers the question: What fraction of recent changes in the average wage is due to changes in the occupation mix versus changes in wages within occupations? Read More
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Exchange-Rate Pass-Through and US Prices
Some worry that the price impacts of the dollar's appreciation will push the US inflation rate deeper into negative territory. We focus on nonpetroleum imports to show how the dollar's appreciation is passing through to import prices and the CPI. Read More
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Do Energy Prices Drive the Long-Term Inflation Expectations of Households?
The fall in gasoline prices and recurrent drops in the CPI beg the question: how do these developments affect the long-term inflation expectations of households? Read More
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Household Debt and Post-Recession Auto Lending
Home mortgage debt and credit card debt have stopped contracting and auto loan balances have been rising for more than three years. The question now is whether the decline in borrowing has hit an end, signaling a return of consumer confidence. Read More
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Trends in Energy Production and Prices
Natural gas and oil production has been increasing in the United States since 2009, while coal production has been falling. Contributing to these national trends are Kentucky, Ohio, Pennsylvania, and West Virginia. Read More
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Uncovering the Demand for Housing Using Internet Search Volume
One challenge in evaluating the demand for goods and services is the timing of data releases. As an alternative, we attempt to gauge housing demand by using data on the volume of searches done on words and phrases in Google Read More
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Recent Evidence on the Job Search Effort of Unemployed Females
In looking for causes of the high unemployment rate that followed the Great Recession, economists focused a lot of attention on the decision-making behaviors of the unemployed, particularly the amount of effort they spent searching for a job. Read More
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Job Polarization and Labor Market Transitions
In this post, we want to shed some light on the unemployment experience of workers with different occupational skills and their transitions into different states of employment or unemployment. Read More
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The Behavior of Consumption in Recoveries
Consumption represents approximately 70 percent of GDP as measured by the National Income and Product Accounts, so unsurprisingly it closely follows the overall trend of GDP during NBER (National Bureau of Economic Research) business cycles. Read More
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Tracking Recent Levels of Financial Stress - January 2015
During most of the fourth quarter of 2014, the Cleveland Financial Stress Index (CFSI) remained in Grade 2 (a historically normal stress range). Read More