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Recent Publications

FedViews

Posted November 13, 2017

Adam Shapiro, research advisor at the Federal Reserve Bank of San Francisco, stated his views on the current economy and the outlook as of November 9, 2017.

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Economic Letter

Posted November 20, 2017
Michael D. Bauer

When the Federal Reserve raises short-term interest rates, the rates on longer-term Treasuries are generally expected to rise. However, even though the Fed has raised short-term interest rates three times since December 2016 and started reducing its asset holdings, Treasury yields have dropped instead. This decoupling of short-term and long-term rates is reminiscent of the “Greenspan conundrum” of 2004–05. This time, however, evidence suggests compelling explanations—a lower “normal” interest rate, the risk of persistently low inflation, and fiscal and geopolitical uncertainty—may account for the yield curve flattening.

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Working Paper

Posted September 1, 2017
Kevin J. Lansing

This paper develops a New Keynesian model with a time-varying natural rate of interest (r-star) and a zero lower bound (ZLB) on the nominal interest rate. The representative agent contemplates the possibility of an occasionally binding ZLB that is driven by switching between two local rational expectations equilibria, labeled the "targeted" and "deflation" solutions, respectively. Sustained periods when the real interest rate remains below the central bank's estimate of r-star can induce the agent to place a substantially higher weight on the deflation equilibrium, causing it to occasionally become self-fulfilling. I solve for the time series of stochastic shocks and endogenous forecast rule weights that allow the model to exactly replicate the observed time paths of the U.S. output gap and quarterly inflation since 1988. In model simulations, raising the central bank's inflation target to 4% from 2% can reduce, but not eliminate, the endogenous switches to the deflation equilibrium.

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Indicators and Data

PCE Inflation Dispersion

PCE Inflation Dispersion statistics present a more detailed summary of the personal consumption expenditure price index (PCEPI), a measure of U.S. inflation. Included are measures of the distribution of price changes across categories and diffusion indices.

Tech Pulse

The Tech Pulse Index is an index of coincident indicators of activity in the U.S. information technology sector. It can be interpreted as a summary statistic that tracks the health of the tech sector in a timely manner.

Total Factor Productivity

Total Factor Productivity (TFP) presents a real-time, quarterly data series for the U.S. business sector, adjusted for variations in factor utilization—labor effort and capital’s workweek.

Wage Rigidity Meter

The Wage Rigidity Meter offers a closer examination of the annual wage changes of U.S. workers that have not changed jobs over the year.

Weather-Adjusted Employment Change

This page provides estimates of weather-adjusted employment change in the United States for the past six months. The estimates are aggregated from county-level estimates of weather’s employment effects, which were derived from a county-level analysis of the short-run effects of unusual weather on employment growth.

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The Center for Pacific Basin Studies promotes cooperation among central banks in the Pacific Basin and provides insight into and analysis of economic policy issues affecting the region.

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The summer fellowship offers individuals an opportunity to interact with economists and visiting scholars, make progress in writing their dissertation, and increase their exposure to scholarly research.

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