Center for Pacific Basin Studies

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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Pacific Basin Notes

Occasional series of the FRBSF Economic Letter

The Rise and Fall of Pandemic Excess Wealth

2024 – 06

| February 26, 2024

U.S. households accumulated significantly more wealth following the pandemic onset than would have been expected without the pandemic shock. Overall excess household wealth—measured as households’ inflation-adjusted net worth beyond pre-pandemic projections—peaked in late 2021 at $13 trillion, then rapidly fell to zero in late 2022, where it broadly remained through the third quarter of 2023. This rise and fall can be attributed mainly to financial assets, particularly equity holdings. Similarly, real liquid asset holdings currently sit below pre-pandemic projections despite a persistent rise in checking account balances.

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Working Papers

A Post-Pandemic New Normal for Interest Rates in Emerging Bond Markets? Evidence from Chile

2024-04 | FEBRUARY 2024

Luis Ceballos, Jens H. E. Christensen, Damian Romero

Before the COVID-19 pandemic, researchers intensely debated the extent of the decline in the steady-state short-term real interest rate—the so-called equilibrium or natural rate of interest. Given the recent sharp increase in interest rates, we revisit this question in an emerging bond market context and offer a Chilean perspective using a dynamic term structure finance model estimated directly on the prices of individual Chilean inflation indexed bonds with adjustments for bond-specific liquidity risk and real term premia. We estimate that the equilibrium real rate in Chile fell about 2 and a half percentage points in the 2003-2022 period and has remained low since then.

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November 16 – November 17, 2023
Federal Reserve Bank of San Francisco | San Francisco, CA


November 18, 2022
Federal Reserve Bank of San Francisco | San Francisco, CA

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