-
Impact of U.S. Labor Productivity Losses from Extreme Heat
Extreme heat decreases labor productivity in sectors like construction, where much work occurs outdoors. Because construction is an important component of investment, lost productivity today will slow how much capital is built up for future use and thus can have long-lasting impacts on overall economic outcomes. Combining estimates of lost labor productivity due to extreme…
-
When Is Shelter Services Inflation Coming Down?
Shelter costs are one of the largest expenses for most households and an important component of overall inflation. It is therefore important to understand why shelter costs have remained stubbornly high. A key explanation is that, especially since the pandemic, demand for housing has been growing faster than new units have come into the market.…
-
Policy Applications of a Global Macroeconomic Model
Central banks and other policy institutions have a long history of using macroeconomic models to help prepare forecasts and to quantify the economic consequences of various policies. Likewise, private sector firms have long depended on models to summarize these complex interactions succinctly and to evaluate the likelihood of specific macroeconomic outcomes; this is especially true…
-
Monetary Policy Through the Lens of Market-Based Inflation
Some goods and services prices are not directly observed and must be indirectly derived for measuring inflation. This nonmarket-based inflation category has been an important factor keeping headline inflation elevated over the past two years. Because indirectly deriving prices introduces measurement uncertainty, one monetary policy approach would be to focus solely on directly observable prices.…
-
Linkages between Monetary and Regulatory Policy: Lessons from the Crisis
The crisis of the past two years has underscored the connections between monetary policy, which seeks to foster maximum employment and price stability, and regulatory policy, which works to protect the financial system. The two domains can’t be regarded as separate. Researchers are currently examining ways in which monetary policy may play a role in…
-
Has China’s Economy Become More “Standard”?
Financial liberalization in China has broad implications, including changing how its central bank’s monetary policy affects the nation’s economy. An estimate of Chinese economic activity and inflation based on a broad set of indicators suggests that the way policy is transmitted to China’s economy has become more like Western market economies in the past decade.…
-
Is Demand or Supply More Important for Inflation?
Simulations using a Phillips curve-type relationship provide insights into the importance of demand versus supply for inflation over different periods. The decade of low inflation after the Great Recession was driven mainly by supply forces. Given that monetary policy operates to influence demand but not supply, this result helps to account for the persistent undershooting…
-
Monetary Policy in an Era of Crises
The enormous and prolonged economic fallout from the global financial crisis and the subsequent deleveraging have convincingly demonstrated the need to mitigate the risk of crisis. We should have known this from the work of Carmen Reinhart and Ken Rogoff (2009), but the lesson has finally stuck. My topic this afternoon centers on the role…
-
Recent Spike in Immigration and Easing Labor Markets
The Congressional Budget Office recently raised its demographic projections for net U.S. immigration. Most of the increase in the projections came from undocumented immigrants. Updating the CBO estimates with recent data points shows a continuing strong inflow of undocumented migrants. Analysis linking the revised estimates for this group to labor market statistics shows that immigrants…
-
Prospects for Asia and the Global Economy: Conference Summary
A new volume, Prospects for Asia and the Global Economy, summarizes the 2013 Asia Economic Policy Conference hosted by the Federal Reserve Bank of San Francisco’s Center for Pacific Basin Studies. The conference focused on challenges faced by policymakers in advanced and emerging economies as they continue to recover from the recent global financial crisis.…