Federal Reserve Bank of Dallas

About: Federal Reserve Bank of Dallas is a other organization based out in Dallas, Texas, United States. It is known for research contribution in the topics: Monetary policy & Inflation. The organization has 196 authors who have published 994 publications receiving 35508 citations.

The Bond Yield 'Conundrum' from a Macro-Finance Perspective

Abstract: In 2004 and 2005, long-term interest rates remained remarkably low despite improving economic conditions and rising short-term interest rates, a situation that former Fed Chairman Alan Greenspan dubbed a conundrum. We document the extent and timing of this conundrum using two empirical no-arbitrage macro-finance models of the term structure of interest rates. These models confirm that the recent behavior of long-term yields has been unusual - that is, it cannot be explained within the framework of the models. Therefore, we consider other macroeconomic factors omitted from the models and find that some of these variables, particularly declines in long-term bond volatility, may explain a portion of the conundrum. Foreign official purchases of U.S Treasuries appear to have played little or no role.

Do What You Do Best, Outsource the Rest?

Abstract: International trade generates higher overall output by redirecting jobs to those who create the most added value, that is, to those who maximize their productive abilities Put simply, the benefits of free trade can be summarized as: "Do what you do best Trade for the rest" But times are changing, and so are many traded commodities The newest US trade commodity is skilled white-collar work, with an estimated 60 percent of these outsourced jobs going to India As with most traded commodities, outsourcing work abroad is the product of lower foreign labor costs and potential higher future profits And like free trade, outsourcing has become controversial Outsourcing's critics see only the elimination of work previously done in the United States and view outsourcing as exporting white-collar jobs to other countries What they fail to recognize is that attempting to protect these jobs would mean higher prices for consumers and the unrealized potential for more productive jobs in newly created industries What is outsourcing? Why is India the leading country in attracting outsourced work? And what are the economic and political implications as firms do what they do best and outsource the rest?