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Institution

Federal Reserve System

OtherWashington D.C., District of Columbia, United States
About: Federal Reserve System is a other organization based out in Washington D.C., District of Columbia, United States. It is known for research contribution in the topics: Monetary policy & Inflation. The organization has 2373 authors who have published 10301 publications receiving 511979 citations.


Papers
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Journal ArticleDOI
TL;DR: The authors provided estimates of the New Keynesian Phillips curve for the U.S. and Australia using theory-consistent estimates of output gap, and showed that using this theory to measure the output gap leads to a considerable improvement in the empirical performance of output-gap-based Phillips curves.
Abstract: Recent studies have argued that the New Keynesian Phillips curve (Calvo pricing model) is empirically valid, provided that real marginal cost rather than detrended output is used as the variable driving inflation. One interpretation of this result is that real marginal cost is not closely related to the output gap, and so models for monetary policy need to include labormarket rigidities. An alternative interpretation is that marginal cost and the output gap are closely related, but that the latter needs to be measured in a manner consistent with dynamic general equilibrium models. To date, there has been little econometric investigation of this alternative interpretation. This paper provides estimates of the New Keynesian Phillips curve for the U.S., the U.K., and Australia using theory-consistent estimates of the output gap. Using this theory to measure the output gap leads to a considerable improvement in the empirical performance of output-gapbased Phillips curves.

178 citations

Journal ArticleDOI
TL;DR: In this article, the authors show that one can analyze deflation as a credibility problem if three conditions are satisfied: the government's only policy instrument is increasing the money supply by open market operations in short-term bonds; the economy is subject to large negative demand shocks; and the government cannot commit to future policy.
Abstract: I model deflation, at zero nominal interest rate, in a microfounded general equilibrium model. I show that one can analyze deflation as a credibility problem if three conditions are satisfied. First: The government's only policy instrument is increasing the money supply by open market operations in short-term bonds. Second: The economy is subject to large negative demand shocks. Third: The government cannot commit to future policy. I call the credibility problem that arises under these conditions the deflation bias. I propose several policies to solve it. They all involve printing money or issuing nominal debt. In addition they require cutting taxes, buying real assets such as stocks, or purchasing foreign exchange. The government "credibly commits to being irresponsible" by pursuing these policies. It commits to higher money supply in the future so that the private sector expects inflation instead of deflation. This is optimal since it curbs deflation and increases output by lowering the real rate of return.

178 citations

Journal ArticleDOI
TL;DR: In this article, the authors derive measures of the tone and volume of economic reporting, building upon the R-word index of The Economist, and find evidence supporting that consumers update their expectations about the economy much more frequently during periods of high news coverage than in periods of low news coverage.
Abstract: The news media affects consumers’ perceptions of the economy through three channels. First, the news media conveys the latest economic data and the opinions of professionals to consumers. Second, consumers receive a signal about the economy through the tone and volume of economic reporting. Last, the greater the volume of news about the economy, the greater the likelihood that consumers will update their expectations about the economy. We find evidence that all three of these channels affect consumer sentiment. We derive measures of the tone and volume of economic reporting, building upon the R-word index of The Economist. We find that there are periods when reporting on the economy has not been consistent with actual economic events, especially during the early 1990s. As a consequence, there are times during which consumer sentiment is driven away from what economic fundamentals would suggest. We also find evidence supporting that consumers update their expectations about the economy much more frequently during periods of high news coverage than in periods of low news coverage; high news coverage of the economy is concentrated during recessions and immediately after recessions, implying that “stickiness” in expectations is countercyclical. Finally, because the model of consumer sentiment is highly nonlinear, month-tomonth changes in sentiment are difficult to interpret. For instance, although an increase in the number of articles that mention “recession” typically is associated with a decline in sentiment, under certain conditions it can actually result in an increase in various sentiment indexes.

178 citations

Journal ArticleDOI
TL;DR: In this paper, the Herfindahl-Hirschman index (HHI) was used to determine whether the role of market share inequality and the number of competitors in explaining bank deposit and loan rates.
Abstract: This paper seeks to determine whether the Herfindahl--Hirschman index (HHI) adequately accounts for the roles of market share inequality and the number of competitors in explaining bank deposit and loan rates. This is been done by estimating deposit-rate and loan-rate equations in which the HHI is decomposed into components that reflect share inequality and number of competitors and, alternatively, by adding measures of share inequality and the number of competitors as additional explanatory variables. Results are inconclusive in the case of deposit rates but suggest that the HHI does not give sufficient weight to the number of competitors in explaining loan rates.

178 citations

Journal ArticleDOI
TL;DR: In this article, the qualitative dynamics of a discrete time version of a deterministic, continuous time, nonlinear macro model formulated by Haavelmo are fully characterized, and several implications for dynamic economic modelling are discussed.

178 citations


Authors

Showing all 2412 results

NameH-indexPapersCitations
Ross Levine122398108067
Francis X. Diebold11036874723
Kenneth Rogoff10739075971
Allen N. Berger10638265596
Frederic S. Mishkin10037234898
Thomas J. Sargent9637039224
Ben S. Bernanke9644676378
Stijn Claessens9646242743
Andrew K. Rose8837442605
Martin Eichenbaum8723437611
Lawrence J. Christiano8525337734
Jie Yang7853220004
James P. Smith7837223013
Glenn D. Rudebusch7322622035
Edward C. Prescott7223555508
Network Information
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Performance
Metrics
No. of papers from the Institution in previous years
YearPapers
202317
202247
2021303
2020448
2019356
2018316