Federal Reserve System

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.

Aging and Strategic Learning: The Impact of Spousal Incentives on Financial Literacy.

Abstract: Women tend to be less financially literate than men, consistent with a division of labor where husbands manage finances. However, women tend to outlive their husbands. I find that older women acquire financial literacy as they approach widowhood - 80 percent would catch up with their husbands by the expected onset of widowhood. These gains are not attributable to husbands' cognitive decline, as captured by cognition tests. The results are consistent with a model in which the division of labor collapses when a spouse dies: women have incentives to delay acquiring financial human capital, but also to begin learning before widowhood.

Incorporating Equity Market Information into Supervisory Monitoring Models

Abstract: We examine whether equity market variables, such as stock returns and equity-based default probabilities, are useful to U.S. bank supervisors for assessing the condition of domestic bank holding companies. We develop a model of supervisory ratings that combines supervisory and equity market information. We find that the model's forecasts anticipate supervisory rating changes by up to four quarters. Relative to simply using supervisory variables, the inclusion of equity market variables in the model does not improve forecast accuracy. However, we argue that equity market information should still be useful for forecasting supervisory ratings and should be incorporated into supervisory monitoring models.

Understanding the effects of government spending on consumption

Abstract: Recent evidence on the effect of government spending shocks on consumption cannot be easily reconciled with existing optimizing business cycle models We extend the standard New Keynesian model to allow for the presence of rule-of-thumb (non-Ricardian) consumers We show how the interaction of the latter with sticky prices and deficit financing can account for the existing evidence on the effects of government spending

Fiscal policy and the Great Recession in the Euro Area

Abstract: How much did fiscal policy contribute to euro area real GDP growth during the Great Recession? We estimate that discretionary fiscal measures have increased annualized quarterly real GDP growth during the crisis by up to 1.6 percentage points. We obtain our result by using an extended version of the European Central Bank’s New Area-Wide Model with a rich specification of the fiscal sector. A detailed modeling of the fiscal sector and the incorporation of as many as eight fiscal time series appear pivotal for our result.